Today is April 30th, the government-imposed deadline for Chrysler to show that it can be a viable automaker. Early reports are saying that Chrysler is going to file for a “short surgical bankruptcy” to avoid liquidation. The bankruptcy is expected to last 30 to 60 days. Apparently, some lenders refused a U.S. Treasury Department demand to reduce the amount of money that Chrysler owed them.
However, it’s not all bad news for Chrysler. Many reports say that the government will use the bankruptcy process to join the struggling Auburn Hills automaker with Fiat.
Italian newspaper Corriere della Sera already had headlines running this morning, “C’Ã¨ l’accordo,” or “It’s a deal.”
Perhaps the strongest signal of a Fiat/Chrysler partnership came last night when the UAW ratified a contract with Chrysler and said “the agreement includes commitments from Fiat to produce a new small car in one of Chrysler”s U.S. facilities”
President Barack Obama will be on TV shortly to announce more details. We’ll be live blogging the event.
Live: Obama: Necessary steps have been taken to give Chrysler a new lease on life.
Live: Obama: I’m please to announce that Chrysler and Fiat have formed a partnership that has a strong chance of success. (it’s official ladies and gentleman).
Live: As a part of their agreement every dime of new taxpayer money will be paid before Fiat can take a majority ownership stake in Chrysler.
Live: Obama: Fiat has already transferred new technology to Chrysler.
Live: Obama getting angry at group of “hedge funds who held out for unjustified taxpayer funded bailout.” Obama: I don’t stand with those seeking to benefit at expense of others.
Live: Obama: I support Chrysler’s plan to use bankruptcy laws to move forward. – bankruptcy is confirmed.
Live: Obama: If you are considering buying a car I hope it will be an American car. I want to remind to you that if you decide to buy a Chrysler, your warranty will be safe because it is backed by the U.S. government.
Live: BREAKING: Chrysler CEO Nardelli will leave company after emergence from Chapter 11 bankruptcy.
Nardelli on Power Lunch with CNBC:
Live: Nardelli: This ended up being the only solution, not one I would have chosen. I don’t know if this can take only 60 days, but it will be relatively quick.
Live: U.S. government did not ask Nardelli to step down. It was his own decision to step down and he will see the company through bankruptcy. “I felt this would be a appropriate time for me to step down.”
Live: U.S. government will select six board members, while Fiat will select three. Board will then select new CEO.
Live: Chrysler will adopt Fiat technology and distribution heavily into the Jeep brand and other Chrysler models.
Live: Nardelli: I hope GM’s restructuring process is tremendously successful.
– By: Omar Rana