Chrysler 'to file for bankruptcy'

US auto giant fails to finalise restructuring ahead of government deadline.

    Obama had given Chrysler 30 days to come
    up with a restructuring plan [EPA]

    Chrysler will continue to operate and still plans to sign the agreement with Fiat, officials said.

    The bankruptcy projection would give the firm time to rearrange its finances under court supervision and offer it protection from creditors.

    Government aid

    Obama's auto task force in March rejected Chrysler's restructuring proposals and gave it 30 days to come up with an alternative, including the link with Fiat.

    Chrysler is one of the so-called Big Three auto firms in the US alongside General Motors (GM) and Ford.

    Both Chrysler and GM had asked for a combined $21.6bn in financial aid from the US government on top of the $17.4bn in emergency loans approved in December.

    GM still has another 30 days to develop further restructuring plans while Ford has said it has enough money to survive the economic downturn without government aid.

    GM has already announced earlier this month that it was to slash a further 21,000 jobs and close plants and dealerships, while Rick Wagoner, its chief executive, was ousted by the Obama administration in March. 

    All three auto firms have faced criticism for failing to restructure their firms adequately as the US slid into recession and for not responding to consumer demand for more fuel efficient vehicles.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Visualising every Saudi coalition air raid on Yemen

    Visualising every Saudi coalition air raid on Yemen

    Since March 2015, Saudi Arabia and a coalition of Arab states have launched more than 19,278 air raids across Yemen.

    Lost childhoods: Nigeria's fear of 'witchcraft' ruins young lives

    Lost childhoods: Nigeria's fear of 'witchcraft' ruins young lives

    Many Pentecostal churches in the Niger Delta offer to deliver people from witchcraft and possession - albeit for a fee.

    Why did Bush go to war in Iraq?

    Why did Bush go to war in Iraq?

    No, it wasn't because of WMDs, democracy or Iraqi oil. The real reason is much more sinister than that.