On Auto Restructuring, Levin Asks Bondholders ‘To Step Up’
On a conference call with reporters just moments ago, Sen. Carl Levin (D-Mich.) voiced a cautious optimism over President Obama’s rejection of the automakers’ restructuring plans, saying the administration remains committed to the survival of the domestic automakers. That “absolute commitment,” Levin said, should give “important reassurance” to anyone worried about the decline of the country’s manufacturing sector at the hand of political indifference.
Levin also had a terse message for the automakers’ bondholders, who have been more reluctant than other stakeholders to make concessions as a condition of receiving bailout funds. Levin warned that the alternative to restructuring under the administration’s conditions is restructuring under bankruptcy, in which case the bondholders could lose everything.
“Bondholders will have to step up here,” Levin said. “They will hopefully see that they’ve got a pretty stark choice … Their option … is either to take a haircut or take a bath.”
They have 60 days (at most) to comply.