Chrysler Entering Bankruptcy Protection

President Barack Obama is due to make a statement on the future of the US car maker. Obama has said that the company would become stronger after any move into bankruptcy protection.
Chrysler is entering bankruptcy protection after failing to get their debtors to write off their debts.

The move almost guarantees that the company will be given billions of state loans if they could restructure the business by midnight Wednesday.

Obama is set to speak at noon about the Chrysler situation, appearing with members of his auto task force.

According to sources for the Globe and Mail, the car maker will be gaining $15 billion from both the US and Canadian governments to help Chrysler survive through bankruptcy protection.

On Thursday morning it is expected that the signing of a strategic alliance with Fiat SpA imminent.

Fiat will take a 20-per-cent stake in Chrysler.

The company will be split into two companies with its key Canadian operation placed with the part of the company that will form the basis for the Fiat-Chrysler strategic alliance. Unwanted assets will be placed into another operation.

Yesterday Chrysler released a LLC Statement in Response to UAW Ratification of Contract.

We are thankful to the Chrysler UAW members for their support in ratifying this contract, especially during these challenging times. This was a necessary step as we move forward in revitalizing this great Company. Today’s vote enables us to continue our work to meet the conditions laid out by the U. S. Treasury Department. The entire Chrysler leadership team believes in and appreciates the men and women that make up our great workforce worldwide.”

The members of the United Auto Workers have ratified a settlement deal with Chrysler. The vote was 82 per cent of production workers and 80 per cent of skilled-trade workers in favor.

The agreement will take effect on May 4. This is the last piece of the plan that the company will take to the meeting with the U.S. government to meet with the Thursday restructuring deadline.

A similar agreement was reached this past weekend with Canadian Auto Workers.

The Canadian government is set to have a press conference about this issue at 2 p.m., according to Derek Mellon, media relations at Ottawa headquarters.

This is a developing story, check back for updates

Prime Minister Stephen Harper will make a joint announcement with Ontario Premier Dalton McGuinty today. They are expected to announce that Canada and Ontario will have a two per cent equity stake in restructured Chrysler.

Officials expect that Chrysler to be in bankruptcy for 60 days only. The plan with the federal government is allowing the company to keep 30,000 jobs at Chrysler and its suppliers.

Fiat has agreed to transfer billions in cutting-edge technology to help Chrysler. Also, the United Auto Workers has agreed to further concessions, such cuts to benefits.

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