U.S. Rep. Steven C. LaTourette (R-Bainbridge Township) today announced that Chrysler’s facilities and employees in Twinsburg and Toledo should be spared under a deal struck today in which Fiat will purchase Chrysler after a short bankruptcy.  The Chrysler stamping plant, with 1,000 employees, is the largest employer in Twinsburg.

 LaTourette said a handful of hedge funds prevented a deal that would have averted bankruptcy entirely.  The U.S. will provide $6 billion to Chrysler, and the Canadian government and Fiat will also provide billions in assistance, both technical and financial.

 “As the president said, this should be a new lease on life for Chrysler.  I’m so pleased for the Twinsburg plant, its workers and their families, and the city,” LaTourette said.  “Mayor Procop has been a tireless advocate for the plant and has already established a relationship with Fiat.”

 LaTourette said under the new deal, Chrysler keeps its brand, and its cars will continue to be manufactured in the United States and Canada, but there will be no uptick in manufacturing in Canada over the United States.  He said dealerships will also be protected, and Fiat will initially have a 20 percent ownership stake, and that could end up at 35 percent.  He said the United Auto Workers and Canadian Autoworkers will have a large stake in the company, but it will be non-voting.  The unions made many concessions, but pensions and health benefits are protected, he said.

 In a conference call this afternoon with Chrysler CEO Robert Nardelli, LaTourette asked Nardelli what will happen to the parts suppliers that populate the 14th District under a bankruptcy.  Nardelli assured the congressman that the bankruptcy filing stipulates that Chrysler will honor all invoices from suppliers, and no suppliers will be required to return any payments they received from Chrysler for invoices in the past 90 days.  It is common in bankruptcy proceedings that already-paid invoices can be clawed back, and LaTourette said it is a very positive sign that Chrysler is protecting its vast network of suppliers. 

 LaTourette said he believes more than 30,000 Chrysler jobs will be saved, including 1,000 at the Twinsburg stamping plant, the largest employer in that city.  He also believes there will be no permanent facility closings, but facilities could begin to idle on May 4 for 30-60 days.

 LaTourette said he is saddened that bankruptcy wasn’t prevented entirely.  He said all other stakeholders sacrificed, including unions and four large banks that received billions in federal bailout funds.  LaTourette said 100 percent of the bondholders had to go along with the deal to prevent even a short bankruptcy.

 “The Administration gave Chrysler and Fiat just 30 days to strike a deal, which on its face seemed implausible.  I thank the Administration, Fiat and the autoworkers for working tirelessly to save this company,” LaTourette said.  “I hope Americans understand that the reason Chrysler is facing bankruptcy is because a handful of hedge fund operators and investment bankers chose a path of greed, even after our government gave billions to Wall Street to save their hides.  Every other every stakeholder cooperated, shed debt and made huge sacrifices to save Chrysler.”

 LaTourette, who recently met with Ferruccio Luppi, Senior VP for Business Development at Fiat, said Fiat officials intend to soon visit each state with facilities, including Ohio. LaTourette vowed to work with state and local officials on economic development proposals, including tax abatements if necessary, to ensure that Chrysler maintains its presence in Ohio. Fiat officials have already toured the Twinsburg facility once with Twinsburg Mayor Katherine Procop.