At the beginning of the present US financial crisis, Chrysler declared bankruptcy. Chrysler, like GM, was in dire financial straits and the federal government graciously offered to "buy the companies" and keep them out of bankruptcy to "save jobs." Chrysler, as well as GM, were, in the words of President Obama and his Administration, "Too big to fail".
By the late 1970's Chrysler had a much bigger share of the market than now, but it was bankrupt as well. However, the US government did not intervene directly, as it did in 2009. At that time, Chrysler followed the natural course of any failing corporation and had to choose whether to give-up and close its doors or reorganize. In 1978 Lee Iacocca was brought in as CEO. Iacocca approached Congress on September 7, 1979 and asked for US$1.5 billion in loan guarantees. Congress reluctantly passed the "Chrysler Corporation Loan Guarantee Act of 1979" (Public Law 96-185) on December 20, 1979, prodded by Chrysler workers and dealers in every congressional district who feared the loss of their livelihoods. Chrysler not only made a come-back on following years but eventually paid this debt.
However, in 2008/2009, decisions taken by the government were quite different. On December 19, Pres. Bush announced a rescue loan, but the general "auto bailout" proposed was rejected in the Senate. A few months later the Feds organized their own "Automotive Task Force" to "fix" Chrysler and GM. President Obama appointed Steve Rattner, a longtime Wall Street deal maker, to be the White House's official "Car Czar" - literally, that was his title. Rattner was empowered as the liaison between Obama and Chrysler and GM. But in order to simplify, we'll concentrate on the Chrysler story.
Readers may wonder what is a Czar. The term "czar" emerges when President Woodrow Wilson appointed financier Bernard Baruch to run the War Industries Board in 1917. This position was dubbed then the "industry czar" and evolved to be known as the "war czar" after World War II. "Czar" became a slang term for certain high-level civil servants, such as the "drug czar" for the director of the Office of National Drug Control Policy, the "terrorism czar" for a Presidential advisor on terrorism policy, the "cyber security czar" for the highest-ranking Department of Homeland Security official on computer security and information security policy, and the "war czar" to oversee the wars in Iraq and Afghanistan. More specifically, a czar refers to a sub-cabinet level advisor within the Executive branch of the U.S. Government. The fact is that he or she is appointed at the Executive level. This keeps many appointees outside the required senatorial approval; they answer only to the President and their actions are not accountable to Congress.
- Hits: 14917