Category Archives: Chrysler

Chrysler to close 1 in 4 dealerships


42 of the dealerships are in Michigan. As if they haven’t been hit hard enough, more to come for the citizens of MI. 789 total dealerships will be shuttered throughout the United States according to various news outlets.

This is where the Bankruptcy judge comes in. He will be the one to cancel the contracts between the dealerships and Chrysler. Even if you are someone that hates the bailout, surely you must have compassion for the folks that have done nothing wrong yet will bear the brunt of this carnage.

The court document outlining which dealerships are getting the axe can be read or downloaded here (pdf) courtesy of the Detroit Free Press.

These dealers will have until May 26th to file an objection..but seriously..does anyone think they have a snowball’s chance in hell of saving their businesses?

Chrysler preparing bankruptcy filing.

From MSNBC via the NYT:

The Treasury Department is preparing a Chapter 11 bankruptcy filing for struggling U.S. automaker Chrysler that could come as soon as next week, according to a New York Times report.

People with direct knowledge of the action told the newspaper that the U.S. Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing.

Wonder when GM will do the same? From the NYT writeup linked above:

Moreover, Fiat of Italy would complete its alliance with Chrysler while the company is under bankruptcy protection.

The only major question that remains unresolved is what happens to Chrysler’s lenders, who hold $6.9 billion in company debt. The government’s most recent offer, presented Wednesday, would give the company’s lenders about 22 cents on the dollar, or $1.5 billion, and a 5 percent equity stake in a reorganized Chrysler. Earlier this week, a steering committee of the lenders proposed that they receive 65 cents on the dollar, or $4.5 billion, and a 40 percent equity stake.

Officials at Chrysler and the Treasury were not immediately available for comment.

sigh