|for Business Law and Ethics: discuss the legal and ethical issues surrounding the Chrysler bailout of 1979|
|Identify and discuss two to three specific laws that apply to the company.|
Discuss how the philosophy of economist Milton Friedman may have influenced the executives of the company.
Identify an ethical framework other than the shareholder theory that applies to this situation and discuss how it may have influenced the executives of the company.
In 1979, the Chrysler Corporation was on the verge of collapse which would have had far reaching consequences for the U.S economy. Due to sharply declining income and cash at hand the company was headed towards bankruptcy and its day to day activities were being disrupted. In August 1979, President Jimmy Carter’s Treasury Secretary, G. William Miller, proposed a government intervention in the form of $1.5 billion in guaranteed loans. The sum was considered an astonishing total (Casey, 2015). It was by far the largest government bailout in US history. On September 7, 1979 Chrysler formally petitioned the US government for the loans, and on December 20, 1979 Congress ratified the appropriation in the “Chrysler Corporation Loan Guarantee Act,” which Carter subsequently signed into law.