Clem’s Chronicles: Chrysler/H1N1-Swine Flu/Waterboarding

Clem Lane with the ABC NEWS nightly editorial note.

CHRYSLER BANKRUPTCY-President Obama calls it “a new lease on life” for Chrysler. Others aren’t so sure. But today in a NY court, Chrysler filed for bankruptcy, part of an Administration-backed plan to revive the nation’s #3 automaker. Jake Tapper reports that “Chrysler will now partner with Italian automaker Fiat” whom President Obama praised today as building “the clean, fuel-efficient cars that are the future of the industry.” And what does Fiat get out of this Jake? Tapper: “In exchange for that technology and its worldwide distribution network, Fiat will own 20 percent of the new Chrysler.” The American taxpayer gets a chunk of Chrysler too(8 percent), Tapper notes “in exchange for more than $8 billion in new financing and loans on top of the more than $4 billion already given to Chrysler.” As for Chrysler’s creditors, the biggest of them are getting less than 30 cents on the dollar. But don’t cry for them-Tapper adds that “most of that debt is owed to four banks that have received tens of billions of dollars in bailout money.” What’s the impact on the regular Joe who works for or with Chrysler? Tapper: “many of Chrysler’s 3300 dealers will close. Retirees will keep their pensions but current workers agreed to further cuts in wages and benefits.” Remember those “others aren’t so sure” I mentioned near the top of this note. Chris Bury, reporting from Auburn Hills, Michigan talked to some of them. One Chrysler worker told Bury “We don’t know if we’re going to have a job tomorrow, let alone next year.” What has the man spooked (after all the President did use the term ‘a new lease on life’ for the company)? Bury reports “they will be laid off beginning Monday. Chrysler plans to shut down most plants for up to 60 days.” Other doubters? Dealership owners facing closure. Parts suppliers unsure of timely payments from the automaker. Biggest question mark? The bankruptcy process itself. David Sedgwick, the Editor-in-Chief of Automotive News was quoted in Bury’s WORLD NEWS piece saying “The quicker Chrysler can get through this, the better. If they linger in bankruptcy, I think it could be fatal.”

BANKRUPTCY/QUICK OR NOT?-Charles Herman wrote a nice note on how the bankruptcy could work. Excerpts follow: “While the President and the administration may hope for a short 30 to 60 day bankruptcy, it may not be that simple, especially with those creditors that Obama signaled out for not cooperating. While the plan calls for using Section 363 of the bankruptcy code ‘to clear away the remaining impediments to its successful relaunch,’ as Tapper/Miller/Martin report, a lot will depend on whether or not the individual creditors have a case to make before the bankruptcy judge that has to be considered before this section of the code can be used.  It’s not that a fast bankruptcy won’t happen, it might, but it’s not necessarily a done deal.
Ed Morrison, a professor at Columbia who specializes in bankruptcy, pulled statistics from well-known bankruptcy expert Lynn LoPucki’s website that tracks filings and found that from 2000 to the present, the length of the median ‘pre-negotiated’ bankruptcy case was about 5.3 months.  During the same period, the length of the median ‘prepack- case was about 52 days, according to the same data source. ‘Prepackaged’ means that the debtor drafted the plan and successfully solicited votes on it before filing the case. Prepackaged cases nearly always are filed solely to modify the company’s liability on an issue of junk bonds. Once filed, these cases move very quickly. ‘Prenegotiated’ means that the debtor negotiated the terms of the plan with some, but not all creditor groups before filing — even if no prefiling vote was taken on the plan. An example would be a plan to sell the debtor’s business, which has been drafted and negotiated with a large secured creditor before filing, but not with trade creditors.”

WHAT ABOUT MY CHRYSLER?-I’ve got two questions-how the heck can I finance the new Chrysler car I’m looking at and how do I know I won’t get stuck with a lemon should the company do an exit-stage left at some point? The Obama Administration must have known I was going to ask that question. Jake Tapper sent around a note from the White House entitled “Obama Administration Auto Restructuring Initiative” which includes answers to my questions. First-finance: “Chrysler will enter into an agreement with GMAC to provide dealer and customer financing. This agreement will continue once Chrysler has emerged from bankruptcy. Chrysler Financial has agreed to uphold and cooperate in the transition of its current agreements with dealers to GMAC. The U.S. Government is supporting the automotive restructuring initiative by promoting the availability of credit financing for dealers and customers, including liquidity and capitalization that would be available to GMAC, and by providing the capitalization that GMAC requires to support the Chrysler business.” Secondly-warranties: “Chrysler will continue to honor consumer warranties. Yesterday the U.S. Treasury made available the Warranty Support Program to Chrysler and $280 million was funded to a special vehicle available to provide a backstop on the orderly payment of warranties for cars sold during this restructuring period.” Now if I can just get the White House to authorize new music to be released on 8-track tapes that I can play in my 1973 Chrysler Cordoba (that’s the one with “rich Corinthian leather”), all my problems will be solved.                                    

