Tech & Biz

US Prepares for Chrysler, GM Bankruptcy

by Jordan Yerman | April 23, 2009 at 12:29 pm

137 views | 28 Recommendations | 2 comments

As Chrysler has only a week to finalize a deal with Fiat, renegotiate with United Auto Workers, and get some leeway from its lenders before the April 30 deadline, and General Motors has only a month to get back on track, the US and Canadian governments are already getting the paperwork together to place the failing automakers into bankruptcy protection.

While the automakers are under Chapter 11, Ottawa and Washington would be guaranteeing worker pensions and retiree benefits. We're talking up to $40 billion.

Italy's Fiat would finalize its alliance with Chrysler while the U.S. automaker is under bankruptcy protection, the paper reported.

The Globe reported the companies had initially asked for $125-billion, but that number has been whittled down over weeks of negotiations.

If the deal actually happens, it would be the biggest debtor in possession-financing ever, with the taxpayer picking up the tab.

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Tomitheos

at 12:39 on April 23rd, 2009

thanks for this update Jordan

albertacowpoke

at 16:44 on April 23rd, 2009

Thanks for this post Jordan. After all these bailouts, we are were we thought we wouldn.t be. This is sad news for the North American Auto Industry and time will tell where it will be after Chapter 11 reorganization. Is the pension protection only while under Chapter 11 bankruptcy? Does that mean worker may have diminished benefits/pensions when the companies emerge from bankruptcy?

aelusive

at 11:41 on April 24th, 2009

What scares me is that rather than lower taxes and help create jobs, the feds are raising taxes for spending programs we cant even afford. They are running the US the way teh car companies was run.

Entitlements, free stuff even to lazy workers.................bankruptcy.