McCain says Chrysler unlikely to survive

November 15, 2009

McCain says Chrysler unlikely to survive

The Detroit News

Arizona Sen. John McCain said Sunday that Chrysler Group LLC is unlikely to survive, despite receiving nearly $15 billion in government loans.

McCain, the 2008 Republican presidential candidate, reiterated his opposition to the $80 billion auto industry bailout begun by President George W. Bush last December.

"No, I don’t think we ever should have bailed out Chrysler and General Motors," McCain said in Arizona, where he was serving as grand marshal of at the NASCAR Sprint Cup series race at the Phoenix International Raceway. "We should have let them go into bankruptcy, emerge and become viable corporations again."

Chrysler spokeswoman Shawn Morgan declined to comment on McCain’s remarks.

Both GM and Chrysler underwent bankruptcy restructurings this summer, and have since emerged as new companies with healthier balance sheets.

McCain suggested the decision to inject billions into the automakers was because of the political clout of the United Auto Workers union — and other unions.

"It was all about the unions. The unions didn’t want to have their very generous contracts renegotiated so we put $80 billion into both General Motors and Chrysler, and anybody believes that Chrysler is going to survive, I’d like to meet them," McCain said.

Fiat SpA received a 20 percent stake in Chrysler as part of the Auburn Hills automaker’s exit from bankruptcy and Fiat’s CEO, Sergio Marchionne, is now running Chrysler. The company outlined this month a vision for the next five years.

The UAW insists it made tough sacrifices to save the automakers.

As part of the deal, the UAW agreed at GM and Chrysler to $7 an hour in givebacks in wages and benefits, gave up the right to strike through 2015 and swapped billions in health care payments owed to retirees in exchange for equity in the automakers. The UAW has also seen tens of thousands of members accept buyouts or early retirements.

"We see the automotive industry, and my heart goes out to the citizens of Detroit, really in the tank, and yet we have manufacturing plants all over the South, which are not bound by some of the labor rules and contracts that make them non-competitive," McCain said.

This isn’t the first time McCain has criticized the auto bailout, even though he supported aiding automakers during the 2008 campaign for president.

"Chrysler finally filing for bankruptcy! Wish they would have done it months ago as I called for — could have saved taxpayers $26.7 billion!" he wrote May 1 on his Twitter account.

He also compared the deal to communism and socialism. "President (proposes) government/union takeover of GM and Chrysler — Lenin would be smiling," he wrote on April 30, referring to the former Soviet leader.

Two days earlier, he wrote: "UAW eventually owning 55% of Chrysler stock and the U.S. Gov owning the rest — if that isn’t socialism, what is?"

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