With billions of dollars and thousands of jobs at stake, it's no surprise that the restructuring of Chrysler LLC has turned into a heated affair. Even so, the rhetoric on both sides has gotten a little wild. How wild? Try a full-throated invocation of 9/11 on cable news and a reference in an e-mail to a guy on the other side as a terrorist.
Indiana Treasurer Richard Mourdock,
on CNBC earlier this week to explain why the state is trying to block Chrysler's quick reorganization that would mean a substantial loss to the state's pension funds, explained that he is taking a stand against a plan that would treat unsecured union debt better than the secured debt Indiana held. In other words, he is fighting for the rule of law.
Mourdock, a Republican, then references the days after 9/11, asking why President Obama is willing to cite special circumstances as an excuse to bend or break creditor law but is unwilling to say that in the months following the World Trade Center attacks there was a special circumstance that justified aggressive interrogation.
Yipes. But before you spend too much time puzzling over whether usurping creditor rights is the inverse of banning water-boarding, here's another urgent question: Is saving Chrysler a national interest on par with preventing deadly attacks by the likes of Osama Bin Laden? That was the implication of some name-calling by a Treasury official in an e-mail revealed in court on Wednesday.
As The Deal's Jamie Mason
notes on The Deal Pipeline (subcription required), an e-mail sent by Treasury's Matt Feldman characterized White & Case LLP's Thomas Lauria, counsel to the lenders who were holding out for better terms from Chrysler and the government, as a terrorist.
It was Lauria who caused a firestorm earlier this month when
he went on the radio in Detroit and said one of his clients was "directly threatened by the White House." That suggestion of bullying might have started the escalation of the rhetoric, with conservatives soon after referring to the administration as "gangster government."
But does that make Lauria a terrorist?
Whether the government has overstepped in the restructuring of the auto industry is a valid question. And creditors, dismissed by the president himself as "speculators," certainly do have reason to feel like they have been portrayed as villains. But surely we can all agree that none of what is happening in the back rooms of Washington or at the U.S. Bankruptcy Court in Manhattan really is comparable to 9/11.
The bad news is the bankruptcy of General Motors Corp. (NYSE:GM), a far more complex company with new sets of creditors, is right around the corner. Expect more raw nerves, more anger from jilted parties and more hyperbole. -
Lou Whiteman
Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman
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