Obama the Co-Pilot

Is Barack Obama going to pass his test over at Chrysler? The ex-candidate who chanted “Yes we can” has become president, but isn’t sure that his philosophy of the will, having worked wonderfully during the campaign, will bear fruit on the industrial terrain. Certainly, Chrysler has become yoked to Fiat, which could take it out through a judicial recovery, and will be cleared of its debts and restructured in depth. Daimler hasn’t succeeded in saving a Chrysler saddled by its debts; Fiat will essentially acquisition the assets itself. The chances for success in this American-Italian coupling are still low. In an American automobile market that sold almost 17 million units two years ago, but sold less that 10 million this year, even the strong are going to suffer. Chrysler itself no longer has any confidence in its buyers.

In April, the manufacturer, extremely dependent on its domestic market, sold over two times less cars than a year ago, and a quarter less than in May. And bankruptcy will hardly contribute to improve this image. From now until 2011-2012 at the latest, the alliance with Fiat will theoretically allow them to launch new cars; but by waiting, Chrysler will have the factories closed for a least a year or two with nothing new to sell! Will the manufacturer be able to sail through the tempest? It is doubtful, since this ship will nontheless have more than one captain at its helm.

In becoming primary stockholders of Chrysler, the union members of UAW might be prisoners of their divergent interests. How do they defend the salaries this time – the retirees and their role as co-owners? And what of a case in which the situation deteriorates further, resulting in lower salaries, cuts into retirement funds or sacrifice of the new stockholders? Fiat, the bankruptcy judges and the creditors, saddled with all of the scorn and legally-allowed disdain, will be allowed to have their say at each strategic turn. It’s difficult to stay the course in these conditions. Especially since the American state, even if it pretended that it will not be a “stockholder-manager,” will be consulted endlessly and called make decisions in case of conflict.

In coming to the front lines, President Obama has in fact become the co-pilot of Chrysler. It is a building failure that would end up being his failure as well. In promising that this bankruptcy will initiate a renaissance, the man who will be without doubt candidate to his own succession in only three years already took a risk: that he will not be able to keep his promises.