The Chrysler Company filed for bankruptcy

April 30, 2009 2:12:54 PM PDT
The Chrysler Company filed for bankruptcy - after it could not come to terms with its creditors

President Obama announced Tuesday, that it will emerge a re-vamped corporation allied with Fiat and it will be called "New Chrysler".

After late night negotiations with several smaller lenders broke down ABC News has learned Chrysler is filing for chapter 11 bankruptcy.

An administration aide said the bankruptcy is expected to be short - just a month or two. Thursday, President Obama had harsh words for the holdouts: "They were hoping everyone else would make sacrifices and they would have to make none, I don't stand with them."

A deal is in place with Italian automaker Fiat which will provide billions in necessary capital and the U.A.W. has approved costly concessions from their 2007 contract.

Don Mills, a Chrysler worker said, "I think we have to vote for it just to keep things rolling in the motor city here, keep Chrysler afloat."

But some lenders aren't as willing to make a deal.

Four banks holding 70 percent of Chrysler's debt had agreed to erase it in return for $2-billion dollars. 40 hedge funds hold the remaining 30 percent but are holding out for more.

Without 100 per cent buy in from lenders the automaker is forced to file for bankruptcy the deal with Fiat is set to go forward.

Chrysler will continue to operate and get access to billions more in government aid and workers will retain benefits and pensions.

Still the idea of bankruptcy has left many workers feeling bitter and betrayed.

Scott Kanas, Auto Worker said, "It looks like that's the price of doing business in America. You mess over the employees, the white collar guys, top twenty per cent; ten percent get all the money."

General Motors recently announced their own aggressive restructuring plan that would make the federal government the majority shareholder. Their deadline for approval is June 1st.

Diana Alvear, ABC News, Chicago.

      MORE NATIONAL NEWS | TWEET@ABC30 | FREE ABC30 WIDGET
-----------------------------------------------------------------------------------------------
Sign up for Breaking News Alerts
Breaking News E-Mail Alerts | Text Message Alerts
-----------------------------------------------------------------------------------------------
More News on abc30.com
Local | California/State | Weather | Entertainment | Business | Politics | Sports | Health Watch | Consumer Watch | Mr. Food |
-----------------------------------------------------------------------------------------------


Load Comments