• Apr 30, 2009
Building on speculation that first leaked yesterday is word this morning that a pair of Obama administration officials have told The Associated Press that Chrysler will indeed file for bankruptcy. The decision was apparently reached after debtor negotiations with hedge funds "crumbled overnight."

If the AP's sources are correct, we assume that the Chapter 11 announcement will be made quickly – likely later today. According to the report, President Obama is slated to talk about the auto industry at noon, at which point we wouldn't be surprised to hear him break the news.

A bankruptcy filing by the Pentastar is not expected to rule out a merger with Fiat, or indeed, trigger the shuttering of the company. Officials close to the proceedings have already gone on record saying that a deal with the Italian automaker could happen inside or outside of bankruptcy, and that arrangement could be finalized as early as today.

[Source: The Associated Press | Image: Andrew Cutraro/AFP/Getty ]


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  • 34 Comments
      • 5 Years Ago
      OMG I Am Shocked!

      seriously though, I would love to get my hands on an Alpha in North America, so the deal with Fiat might be cool.
        • 5 Years Ago
        OMG you mean Alfa Romeo
      • 5 Years Ago
      Please make Chrysler go away forever
      • 5 Years Ago
      So in the end, it wasn't unions who pushed Chrysler over the edge...it was hedge fund folks, similar to the ones who busted the economy.

      Heh. Wonder how BoxerFanatic and his conservative drones will spin this one.

      • 5 Years Ago
      Free of the noose of the UAW? Wow, how little you know about bankruptcy proceedings...maybe a lot more breathing room but it wasn't even the UAW that caused them to go into bankruptcy today (well at noon at least when they plan to file). Its those 3 or so hedge funds (including you Oppenheimer :)) who just wouldn't give in to the debt restructuring deals. Everyone, from suppliers to the UAW agreed to the debt restructuring deals but them! Anyway, we'll see how 'quick and surgical' it is (e.g. it'll take years, not weeks or months as advertised).
        • 5 Years Ago
        If you can get 100% of your money why take 20%? Their debt is probably covered by Credit Default Swaps. The hedge fund managers have a fiduciary responsibility to their investors, not tax payers. That is the government's responsibility, this should have happened in 2008.
      • 5 Years Ago
      As I said in the preceding blog entry, this shouldn't be a surprise to anyone. It was always in the plans, but it was hoped that it wouldn't go down that path, except that a collection of 40 or so small banks and hedge funds didn't want to accept the Treasury Department's recommendations like the big banks did. They will now take whatever the bankruptcy judge decides to give them. It could be better than what Treasury offered them. It could be worse. But it will be a quick BR, maybe a test for what GM will go thru a month from now. This could be an opportunity for a culling of the dealerships. I'm sure Chrysler has list of dealers they would like to get rid of.


        • 5 Years Ago
        So you never heard of CDS..
      • 5 Years Ago
      It was the hedge funds who refused to budge.

      The major banks were cooperating.
      • 5 Years Ago
      It's about f*cking time!
      • 5 Years Ago
      I agree with Swoop. We could have really used that money to protect people from swine flu.
        • 5 Years Ago
        Not unexpected at all - but a shame that a few lenders (which were probably key contributers to the down economy in general) couldn't just take their lumps like everyone else.

        I've always thought CH11 was the RIGHT thing for Chrysler and GM. Gives them a chance to break contracts, get legacy costs under control, and come out much leaner than before.
        • 5 Years Ago
        @Zamafir

        You're right, and thats what I was trying to get across. They are not known for taking a dive, but this is a way different world now when it comes to money and how its handled. Something or nothing -- and if the Fiat/Chrysler alliance is signed tonight, those holdouts are less likely to get what they want.
        • 5 Years Ago
        Hahaha, you're accusing financial companies of being responsible for this mess?
        • 5 Years Ago
        Was not meant to reply to this. (Swine flu comment)
        • 5 Years Ago
        "Not unexpected at all - but a shame that a few lenders (which were probably key contributers to the down economy in general) couldn't just take their lumps like everyone else."

        Seriously? When was the last time you heard of hedge funds just 'taking their lumps like everyone else', they're the reason the talks failed and their a large part of the reason our economy is where it is. When a collection of very wealthy people drop a large amount of money on something, they're not keen to simply let all that they've leveraged disappear.

        Ironically, they'll end off a lot worse after Ch 11 then they would have, had they taken the deal. I'm pretty tired of the hedge fund bs.
      tpfilm
      • 5 Years Ago
      So, Fiat and Chrysler merges we get Chrysler branded Fiats. Has anyone thought about one of Fiat's other partners: Suzuki. Fiat and Suzuki developed the SX4 together. Fiat builds their version and European SX4s in Hungary. Could this lead to Chrysler getting some choice Suzuki models? Chrysler Swift? Get rid of Compass and Patriot and get Jeep version of the SX4? A Jeep version of the Samurai (it's still made and sold in rest of world)?
        • 5 Years Ago
        @tpfilm
        My guess is there will be a relatively significant lineup change.

        Also, don't expect to get anything badged FIAT. Chrysler will basically end up rebadging FIAT models in the US. Basically the same suck system they used with Renault/Mitsubishi.

        Wait, isn't that what was part of the problem initially with Chrysler?
        • 5 Years Ago
        @tpfilm
        What choice Suzuki models?
      • 5 Years Ago
      "Ironically, they'll end off a lot worse after Ch 11 then they would have, had they taken the deal."

      And you're so sure about this ... how?
        • 5 Years Ago
        That was a reply to zamafir above about the hedge fund holders.
      • 5 Years Ago
      I wonder what Memphis has to say now. :D
        • 5 Years Ago
        "I have NEVER seen a Chrysler-made car and said to myself "wow, that's nice, I have to buy one". "

        Then you've missed out on some very nice *mass market* cars.

        If you're into super expensive Euro stuff, then you were never a potential customer anyway, and your comments are not relevant. I'm sure there are some Mercedes and BMW posts somewhere for you to comment on.
        • 5 Years Ago
        What are you two going on about?
        • 5 Years Ago
        I'd love to continue this battle of wits with you, but its painfully obvious you're un-armed.

        At least I have an opinion of my own, instead of just listening to what the media has to say. Doom and gloom sells my friend. And you've fallen for it. I also have sympathy for a company that was completely ruined by Daimler, and who knows where they'd be today if the merger hadn't taken place.

        You don't have a rational thought behind anything you say other than to get a reaction, so you've got it.
        • 5 Years Ago
        Hey, you're putting words in my mouth and calling yourself a retard there.
        • 5 Years Ago
        I'm being ridiculed for being a happy owner and supporter. There's no real thought process behind his ramblings.
        • 5 Years Ago
        Aprime, your claims of language teabagging and self-diagnosis of lower cognitive mental abilities are unfounded. In previous posts you have referred to him as a fanboy and

        HOLY CRAP CHRYSLER JUST FILED

        OK, gotta go check this out, but yeah. Stop being mean to MemphisNET.

        [/whiteknight]
        • 5 Years Ago
        I have a soft spot for Chrysler because I'm a happy owner. Aprime feels im retarded.
      • 5 Years Ago
      Can I buy Plymouth? I'll give them a dollar for it.
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