• May 5th 2009 at 6:39PM
  • 34
Repayment of the $4.5 billion life-line in U.S. and Canadian loans that a federal bankruptcy court allowed yesterday is "highly unlikely," according to Ron Manzo, a top company adviser. To Chrysler's bankruptcy legal team, that is not the issue. Urging the court "to let this company live," automaker attorney Corinne Ball said "the survival of Chrysler's business is at stake in these proceedings, as is the fate of hundreds of suppliers and thousands of Chrysler dealers around the country."
In other related developments:
  • Chrysler's salaried employees will be ordered to take a two-week unpaid furlough saving the company $21 million. Hourly workers are already on furlough.
  • Incentive plans to dealers will be cut by 25 percent in May, and 50 percent in June.
  • Chrysler is losing 30-40 dealerships per month. They now have fewer than 3,200.
  • In papers filed last week, Chrysler expects the U.S. Treasury to forgive the $4 billion loan made in January.
  • The company's biggest obstacle to making a speedy exit from bankruptcy court are the dissident creditors, holding $6.9 billion in first-lien debt.
[Source: The Detroit News]

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    • 1 Second Ago
      • 6 Years Ago
      From Business Insider:


      "Creditors to Chrysler describe negotiations with the company and the Obama administration as “a farce,” saying the administration was bent on forcing their hands using hardball tactics and threats.
      Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said. …
      The sources, who represent creditors to Chrysler, say were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person said described the administration as the most shocking “end justifies the means” group they have ever encountered. Another characterized Obama was “the most dangerous smooth talker on the planet- and I knew Kissinger.” Both were voters for Obama in the last election.
      One participant in negotiations said that the administration’s tactic was to present what one described as a “madman theory of the presidency” in which the President is someone to be feared because he was willing to do anything to get his way. The person said this threat was taken very seriously by his firm."

      Great. Megalomania has worked out so well in national leaders in the past.
      • 6 Years Ago
      No Mikhail-noone's words were forced into President Obama's mouth-HE SUPPORTED THE BAILOUT.

      The money was given by Bush, Pelosi, Obama and others.

      Bush is gone-President Obama is still pouring $$$ down a hole.

      Huffington Post- 12/19/08

      In a statement sent out just now from his communications shop, President-elect Barack Obama announced his agreement with the Bush administration's decision to lend a $17.4 billion loan to troubled automakers.

      "Today's actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers," the statement reads. "With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together -- including labor, dealers, creditors and suppliers -- to make the hard choices necessary to achieve long-term viability. The auto companies must not squander this chance to reform bad management practices and begin the long-term restructuring that is absolutely required to save this critical industry and the millions of American jobs that depend on it," said Obama.

      No real surprise here: Obama and Bush -- along with most congressional Democrats -- have stated their support for helping out the automobile industry before. But with the Bush administration ultimately deciding to use TARP funds for the distressed companies and Obama supporting the move, odd political fault lines have been firmly drawn. Obviously, the outgoing and incoming presidents are of different ideological ilk. But both saw compelling reason to bail out domestic auto manufacturers. It was Senate Republicans, in particular those from the South, who have positioned themselves as the alternative voice: the anti-bailout caucus.

      • 6 Years Ago
      Nobody should pay Chrysler their car notes, if you do, you're is freeking silly. How the freek Chrysler borrowed 4.5 billion from us and is not to pay it back. Chrysler borrowed our tax dollars, WTF. If some one skips their payment Chrysler will quickly take repossesion of the unpaid car note. Will it be reasonable to burn their dealers down for not paying us back.

      So much for lifetime warranty. All of this people that belive chrysler will warrantied their cars for life fell for this. Listen when is too good to be true, it is.
      • 6 Years Ago
      • 6 Years Ago
      Got me .. I was surprised. I guess it is not a surprise once they were in bankrupsy.

      I suppose that is another taxpayer cost thanks to those investor holdouts who force Chrysler into Chapter 11.
      • 6 Years Ago
      Want to know who's making money on this? The Lawyers!!
      Legal cost are running $30 million a week.
      • 6 Years Ago
      I agree, the lawyers are king. Majority of the time (90%) they are lobbyists for the democrat party too, who are more in favor of laws which confuse people which then direct the confused people into the pockets of these lawyers.

      The good news is, conservative Americans aren't the one thats being screwed by the government, financially poor democrat Americans are also being screwed, harder I might add.
      • 6 Years Ago
      All i can say is "DUH!!!" Is anyone surprised by this?
      • 6 Years Ago
      And to add to what you said those people are already out of their jobs and have been for months, the federal money Obama and friends have been pumping into Chrysler have done nothing but keep the vegetable's pulse. It's already brain dead.

      If you think the numbers involved in this bankruptcy are staggering just wait until GM is in the same position on June 1st. It's going to be vastly worse.

      The best thing would have been to let them both fail. They would either reorganize or liquidate. Ford would have picked up a good portion of their business as well as the foreign automakers. There was no reason to waste everyone's money on Chrysler or GM aside from the fact that the UAW has been a staunch sorce of Democrat votes for decades.
        • 6 Years Ago
        TriShield, good job showing your ignorance on the politics of the bailout. You might want to check out the date when Chrysler got its money from the government and who the president was at the time.
        • 6 Years Ago
        and Dorp, you may want to read the Constitution. The President doesn't make laws, Congress does. Congress takes the blame for this cluster. Run by the same party last fall and today.
      • 6 Years Ago
      Americans have seen so many "Lights At The End Of The Tunnels" they are completely blind. The Chrysler Bankruptcy will be a fiasco. Round two Chapter 7 liquidation will be a fiasco. The Fiat mirage will be a fiasco. And in the end billions of tax dollars lost for nothing. We might as well just take the money and send it to John Murtha's family
      • 6 Years Ago
      So...when they ask for more money, why should we listen? They employ something like 40,000 people. That's not enough to cause a mega-disaster in the economy. All of their market share will be absorbed by Ford or another automaker. What the hell are they doing with my tax dollars? It's a dead company. Let it die. Stop giving it my money.
      • 6 Years Ago
      as if anyone surprised by this...
        • 6 Years Ago
        I can think of a few fanboys here that are.
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