Obama Throws Chrysler Holdouts Under the Bus

President Obama did his best to throw a holdout group of Chrysler secured creditors under the bus of public opinion.

“I don’t stand with them. I don’t stand with those who held out, when everybody else was making sacrifices,” the president said. He went on to call them “speculators.”

Chrysler today said it would file for bankruptcy protection from creditors. Earlier, Chrysler had reached agreements that would have avoided bankruptcy with the UAW, with the Canadian Auto Workers, and with its biggest secured creditors.

The U.S. government and the Canadian government also agreed to continue to provide Chrysler with financing through the bankruptcy process. In a separate briefing, senior Administration officials said they expected a reorganized Chrysler to emerge from bankruptcy in 30 to 60 days.

“This process will be quick. It will be efficient. It is designed to deal with the last few holdouts,” the president said.

The holdouts are a group of smaller creditors, who refused an offer brokered by the U.S. Treasury Department that amounted to about one-third of the face value of their share of $6.9 billion of Chrysler debt. Creditors representing about 70 percent of that amount had agreed to accept the offer. The holdouts represented about 30 percent.

That was the group Obama singled out in a televised press conference today. “They held out for the prospect of an unjustified, taxpayer-assisted bailout. Some of them demanded twice the return other investors were getting,” he said.

Obama didn’t spare Chrysler from criticism, either. He said Chrysler had a great history, but it got in trouble by, “papering over tough problems and avoiding tough choices … making less-popular, less-reliable, less fuel-efficient products than foreign competitors. That’s part of what’s brought us to the point where they had to seek taxpayer assistance,” he said.