REPORT: Obama planning to announce Chrysler bankruptcy tomorrow
by Damon Lavrinc on Apr 29th 2009 at 5:09PM 
According to a report by Bloomberg citing the usual unnamed sources, President Obama will announce tomorrow that Chrysler will file for Chapter 11 bankruptcy while continuing to work on its alliance with Fiat.
Bloomberg's source made it clear that the there are still several loose ends and the plan "is not finished yet," but it will likely involve Chrysler's strongest assets being bundled and sold to a new entity. In that scenario, Fiat would become a 20% owner of the Auburn Hills-based automaker, the UAW retiree health-care trust would take a 55% percent stake and the government would gobble up the rest. Essentially, it's the same out-of-court deal initially proposed, but now, with all the benefits (and hurdles) of bankruptcy protection.
No surprise then that Fiat's CEO, Sergio Marchionne, was right in his assessment (see below), nor is it a shocker to anyone that's been following Chrysler's trials and tribulations over the last week and beyond.
[Source: Bloomberg | Image Source: Bill Pugliano/Getty]
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Reader Comments (Page 1 of 5)
Kevin 5:13PM (4/29/2009)
Why does the President of the United States get this job? This is really starting to scare me.
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John 5:18PM (4/29/2009)
All part of the "change" happening. The line between business and government will soon completely disappear.
the_MVP_X 5:21PM (4/29/2009)
You should be, communism has already took over Europe, not it's next target it's the US.
Raffi 5:28PM (4/29/2009)
Yeah no joke, what happened to delegated powers? What does the executive branch have to do with a car company?
Taglane 5:30PM (4/29/2009)
I think some of this stuff is for the better. If Obama didn't take charge, Detroit would have been much more mess than they already are now.
Lucas 5:46PM (4/29/2009)
It's a HUGE problem for America, not just Chrysler and its employees.
"Chapter 11" is a government program, so to speak.
Chrysler received TARP money.
Obama is following up on his previous GM/Chrysler press conference.
It's a little odd, but not mind blowing. Nor is it a sign the communist rebels are knocking at the gate. :rolleyes:
Len_A 6:05PM (4/29/2009)
Have all of you, and I mean ALL OF YOU, forgot that Chrysler & GM got the TARP money from the Bush Administration? This is nothing more than an extension of what started last November and December under the previous administration. God damn, what a bunch of whiners.
paul34 6:13PM (4/29/2009)
Nope, Tagline. If no one had helped them, they would've filed for C11 a long time ago, and would've been rebuilding into a smaller, leaner, much stronger company by now. Do you not see the obvious? Billions of taxpayers dollars will go down the drain, but they still ended up going C11 anyway.
Might as well cut out the billions in waste and do C11 to begin with. But the Federal government doesn't understand silly things like "limits" or "budgets." Bush didn't, Obama definitely doesn't. Some "change." Seems like business as usual to me, but multiplied by a factor of a hundred.
Toledo Guy 7:45PM (4/29/2009)
Len_A -
Actually, Chrysler got TARP money from Congress. Which party controls Congress? hmmmmmmmmm..... Yep, GWB signed the bill, but Congress created it. Just like all bills..... The president cannot create any legislation.
Taglane -
Paul34 is right. The bailout was a huge mistake, and only delayed the inevitable. Both Chrysler and GM should have filed CH11 months ago. But the leadership at both companies knew that would mean opening up the union contracts. Ask any airline employee what bankruptcy meant to their contracts in the past few years. The democrats in control of Congress couldn't let the contracts get opened thru the 1113 process, so they pushed a bailout on a weak outgoing president.
notYou 8:25PM (4/29/2009)
Len_A: "Have all of you, and I mean ALL OF YOU, forgot that Chrysler & GM got the TARP money from the Bush Administration?"
No, but you might have forgotten the Constitution, which clearly states in Article I. Section 7 that all spending bill originate in the House of Representatives.
And, for the million dollar question - what party ran both houses of Congress when TARP passed?
Oh, sorry, you must be a product of public eduction.
PJ 9:05PM (4/29/2009)
notYou, the Republican House vote on TARP was split nearly 50-50, with 85 GOP reps voting for, 87 voting against. Hardly a black-and-white party line.
Let's not forget, either, how many pro-domestic (and self-identified Republican) folks cried last Fall about how the D3 going bankrupt would cost less than a bailout, how it was our duty to step in and assist them, that it was a matter of patriotism, yada yada...
Now bailouts = communism? *Really*? Sheesh... can't wait for this thread to get Godwin'd. I give it 20 posts.
Len_A 9:58PM (4/29/2009)
Toledo Guy, actually Congress authorized the TARP money, but it was the Bush Administration who negotiated using the loans to GM & Chrysler, from the TARP funds, AFTER the Senate walked away from voting for loans to GM & Chrysler after they couldn't get a 60 vote majority. Check you facts before you challenge someone.
Tang 5:14PM (4/29/2009)
First, the previous article, than this. Could've just saved time and put them together!
Tough times.
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risk 5:15PM (4/29/2009)
Not surprising, American car companies were/are so badly managed that they had/have no safety net to fall back on, especially after imports have been eating their sales for the past 30 years and they learn nothing from it.
They deserved it, the people who work there will get the shaft, but the EXEC's will walk out with millions.
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zamafir 5:29PM (4/29/2009)
that about sums it up, look at ford, look at chrysler, though blaming obama is fun.
jpm100 10:03PM (4/29/2009)
Yeah, the government forcing the union on them, forcing regulations designed around Japanese cars on an impossible schedule in the late 70's, ignoring Japan's currency fixing trade advantage, and a plethora of regulations like EEOC, had nothing to do with it I'm sure.
laser 5:17PM (4/29/2009)
55% owned by the union - just like the speculated GM deal. Pretty soon these jobs will become government union jobs and none of them will be fired. I'd love to see the decisions the UAW will make on products. How can these people design a car with more effort than they put into building them? Pretty soon you'll see three wheeled cars that run on Tuesday and Thursday, have fits on Wednesday, might not show up to run on Monday and will quit at noon time on Friday for a long weekend!
This is outrageous! But you idiots who voted for this clown deserve the treatment you are getting now!
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jason 5:22PM (4/29/2009)
You are stupid! Do you know that VW, BMW, and the other German auto companies have Union represenatives on their board of directors? That means that they direct the company. If anything it helps to eliminate the us vs managment scenario that has existed here. The unions see that certian changes need to be made for the betterment of the company. The German companies are doing compareatively well, even with union board members.
zamafir 5:33PM (4/29/2009)
Jason, shhhh, vw posted a profit this last quarter, and growth, stop talking about them, it makes the jingoists angry. It’s easier to hate on people trying to fix something that’s broken with your index fingers in both ears. And to ignore Ford’s position. Surly the captains of industry running chrsyler and gm should be absolved of blame. Just as the Bush administration had nothing to do with the current economic problem Obama inherited from them. It appeared out of no where 100 days ago.
Shhh… magic! We're gunna keep sellin' trucks and not maken' money son cuz that's all we done. Good Ol' Boys Club FTW!
geo.stewart 5:34PM (4/29/2009)
jason, the difference is part philosophy/ part mentality.
1) Who is the union going to attack when things go wrong? What is the purpose of the union if the union workers are the manager/owners?
2) Asian mgmt tends to establish a 25-50 yr plan for their companies. Europeans, 5-10 yr. Us mgmt teams are absorbed with next quarter, much less next model year. Union Workers- how do I get the most moeny in this paycheck?
shortening the time frame doesnt make it better