Chrysler to file for bankruptcy and ally with Fiat

[TerryMason]

The Wall Street Journal is reporting that Chrysler and Fiat will complete an alliance today that will include the Detroit automaker filing for Chapter 11 bankruptcy as part of the restructuring plan.

While key labor agreements were ratified and Chrysler’s four major creditors had agreed to a reduction in Chrysler’s debt, negotiations with Chrysler’s other creditors, including several hedge funds, broke down late Wednesday, making a bankruptcy filing all but inevitable. Treasury officials believe that the bankruptcy proceedings could be completed in a matter of weeks.

As to the joining of Fiat and Chrysler, MSN Money reported:

The United Auto Workers union would own 55% of a restructured company, with Fiat getting 35% and creditors, including the U.S. government, getting 10%.
UAW leaders tentatively agreed to a deal on Monday, but it now will be sent to local unions for ratification.
In related news, Chrysler's former parent, Daimler (DAI, news, msgs) late Monday reached a deal to unload its remaining stake in Chrysler. Daimler will pay $200 million for three years to secure pension payments. The German automaker will also forgive the repayment of loans and dispose of its 19.9% Chrysler stake.

So what do you guys think? Since Jeep is the only profitable part of Chrysler, I'd assume that they are safe. Perhaps this could end up as a good thing for Jeep.

 

[TerryMason]

Looks like the President has already weighed in on it:

 

[TerryMason]

Just listened to the presidents statement, some things were pretty interesting:

"Every dime of taxpayer money must be repaid before Fiat can take a majority stake in Chrysler"

"The gov. of Canada will also invest resources"

"Fiat will transfer Billions of dollars of equipment to Chrysler so that they can build engines right here"

 

[Rubiconrich]

Jeep will be around but Hummer will go away before they can built the H4.
I'm not worried.