April 22, 2009
Implores companies to think of thousands of families that will be affected
LANSING - Governor Jennifer M. Granholm today called on banks and hedge funds that are secured lenders of Chrysler to return to the bargaining table with a new counter-offer that can help the company avoid bankruptcy. Granholm said for the lenders, who received billions of dollars in taxpayer funds to secure their own viability, to do otherwise is unacceptable.
"Who knew when we were bailing out the banks we were setting them up to kill the auto industry," Granholm said. "They need to think about the tens of thousands of workers whose lives hang in the balance because the banks want to get a better deal than what even the market will bear. It's totally unacceptable."
In letters sent to the presidents of J.P. Morgan Chase, Citicorp, Morgan Stanley and Goldman Sachs, as well as investment funds Oppenheimer Funds, Elliott Management, Perella Weinberg Partners, and Stairway Capital Management, the governor expressed deep disappointment in the counter-offer the banks, along with Chrysler's other secured lenders, offered the U.S. Treasury earlier this week. Granholm noted that employees have taken cuts as has the industry, and she urged them to come back to the table with an acceptable offer.
"With just over a week to go before the government's restructuring deadline, I urge you, too, to do your part to avoid the devastation that a bankruptcy or liquidation will bring," Granholm wrote. "Your action is inconsistent with what should be our common objective in helping advance America's economic recovery."
Granholm noted that because JP Morgan Chase and the other lead banks have collectively taken more than $90 billion from the Troubled Asset Relief Program (TARP), she believes they have an obligation to do absolutely everything they can to participate in this newly-structured company at the level requested by the president's auto task force.
"An even stronger argument is that your banks now appear, based on first quarter profit reports, to be in a much better financial position to absorb the extinguishment of debt as proposed," Granholm added.
Copies of the letters are attached.
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