FOR IMMEDIATE RELEASE 

Monday, June 8, 2009   
                                          

CONTACT: Cullen Schwarz
                                                                       
Office: (202) 225-5802

CONGRESSMAN PETERS: INDIANA'S CASE NOT IN BEST INTEREST OF PEOPLE OF INDIANA

Washington, DC – Congressman Gary Peters, whose Michigan congressional district is home to ChryslerWorld Headquarters, three GM plants and more auto suppliers than any district in the country, issued the following statement today regarding the State of Indiana pension funds’ attempt to stop Chrysler from achieving a swift emergence from bankruptcy.  Indiana’s pension funds will lose only $4.8 million if Chrysler is allowed to emerge from bankruptcy, while the State will lose over $20.7 million in tax revenue if Chrysler is liquidated, as well as incurring tens of millions in additional lost revenue and expenses and putting 4,000 Indiana residents out of work.

“It is quite clear that Indiana’s case is not in the best interest of the people of Indiana.  Other stakeholders, including other secured lenders and Chrysler’s autoworkers, accepted shared sacrifice because they recognized their interest was better served keeping Chrysler alive rather than forcing liquidation.  Why the officials who decided to take their objections all the way to the Supreme Court can’t recognize this is beyond me.  Indiana officials are fighting over $4.8 million at the risk of costing their state over $20 million in tax revenue, tens of millions more in related costs and putting 4,000 of their own people out of work.”

Background:

News reports today indicate that the Indiana pension funds challenging the Chrysler-Fiat alliance purchased the $42 million in Chrysler debt they currently hold for $17 million dollars and that Chrysler plans to pay the funds $12.2 million after the Fiat alliance is final—meaning the funds will lose $4.8 million when Chrysler emerges from bankruptcy.

However, according to Chrysler, the automaker paid $20.7 million in taxes to Indiana last year.  Further, Chrysler estimates that it employs approximately 4,000 Indiana residents.  Under a Chrysler liquidation, these residents would all find themselves immediately out of work.  The state would lose revenue from reduced tax revenue collected from these employees and Indiana’s economy would be negatively affected further reducing state revenue.  At the same time, the state would incur additional costs for these unemployed workers.  For example, if these 4,000 employees received Indiana’s average weekly unemployment benefit of $290, that would cost the state $1.16 million. 

Ultimately, the case Indiana officials’ filed jeopardized the jobs of 4,000 residents and tens of millions of dollars in lost revenue or increased expenses, all over $4.8 million.

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