Delay Of Chrysler Sale

WASHINGTON (Dow Jones)--Auto-industry allies on Capitol Hill stepped up pressure Monday on a group of Indiana pension funds to drop their opposition to the sale of most of Chrysler LLC's assets to Fiat SpA (FIATY), after the Supreme Court agreed to delay the sale. But a Republican lawmaker defended the group's right to argue its case before the court.

Rep. John Dingell, D-Mich., warned that a delay of the deal could lead to Chrysler's liquidation, costing thousands of jobs and millions of dollars in lost tax revenue for auto-manufacturing states. He called on the Indiana pensions funds to "come to their senses."

"By refusing to make the relatively small sacrifices that would avert a calamity, the pension funds will instead create a great catastrophe, which is the same kind of shortsighted thinking that got us into the Great Depression," Dingell said in a statement. "Make no mistake: If these pension funds can't see past their own pain, they threaten to create a kind of agony for their state and the nation that is difficult for most people to imagine or condone."

Rep. Gary Peters, D-Mich., whose district includes Chrysler's headquarters, warned Indiana would lose millions of dollars in tax revenue and 4,000 jobs if Chrysler is liquidated.

"It is quite clear that Indiana's case is not in the best interest of the people of Indiana," Peters said in a statement. "Other stakeholders, including other secured lenders and Chrysler's auto workers, accepted shared sacrifice because they recognized their interest was better served keeping Chrysler alive rather than forcing liquidation. Why the officials who decided to take their objections all the way to the Supreme Court can't recognize this is beyond me."

Rep. Candice Miller, R-Mich., said she was "very disappointed" by the stay and "mystified why these litigants continue to pursue their case." She added, "It is my sincere hope that Justice Ginsburg or the full court will issue a ruling expeditiously that will allow Chrysler to emerge from bankruptcy and end this process."

But Rep. Jeb Hensarling, R-Tex., who has criticized the Obama administration's bailout of GM and Chrysler as an improper use of taxpayer money, praised the Supreme Court's move. He said the case raises fundamental questions about due process, equal protection under the law and the possible misuse of financial-rescue funds on auto makers, and that those questions must be resolved before the sale goes through.

"The smallest bondholder in GM who may be part of the Indiana pension funds - they deserve their day in court," Hensarling said in an interview with Dow Jones Newswires. "This is about their retirement. This is about their children's future, and they shouldn't be browbeaten by the administration, the UAW" and company executives, he said.

A White House spokeswoman declined to comment shortly after the ruling.



from the wall street journal