Last night, at the press conference, Deb Price from the Detroit News asked Obama about the auto industry and the potential for a Chrysler bankruptcy. The president thought a deal could be struck to save Chrysler (from the emailed WH transcript):
Q Thank you, Mr. President. On the domestic auto industry, have you determined that bankruptcy is the only option to restructure Chrysler? And do you believe that the deep cuts and plant closings that were outlined this week by General Motors are sufficient?Well, the details didn't get finalized. This morning, the Obama administration announced that Chrysler will file for bankruptcy:
THE PRESIDENT: Let me speak to Chrysler first because the clock is ticking on Chrysler coming up with a plan. I am actually very hopeful, more hopeful than I was 30 days ago, that we can see a resolution that maintains a viable Chrysler auto company out there. What we've seen is the unions have made enormous sacrifices, on top of sacrifices that they had previously made. You've now seen the major debt holders come up with a set of potential concessions that they can live with. All that promises the possibility that you can get a Fiat-Chrysler merger and that you have an ongoing concern.
The details have not yet been finalized so I don't want to jump the gun, but I'm feeling more optimistic than I was about the possibilities of that getting done.
The Obama administration will will announce at noon today that it will take Chrysler LLC into a historic bankruptcy to force a cut in debt key to a partnership with Fiat S.p.A. after three firms refused a sweetened offer.
With the UAW late Wednesday ratifying cost cuts in its contract and cuts in the money due its retiree health-care trust fund, President Barack Obama will announce a Chrysler-Fiat deal and the government’s “surgical” bankruptcy plan later today.
The administration "was willing to give the holdout creditors a final opportunity to do the right thing," an administration official said. But "the agreement of all other key stakeholders ensured that no hedge fund could have a veto over Chrysler's future success."
The lack of an agreement will not "impede the new opportunity Chrysler now has to restructure and emerge stronger going forward," the official said.
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