A Fiat deal over Chrysler bankruptcy
TEXT OF STORY
Bill Radke: Chrysler might file for bankruptcy as early as next week. Thursday is the deadline for Chrysler to come up with a new business plan, including an alliance with Italy’s Fiat. But The Wall Street Journal reports this morning a Chapter 11 filing could come before any kind of deal is reached. Ashley Milne-Tyte reports.
Ashley Milne-Tyte: Chrysler has reportedly told its creditors the company will need to file for bankruptcy, whether or not it can win concessions from them and the United Autoworkers.
John Wolkoniwicz is an automotive analyst with IHS Global Insight. He says this move is probably driven by Fiat boss Sergio Marchione, who may believe he can tap a more streamlined Chrysler through bankruptcy.
John Wolkoniwicz: You take the good parts of Chrysler and put them in a new company which theoretically emerges quickly from bankruptcy, and you leave the bad parts of Chrysler, the parts that Fiat doesn’t want, in a bankruptcy to go through normal channels.
Reports say the union has come to an agreement with the government over pensions and retiree health benefits in the event of a filing.
Wolconowicz says the sticking point is Chrysler’s creditors. He says they have their shareholders to think of. And the creditors and the government are still far apart on what constitutes an acceptable re-payment of debt.
I’m Ashley Milne-Tyte for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
