Fundamental problem

The US government is pressuring the creditors of General Motors and Chrysler to help the carmakers return to health by swapping debt for equity. That might work if the lenders thought the equity was worth something. And it might be - if the two companies merged and crunched out substantial costs. The trouble is the government seems to favour trying to save Chrysler by bringing in Fiat as a minority shareholder. It’s easy to see why this option appeals to policymakers. It would potentially leave ...