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When President Obama announced that Chrysler LLC would be filing for Chapter 11 bankruptcy in late April, he mentioned that the beleaguered automaker could emerge after 60 days. "Well, that's not so bad," we all thought. Turns out that as details of Chrysler's reemergence begin to surface, the actual time table for bankruptcy to be completed could be as much as two years, not two months.

A condition of Chrysler's emergence is splitting the company into two entities – a good Chrysler and a bad Chrysler. The good entity would contain everything within the company that's valuable like the Jeep brand and Dodge trucks and their associated assembly plants. That entity would be the one controlled by Fiat and owned by the UAW VEBA fund, the U.S. and Canadian governments and Fiat. President Obama was likely referring to this entity when he mentioned the 60-day time table, as a judge has already scheduled these good assets to be transfered into the new entity by May 27th.

The other entity, the bad one, will contain non-valuable assets like shuttered plants and be responsible for most of the companies debts and liabilities. Governments, creditors and any one else owed money by Chrysler would have to wait for these bad assets to be sold before they could receive any payment, and what they'll get is likely pennies on the dollar of what they're owed. This process of selling off the diseased parts of Chrysler is what administration officials are now reportedly saying may take up to two years. By that time, the good Chrysler may be humming along nicely under the leadership of Fiat while the last remaining vestiges of what went wrong are sold to the highest bidder.

[Source: Bloomberg, Source Image by Scott Olson/Getty ]


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  • 39 Comments
      • 6 Years Ago
      The bird crap all over the car in the pic is a nice touch.
      • 6 Years Ago
      The Caliber SRT is not a bad car if you are looking for performance at a low price.
      • 6 Years Ago
      I think the compass, commander, calibur, avenger, nitro and the journey are all part of bad Chrysler.

      The vehicles I think will survive, Jeep Grand Cherokee, Liberty, 300, Charger, Challenger, Mini-Vans, Dodge Trucks.

      Again just my 2 cents....
      • 6 Years Ago
      My Dodge Neon broke down in the middle of the highway at 60k miles. It has singlehandedly contributed to my phobia of American cars in general, as much as I like GM & Ford vehicles, I'm sticking to what works for me currently, an Acura. Even though I heard about the improved quality of American vehicles in general, I am still leery.

      On second thoughts, that new Ford Fiesta is real tempting or the Fiat 500. Then again, maybe I will just get a Honda Fit, at least the residuals are great.
        • 6 Years Ago
        "My Neon broke down at 60k, waaaaaaa..."

        So get out a 10mm socket and fix the damn thing.

        My two Neons have 196k and 187k on 'em, all from 13 and 14 years of nothing but hard driving. Unless you tossed a rod (which is incredibly rare on the little 2.0 motors) it was probably something simple to fix.

        I probably bought your used Neon for $200, swapped in a new head gasket, and re-sold it for $1000...
        • 6 Years Ago
        phoenix - I'm not a car guy, I'm a computer guy. I can fix your computer with my eyes closed, but I can't fix a car. That said, I do take it for regular maintenance. Possibly it broke down due to a lousy mechanic as I took it in to change the plugs at 60k service messed it up, I don't know.

        jpm100 - bought the car new, maintained it every 3k miles. However I found I had to do more maintenance than usual - things like lights, brakes broke down faster. Also had to do constant wheel alignment. And I had to fix at least 6 flats. Who the hell does that on a brand new Neon? No other car treated me this badly since. Furthermore, I'm not an aggressive driver. I really wanted to love the Neon, but it dissapointed me time after time. Granted the Acura is a more expensive car, but I haven't had to do anything but oil changes for the first 36k miles.
        • 6 Years Ago
        You would develop a phobia too if your car just dies in the left lane of the highway doing 70mph and there's traffic zooming by at the same speed. I bought the Neon because I liked it, but after 60k miles, it's a piece of junk.
        • 6 Years Ago
        My dad's old neon lasted for several hundred thousand miles and would have lasted a bit longer if my brother didn't crash it into a tree.

        Your phobia is ridiculous.
      • 6 Years Ago
      Love the Caption
      • 6 Years Ago
      We just got back from Palm Springs and LA. We got "stuck" with a Caliber.

      Wait.... wha', uh.. we loved it. DAMMIT... why?

      1. Seats.. awesome
      2. Storage.. awesome
      3. Driving dymanics... MUCH better than we expected
      4. Room for 4.. yeah.. and 2+ hour drives were very comfy
      5. Mileage.. awesome
      6. Visibility out.. awesome
      7. Stereo and MP3 connection.. awesome sound

      So... it's not pretty.. and they aren't going to make it pretty. What a shame. I would honestly consider buying one.

