Tale of two Chryslers: Bankruptcy could take two years, not two months
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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Reader Comments (Page 1 of 3)
Swede 3:35PM (5/13/2009)
Awww the Caliber which have given us so much joy in trashing it's futility.
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gforce 3:36PM (5/13/2009)
Not sure why this is news - this was the plan from the beginning.
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Mr.Oak 9:23PM (5/13/2009)
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.
Adamb 3:52PM (5/13/2009)
I personally Love my Biggie Smalls (2007 Dodge Caliber)
so, I would say good.
hahaha
thank you, no critism please
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Wobbly_ears 3:59PM (5/13/2009)
My sympathies.
sw 4:04PM (5/13/2009)
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.
Wobbly_ears 4:32PM (5/13/2009)
@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?
sw 5:20PM (5/13/2009)
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.
Adamb 5:26PM (5/13/2009)
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
mroverlord 8:52AM (5/14/2009)
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.
izorro 3:57PM (5/13/2009)
Love the Caption
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Ben 4:00PM (5/13/2009)
Ditto!
JohnV 3:59PM (5/13/2009)
Seems as though the birds knew something was going on...from the looks of the passenger window.
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Kellman 4:00PM (5/13/2009)
The bird crap all over the car in the pic is a nice touch.
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Miacol 4:21PM (5/13/2009)
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....
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d4rez 4:25PM (5/13/2009)
It's no good having a "surgical" bankruptcy if the patient dies on the operating table.
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DJ 4:25PM (5/13/2009)
Is Viper part of good Chrysler or bad(ass) Chrysler?
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SLVR6 5:07PM (5/13/2009)
Viper can not be produced much longer do to coming regulations so it will either die or be sold. It was supposed to have been sold last year, haven't heard much about it lately.
Ray 4:27PM (5/13/2009)
I'm so glad they burned through all that money for nothing! Anyone that thinks the government should be involved is a dumbass. Plain and simple. This crappy car company should have folded years ago, but both Bush and Obama think that printing money like it's going out of style and then wasting every single cent of it is a good idea. F*ck Chrysler and f*ck Obama, his administration and all the career politicians that support these ideas.
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JohnV 4:31PM (5/13/2009)
Ray - I tend to agree, the government should not be involved in private business. If its bad and should fail, let it fail.
But please remember, Obama is not a career politician...He organized communities for a little while ;-)