LANSING – With thousands of jobs now at risk after Chrysler filed for bankruptcy, House Democrats today passed a resolution calling on the state to pull investments out of the funds that sabotaged Chrysler's reorganization. The resolution also called on other states to divest their holdings in the hedge funds.
"Thousands of Michigan jobs and the future of Chrysler are on the line because these wealthy hedge fund managers put their short-term interests ahead of our workers and the auto industry," said State Representative Tim Melton (D-Pontiac), who sponsored the resolution. "These hedge fund managers stood in the way of saving Chrysler and have now put thousands of Michigan jobs in jeopardy. Michigan should pull its investments."
The bankruptcy of Chrysler is expected to have a devastating ripple effect on the economies of Michigan and the nation. Chrysler employs more than 38,000 workers in the United States, with 21,150 residing in Michigan. Nearly 49,000 of the 120,059 Chrysler retirees who receive pension checks are Michigan residents.
"It's in the long-term interest of us all to save these jobs and build a vibrant Chrysler and auto industry," said State Representative Deb Kennedy (D-Brownstown) "These hedge funds have made lucrative profits and now have turned their backs on Michigan workers. They balked at the chance to put greed aside and act for the good of everyone."
Chrysler filed for bankruptcy today in New York. President Obama's auto task force tried to get all 46 of Chrysler's secured lenders to agree to a debt-reduction deal until talks broke down Wednesday. The leadership of Oppenheimer Funds, Perella Weinberg Partners' Xerion Capital Fund, and Stairway Cap Management refused to erase their debts with Chrysler and also reportedly advised other lenders not to support the restructuring plan.
The resolution also calls on the governors of Delaware, Illinois, Indiana, Missouri, Ohio and Wisconsin, states that have Chrysler facilities, to take similar action and divest.
"None of our tax dollars should go toward putting Michigan families out of work," said State Representative Lisa Brown (D-West Bloomfield). "I call on our state to make a full divestment from those hedge funds that are putting our jobs at risk as they hold out for greater profits. The future of Chrysler and so many hard-working families are now at risk due to their short-sighted actions."