        • 6 Years Ago
        8. Potent L.A. weed that makes you think your POS rental is a Porsche Cayenne ... awesome!
      • 6 Years Ago
      'Ray, quit your whining. I supposed the government was supposed just keep writing them checks forever.

      For you people who whine about the government giving these deadbeats ultimatums, I guess you were okay with the kind of hands-off style government we had during hurricane Katrina'

      Well Mr. Oak seems you can't differentiate between the two. So I'll help.

      Where have I said they should have given them a dime? I haven't. So you need to get your facts straight before you dispute what I've said. I don't think they deserved a dime from the beginning.

      Where have I said anything about Katrina? One was inept decision making and giving those people a check of money created from thin air, and the other was an inept government, both local and federal, not responding to a crisis that was no ones fault. Are you serious when you say things like that? It has no basis in logic. One was a natural disaster and one was a disaster from some very stupid errors. The exception being that no one in Katrina's aftermath got a couple billion dollars.
      Not to mention that the government was going around taking legal weapons from private citizens that could use them against the looters and thieves running around, for 'safety'. Who's safety? Certainly not those stuck in New Orleans at the time.

      And that's a prime example of why you can't trust a government to help you. You can take your 'quit whining' crap somewhere else. Just because you could care less how much damage the Federal Government does to your way of life, your money, and your country doesn't mean I'm whining when I do. You should thank me and others for speaking out on government waste and corruption in this country. I can't believe you call what I've said whining. It's calling the government out for their ineptness, corruption, and general wrongdoings. Frankly, I'll keep going on till people like you wake up.
      • 6 Years Ago
      Awww the Caliber which have given us so much joy in trashing it's futility.
      • 6 Years Ago
      Not sure why this is news - this was the plan from the beginning.
        • 6 Years Ago
        Agreed. I thought this was understood. Who has the final say in what gets posted on AB? Can't believe that there is at least two people at AB that thought this was newsworthy.
      • 6 Years Ago
      I personally Love my Biggie Smalls (2007 Dodge Caliber)
      so, I would say good.

      hahaha

      thank you, no critism please
        • 6 Years Ago
        I didn't buy the caliber to go 0-60 in 5 seconds, I bought it because, it has room for me to haul all my stuff, its a pretty practical car, although the CVT isn't the best transmission in the world. I like the fact that I don't fell any shifting. The interior is hard as a rock. But it looks pretty durable and it has been so far.

        so lets see,
        + I average 27mpgs, (2L CVT)
        + I have Cargo room.
        + No gear switch feeling.
        + Practical simple interior.


        so TO ME, it almost is the perfect car. You might not agree but than Again you don't really need to
        • 6 Years Ago
        I now have a Jeep Compass (a purchase that the wife made) and I HATE it. It is quite possibly the worst vehicle I have ever had the displeasure of piloting.
        • 6 Years Ago
        @sw

        My sympathies to you too. Compass is a blight on the Jeep name. It even announces your bad purchasing decision to the entire world with that 'C O M P A S S' written on it's rear bumper in big letters.

        Just an honest question to you both. Did you guys buy the Caliber & COmpass because you guys were Masochists?
        • 6 Years Ago
        Sadly no, she bought it because she and her mother thought it was a cute 4X4. I had a Matrix at the time and I thought it was a pretty bad driving experience (I used to drive a Supra). But I didn't know what a horrible driving experience really was till the Jeep showed up. Now I'm just hoping I get a WRX or Ralliart in the next few years.
        • 6 Years Ago
        My sis has an R/T AWD...she is very happy with it. My friend has an SRT, and although it's not nearly as fast as the Neon Version, it's still a blast to drive. For the cost, it's a good vehicle, although the interior needs A lot of attention, and it would be nice to have the 6 spd manual option with all the engines.
      • 6 Years Ago
      The math of both the Canadian and the US governments is just beyond my comprehension.

      Chrysler was worth just under $10B when Cerberus bought it. At that time it was quasi-functional company that was selling something.

      Now, Chrysler is stuck with the junk it calls "Chrysler vehicles" - things that no one seems to buy even at the insane discount offered, it burns through cash like a wildfire and the picture of its future looks no better that it is now. I must be worth less than the price Cerberus paid, right? No.

      Canada is supposed to give $3.3B for 5% stake in Chrysler and lenders should forgive $5.4B in exchange for 5% of the company. Let's do the math. 10% = $8.7B so full worth of Chrysler is close to $90B or 10 times more than when Cerberus bought it. Gee, I would never even think that from 2007 to now Chrysler did so well.
      • 6 Years Ago
      Seems as though the birds knew something was going on...from the looks of the passenger window.
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