H1N1 INFLUENZA A/SWINE FLU/US-Some potentially good news today concerning the H1N1 influenza A/swine flu virus. Scientists have had a chance to look at the genetic makeup of the Flu virus. What did they find? Dr. Tim Johnson on WORLD NEWS noted “a couple interesting things. There’s an amino acid missing in this, suggesting this may not be in its current form as lethal as some feared. There’s also a suggestion that it’s enough like past flu virus’, particularly the 1957 virus, that it may have produced immunity over the years, particularly in older people, which may, and I stress the world may, be the reason older people aren’t getting it yet.” Well I’m feeling better about the virus. I wonder what the folks in Ft. Worth Texas think? Ryan Owens, reporting for WORLD NEWS from there says “all 140 of the city’s public schools are closed for a week…all because one student-out of the 80 thousand students in this district-has swine flu.” Overreaction? Grace Huang notes that over 230 thousand students in 17 states were off today. In Ft. Worth? Owens says “most parents seem to support the district’s decision” but notes that “next door in Dallas, the district also has one case(of swine flu) but today officials decided to only close the one school.” But how do you keep 80 thousand kids inside without they (or their parents) going loony? Owens went to a baseball game organized by some Ft. Worth moms. If the point of the school closures was to keep kids apart, Owens points out the baseball game “is exactly the sort of close contact health officials hoped cancelling school would prevent.”

SOUTH OF THE BORDER:  The latest information from Mexico’s Health Ministry is that there are 260 confirmed cases of the H1N1 strain of influenza  – better known as swine flu.  That includes 12 confirmed deaths.  The number of suspected cases is approaching 3,000 with 176 suspected deaths.  Terry McCarthy has been following the story from Mexico City this week and has found that many people in Mexico and elsewhere don’t have much faith in the government’s handling of the crisis. For example, Terry says:   “The government has been slow to release information on where the flu victims are actually located.  We are only now learning that a significant number appear to be coming from this poorer district in northern Mexico City."  Terry spoke with one man diagnosed with the flu earlier in the week and was given a prescription for Tamiflu:  “Then he was sent home and told simply to keep away from other people.  No follow up by health officials, no tests for his pregnant wife and three year old son, nor for anyone in the cell phone shop where he worked.”  The Mexican government says it doesn’t have the staff to follow up on cases but Terry says:  “The Mexican Health Minister has bluntly refused to share data on the victims of the virus.”  Not much comfort for people who would like to think their government is capable of looking after its own. (Thanks to Ed Bailey for this entry)

THE SKINNY ON WATERBOARDING: Just when you thought you knew all there was to know about the waterboarding controversy, along comes Brian Ross with another exclusive report: “The CIA’s secret water boarding program was designed and assured to be safe by two well-paid psychologists now working out of an unmarked office in Spokane, Washington.” Identified as Jim Mitchell and Bruce Jessen, of Mitchell Jessen Associates, Brian tells us: “ Former US officials say the two men were essentially the architects of the CIA’s 10-step interrogation plan that culminated in waterboarding, demonstrated here. Associates say the two made good money doing it, boasting of being paid a $1,000 a day by the CIA to actually direct and oversee the use of the techniques on top al Qaeda suspects at CIA secret sites.”  But there was one problem.  Brian has learned that the two men apparently had no interrogation experience:  “The new documents show the CIA later came to learn that the two psychologists’ waterboard "expertise was probably "misrepresented" and thus, there was no reason to believe it was "medically safe" or effective.”  Not only that – but – Brian says: “The new memos show waterboarding was used "with far greater frequency than initially indicated" to even  those in the CIA.” (thanks to Ed Bailey for this entry)

OTHER STUFF-
–ALI al-MARI, a legal U.S. resident held as an “enemy combatant” since 2001 has pleaded guilty to one count of providing material support to al-Qaeda. Pierre Thomas notes “the headline here is that al-Marri admits to being a ‘sleeper operative’ sent by 9/11 mastermind Khalid Sheik Mohammed. The date of his arrival (in central Illinois) 9/10/01.” Thomas also notes that DOJ sources tell him “al-Marri was versed in the use of weapons of mass destruction and admitted to investigators he had a particular interest in cyanide gas. In fact that is what he was researching upon his (return) to the U.S.”
–OBAMA PRESSER VIEWERSHIP-Brian Hartman reports that “Last night’s primetime press conference to mark Barack Obama’s 100th day in office was viewed by 28.8 million people in the U.S.  The event pulled an 18.8 household rating on 10 TV networks. Viewership for the presser was 29% less than the President’s last press conference on March 24, which was seen on 11 networks. President Obama’s first primetime press conference was watched by 49.5 million U.S. viewers on eight networks.” And for those of you wondering how the FOX NETWORK’s decision to show “Lie To Me” instead of the President fared, it garnered a less than stellar 2.3/7 in the overnights.
–HELP IN THE CONGRESSIONAL PIPELINE FOR CREDIT CARDHOLDERS-Dean Norland: “The House Thursday passed legislation aimed at protecting credit cardholders from sudden interest rate increases on their unpaid balances. The Credit Cardholders’ Bill of Rights Act would prohibit card issuers from retroactively increasing rates on existing balances and would put in place a 45-day notification period for any future rate increases. The bill passed the House 357-to-70.  This was just House passage.  The Senate continues to work on its version of the legislation.”