ep in has resulted in favorable outcomes. This is the case with Lockheed, and several foreign companies have also done well. Penn Central is a different example, and one with mixed results. The results for individual employees was favorable (in general), and the company itself survived, although it was no longer in the railroad business. Amtrak, on the other hand, loses money and the freight business has never recovered (Wilner, 1997, p. 100).
In the case of Chrysler, the government would issue loan guarantees, but each of the company's creditors would also risk some amount. All of the creditors had to agree to the plan or it would not be put into place. These included some foreign creditors, as well as domestic ones. There was considerable risk associated with the plan, but the alternatives involved such large numbers of unemployment and economic downturn that it was possible that the nation itself would be hurt by the failure of Chrysler.
If Citicorp comes out against the bailout, it is likely to be perceived as causing the downfall of Chrysler (something which Chrysler itself is responsible for) and acting against the interests of the nation as a whole. Despite the precedent that may be furthered by its participation, Citicorp should invest in Chrysler and Lee Iacocca to turn the company around.
Seiberg, J. (1996, October 15). Fed repeals rules for defense loan guarantees. American Banker, p. 2.
Wilner, F. N. (1997, June). Freight roads shouldn't oppose Amtrak's bid to grow mail and express. Railway Age, p. 100.
The company that I work for has little interaction with the federal government, although because we sell computer software, our company does make sure that an attorney versed in international law reviews contracts and proposals. However, since we do not sell sensitive equipment or software (such as encryption software), our company is not directly affected by trade regulations. Nonetheless, we d...