NYT: U.S. reportedly preparing Chrysler for bankruptcy... as early as next week
by Chris Paukert on Apr 23rd 2009 at 4:27PM 
According to a story from The New York Times, the Treasury Department and Chrysler are readying Chapter 11 bankruptcy documents for filing as early as next week.
The report goes on to say that the filing carries with it an "agreement in principle" with the United Auto Workers that would protect members' benefits packages, including pension and retiree health care obligations.
Whither Fiat? Apparently, the Italian automaker is still very much in the picture, although under this arrangement, it would not reach its stake-holding deal until after Chrysler is already in bankruptcy court. The big outstanding question is where this leaves Chrysler's lenders, who are owed nearly $7 billion.
Some industry watchers are apparently wondering aloud if the bankruptcy filling preparation work is merely a ploy to turn the screws on lenders, who have balked at previous proposals designed to reduce Chrysler debt. More details at the link below.
UPDATE: Chrysler's response to the NYT article is posted below the fold.
[The New York Times | Image: Bill Pugliano/Getty]
PRESS RELEASE
Chrysler LLC Response to New York Times Report
Auburn Hills, Mich., Apr 23, 2009 - "On March 30, the Administration recognized the viability of Chrysler LLC and its products, in combination with a Fiat alliance.
Chrysler has consistently said that its viability will be enhanced through an alliance with Fiat, as it represents a change in the Company's business model that expands its global competitiveness.
As we move forward in this process, we believe it's important to keep all options open. Chrysler will continue to work through the end of the month, based on the direction given by the Presidential Auto Task Force, to secure the support of the necessary stakeholders and reach a successful conclusion that the Administration and U.S. Treasury deems appropriate."
Reader Comments (Page 1 of 4)
Aprime 4:34PM (4/23/2009)
Good night, sweet prince.
Reply
airswingman 6:20PM (4/23/2009)
No product + financial games + "Americans cant live without me" + "we are proud we build the 300 to compete with Benz E" = As you brew,so you must drink = DEAD END
elprogramer 1:03AM (4/24/2009)
Yeah, because being gutted by Daimler is really their fault.
Francis 9:16AM (4/24/2009)
and nothing of value was lost.
Jrejre 4:35PM (4/23/2009)
Damn. The Challenger was the best looking of the new muscle cars too.
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Aprime 4:41PM (4/23/2009)
That doesn't mean it's going away.
mikecanada 4:44PM (4/23/2009)
For heaven's sake, don't prop up this terrible car company. It's time is over. Put the money into income supports and career retraining for the workers.
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jim 6:41PM (4/23/2009)
I don't disagree with the need to let Chrysler die, nor the fact that the workers need retraining, but the question is always retrain them for what? What industries exist in these communities that can absorb those workers and what type of skills are required of a worker in these industries? Is it reasonable to assume that a 1-2 year training program would provide those skills?
If the jobs don't exist locally how will workers and employers be matched in a different location and how will the moving take place if real estate is involved?
Consider that we're talking about 200,000 people when you add up Chrysler employees, dealer employees and supplier employees. A lot of hurt.
mikecanada 6:47PM (4/23/2009)
@ Jim. What you're saying is so true. There are two Chrysler Assembly Plants within 150 miles of where I live. There would be huge job losses without question, with not only Chrysler employees, but all of the parts suppliers too.
It's just hard to imagine any other scenario than to dissolve. It's likely someone would pick up the minivan plant, and the Dodge Truck and Jeep lines.
Perhaps it's not as completely gloomy. Lots of pain for people and families, but better than pouring more and more tax money into something that doesn't appear viable.
drudometkin 4:45PM (4/23/2009)
Hope they come out of this a stronger company.
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thomas 5:04PM (4/23/2009)
+1
Rich 5:07PM (4/23/2009)
Smaller.
And with good products instead.
mikemaj82 4:47PM (4/23/2009)
For those of you who don't live in the NJ/NY area...the NY Times is not the most reliable newspaper...
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GROM 4:47PM (4/23/2009)
How many billion did Barack spend to "save" this company ?
13B ? More ?
For what ? what a waste of $.
Meanwhile to put it into prospective Tesla had hard time securing a loan for couple millions.
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tifosiotaku 4:49PM (4/23/2009)
::facepalm::
thomas 5:01PM (4/23/2009)
tesla employs a fraction of the people chrysler does. they have 1 car in production and one dealership. what kind of F'ed up perspective are you trying to create???
MemphisNET 5:08PM (4/23/2009)
It was a loan - just like the late 70's, it will be paid back. Want to get pissed at money shovelled into the fire? Look no further than your own bank.
$0.03 5:48PM (4/23/2009)
Your boy George threw the first money at them. Plus, I just read a report on Yahoo that this story is false and Chruysler is not about to file bankrupcy.
PJ 6:12PM (4/23/2009)
"How many billion did Barack spend to "save" this company ?"
Aaaaargh...
The bailouts passed in the House December 10th, 2008 and were finally approved December 20th.
Remember who was in office then? Come on America... think hard! You can do it!
tekd 7:25PM (4/23/2009)
@Memphis
Except loans don't necessarily have to be repaid if you're bankrupt, in which case the loans become free money. Whine all you want about the banks but many of them are profitable again already and are trying to pay back the loans.