Obama announces Chrysler bankruptcy, deal with Fiat; Nardelli out soon *UPDATED
Filed under: Government/Legal, Chrysler, LLC., Earnings/Financials
President Obama has just concluded a televised press conference where he announced that Chrysler will indeed head into Chapter 11 bankruptcy proceedings almost immediately. As part of the same announcement, he noted that the Auburn Hills automaker has reached terms with Fiat and will be headed into a partnership agreement that will include a cash infusion and technology transfers. By some estimates, the restructuring is expected to take 30-to-60 days.
The announcement came after late-night talks with a small group of creditors broke off before a restructuring plan could be reached. During the conference, Obama took pains to note the sacrifice of many players, including some in the financial sector, but he openly chastized other hedge fund operators and speculators for holding out for more debt compensation, arguing that they were looking to make money on the taxpayer dollars.
Keeping an upbeat tone in his announcement, Obama also reassured Americans that they will be repaid in full before Fiat gets any stake in the automaker, and that GMAC has agreed to step in to provide loans for Chrysler vehicles. Canada is also pitching in to make it work, but the U.S. taxpayers will be on the hook for an additional $8 billion in aid. Obama also reiterated that the government will stand behind Chrysler and General Motors vehicle warranties, and he extolled Americans to purchase new vehicles from domestic automakers.
Finally, in related news, it is being reported that Chrysler CEO Bob Nardelli (whom Obama praised during the press conference) will exit the company after the bankruptcy filing is complete.
*UPDATE: A new Chrysler press release (posted after the jump) confirms that Nardelli will leave Chrysler after it emerges from bankruptcy:
The Detroit Bureau’s Ken Zino has excellent analysis of the announcement here.
More details and analysis on the way…
[Image: Bill Pugliano/Getty]
Continue reading Obama announces Chrysler bankruptcy, deal with Fiat; Nardelli out soon *UPDATED
Obama announces Chrysler bankruptcy, deal with Fiat; Nardelli out soon *UPDATED originally appeared on Autoblog on Thu, 30 Apr 2009 12:36:00 EST. Please see our terms for use of feeds.
