Updated: Chrysler to Enter Bankruptcy

Update #5 April-30-2009 02:49 PDT:
Chrysler will idle most of its manufacturing plants during its bankruptcy restructuring. The move is likely to put added stress on already struggling auto suppliers. Some of the suppliers could be forced to declare bankruptcy themselves in an outward-rippling BK chain-reaction.

Chrysler dealers are also going to struggle more - particularly small and marginal ones. A bankruptcy judge assigned to the case could terminate Chrysler's dealer contracts that had been protected by business franchise laws, forcing some to close their doors.

At the end of Chrysler's bankruptcy, there are likely to be far fewer Chrysler dealers.

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Update #4 April-30-2009 09:33 PDT:
Chrysler CEO Bob Nardelli will step aside after the bankruptcy proceedings have been completed.

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Update #3 April-30-2009 09:30 PDT:
President Obama just finished speaking about Chrysler. The company will file for bankruptcy to start a court-governed restructuring that's expected to take 30 to 60 days.

The federal government will continue to stand behind Chrysler's new vehicle warranties and will provide up to an additional $8 billion in aid until Chrysler can finalize its partnership with with Fiat. GMAC has agreed to finance new Chrysler vehicle sales.

A new Fiat/Chrysler managed company will emerge from the bankruptcy proceedings.

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Update #2 April-30-2009 07:35 PDT:
There are numerous reports that negotiations between Chrysler and its creditors broke down over night. Chrysler is moving forward filing for Chapter 11 bankruptcy protection to settle its financial obligations in court. The White House is expected to make the announcement today when President Obama speaks about the government's next steps aiding Chrysler and GM.

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Update #1 April-29-2009 15:02 PDT:
The Washington Post is reporting that Chrysler CEO Bob Nardelli will be replaced by Fiat executive management under the Chapter 11 bankruptcy plan.

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Bloomberg is reporting that President Barack Obama is expected to announce tomorrow that Chrysler will enter Chapter 11 bankruptcy before signing an alliance with Italian automaker Fiat. Under the deal, Chrysler's most valuable assets would be sold to a new "entity." Fiat is expected to take a 20 percent ownership stake in Chrysler, a union retiree health-care trust fund would own 55 percent, and the rest of the company would be owned by the U.S. government.

Still no word whether the Dodge Ram 1500 will be renamed the Ram Millecinquecento.

[Source: Bloomberg, The Washington Post]

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