Whether Clint Eastwood Likes It or Not, Chrysler Is About Obama

A blog about business and economics.
Feb. 7 2012 12:07 PM

Whether Clint Eastwood Likes It or Not, Chrysler Is About Obama

Apparently Clint Eastwood is personally upset that some people took Chrysler's "halftime in America" to be a positive commentary on the Obama administration.

This seems totally untenable to me. Whether Eastwood or Chrysler executives like to talk about it, the company—currently enjoying double-digit sales growth—would not currently exist today if not for the Obama administration. Recall that there are two main forms of bankruptcy, Chapter 11 and Chapter 7. Chapter 11 bankruptcy is what we normally see for troubled American firms. What happens is that you get into a situation where you can't pay your bills, so you file for protection from the courts. Then you need to get debtor-in-possession financing from someone so that the firm can keep operating and generating revenue. Then, while under protection, you work out a plan to reorganize the business that usually involves concessions from workers, from bondholders, from suppliers, etc., perhaps combined with a sale to another company. The alternative, Chapter 7, is what happened to Borders recently. If you can't figure out a reorganization plan to return to profitability and nobody wants to buy you, you end up liquidating the enterprise. Instead of selling the business, Borders ended up selling all the books it had on hand. They were selling bookshelves. They sold lamps. I got a whole giant bag of stuff at half price. And that was the liquidation of a consumer-oriented retail chain. If you try to liquidate a large automobile manufacturing enterprise, you're destined to get pennies on the dollar. But since Chrysler and GM ran into trouble turning over their debt in the middle of an epic financial crisis, it wasn't possible to obtain debtor-in-possession financing, so Chapter 7 would have been the only available option.

Advertisement

I had concerns about the Obama approach at the time (concerns that I haven't really dropped) that automobile-oriented industrial policy has not really served America well for the past several decades and that he was squandering a non-replicable opportunity to get us off that path. But whether you like what he did or not, there's no denying its impact. The automobile industry of the upper Midwest is still with us specifically because Team Obama chose to ensure that it would remain there.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

History

Slate Plus Early Read: The Self-Made Man

The story of America’s most pliable, pernicious, irrepressible myth.

Rehtaeh Parsons Was the Most Famous Victim in Canada. Now, Journalists Can’t Even Say Her Name.

Mitt Romney May Be Weighing a 2016 Run. That Would Be a Big Mistake.

Amazing Photos From Hong Kong’s Umbrella Revolution

Transparent Is the Fall’s Only Great New Show

The XX Factor

Rehtaeh Parsons Was the Most Famous Victim in Canada

Now, journalists can't even say her name.

Doublex

Lena Dunham, the Book

More shtick than honesty in Not That Kind of Girl.

What a Juicy New Book About Diane Sawyer and Katie Couric Fails to Tell Us About the TV News Business

Does Your Child Have Sluggish Cognitive Tempo? Or Is That Just a Disorder Made Up to Scare You?

  News & Politics
History
Sept. 29 2014 11:45 PM The Self-Made Man The story of America’s most pliable, pernicious, irrepressible myth.
  Business
Moneybox
Sept. 29 2014 7:01 PM We May Never Know If Larry Ellison Flew a Fighter Jet Under the Golden Gate Bridge
  Life
Dear Prudence
Sept. 29 2014 3:10 PM The Lonely Teetotaler Prudie counsels a letter writer who doesn’t drink alcohol—and is constantly harassed by others for it.
  Double X
Doublex
Sept. 29 2014 11:43 PM Lena Dunham, the Book More shtick than honesty in Not That Kind of Girl.
  Slate Plus
Slate Fare
Sept. 29 2014 8:45 AM Slate Isn’t Too Liberal, but … What readers said about the magazine’s bias and balance.
  Arts
Brow Beat
Sept. 29 2014 9:06 PM Paul Thomas Anderson’s Inherent Vice Looks Like a Comic Masterpiece
  Technology
Future Tense
Sept. 29 2014 11:56 PM Innovation Starvation, the Next Generation Humankind has lots of great ideas for the future. We need people to carry them out.
  Health & Science
Medical Examiner
Sept. 29 2014 11:32 PM The Daydream Disorder Is sluggish cognitive tempo a disease or disease mongering?
  Sports
Sports Nut
Sept. 28 2014 8:30 PM NFL Players Die Young. Or Maybe They Live Long Lives. Why it’s so hard to pin down the effects of football on players’ lives.