Chrysler succumbs to bankruptcy

(04/30/09) DETROIT (AP) - After months of living on government loans,Chrysler finally succumbed to bankruptcy Thursday, pinning itsfuture on a top-to-bottom reorganization and plans to build cleanercars

News 12 Staff

May 2, 2009, 4:04 AM

Updated 5,562 days ago

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(04/30/09) DETROIT (AP) - After months of living on government loans,Chrysler finally succumbed to bankruptcy Thursday, pinning itsfuture on a top-to-bottom reorganization and plans to build cleanercars through an alliance with Italian automaker Fiat.
The nation's third-largest car manufacturer filed for Chapter 11bankruptcy protection in New York after a group of creditors defiedgovernment pressure to wipe out Chrysler's debt. The company plansto emerge in as little as 30 days as a leaner, more nimble company,with Fiat potentially becoming the majority owner in the future. Inreturn, the federal government agreed to give Chrysler up to $8billion in additional aid and to back its warranties.
"It's a partnership that will give Chrysler a chance not onlyto survive, but to thrive in a global auto industry," PresidentBarack Obama said from the White House.
Chrysler said it will close all its plants starting Monday andthey will stay closed until the company comes out of bankruptcy. Atleast three Detroit-area factories sent workers home Thursday aftersuppliers stopped shipping parts over fears they would not be paid.
CEO Robert Nardelli announced he would step down when thebankruptcy is complete and take a post as an adviser with CerberusCapital Management LP, which will give up its 80 percent ownershipof Chrysler under the automaker's plan. Vice Chairman Tom LaSorda,who once ran the company when it was owned by the German automakerDaimler, said he would retire.


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