Bailed-Out Banks Don't Want to Bail Out Chrysler

Lawmakers say rescued banks should cooperate in auto rescue plan
By Rob Quinn,  Newser Staff
Posted Apr 17, 2009 7:44 AM CDT
Chrysler must seek a deal to reduce its debts under President Obama's rescue plan.   (AP Photo/David Zalubowski)
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(Newser) – Auto task force Steven Rattner's request that four big banks write off their $7 billion debt to Chrysler in return for nothing met with a big no from dropped jaws, reports the Washington Post. JPMorgan Chase, Morgan Stanley, Citigroup, and Goldman Sachs are seeking a better deal, but critics argue that the banks rescued by the government should now help the government rescue Chrysler.

"These are banks that have received substantial investments from the government," said Rep. Gary Peters, a Michigan Democrat. "We hope they will understand that what was given to them was not for their benefit, but to get the economy moving again." Lenders say privately that Rattner's request was unfair. Meanwhile, the clock's ticking. Analysts believe a deal for Chrysler to merge with Fiat will collapse and force the firm's liquidation if its debt burden isn't eased.