LANSING – With thousands of jobs now at risk after Chrysler filed for bankruptcy, State Representative Bettie C. Scott (D-Detroit) today voted in favor of a resolution calling on the state to pull investments out of the funds that refused to support Chrysler's reorganization plan. The resolution also calls on the governors of Delaware, Illinois, Indiana, Missouri, Ohio and Wisconsin, states that have Chrysler facilities, to take similar action.
Even as President Obama's auto task force tried to get all 46 of Chrysler's secured lenders to agree to a debt-reduction deal, the leadership of Oppenheimer Funds, Perella Weinberg Partners' Xerion Capital Fund, and Stairway Cap Management refused to erase their debts with Chrysler and also reportedly advised other lenders not to support the restructuring plan.
"These hedge fund managers have put themselves first, and turned their backs on Chrysler and Michigan. Chrysler is a rich part of Michigan's history," Scott said. "We can't continue to support hedge funds that stood back and let this company go bankrupt. I am committed to continuing our fight for Chrysler – a company which represents the heart and soul of a community, city and our state."
The bankruptcy of Chrysler is expected to have a devastating ripple effect on the economies of Michigan and the nation. Chrysler employs more than 38,000 workers in the United States, with 21,150 residing in Michigan. Nearly 49,000 of the 120,059 Chrysler retirees who receive pension checks are Michigan residents. "In my district, District 3, the Mack Stamping plant is idled and the Jefferson North plant has been idled since April 17 of this year," Scott said. "We cannot allow these events to be ignored or tolerated."
Chrysler's bankruptcy filing kicks off a restructuring that is expected to take 30 to 60 days. As part of the restructuring, Chrysler finalized a merger with Fiat SPA.
"Chrysler Chief Executive Bob Nardelli has assured employees and retirees that they won't lose out on their benefits during the restructuring process,"Scott said. "This transition will not be easy for the company or its hard-working men and women, but we can't let the selfishness of those looking to make a quick buck destroy the foundation that our community and state was built on. We will stand up and do what is right for our people."