The Bankruptcy of Chrysler Nearby; Fiat Also Visiting With General Motors

I was listening to a commentary on CBC this morning that talked about Chrysler declaring bankrutpcy. They were mentioning that the bankruptcy is almost certain.

What I thought was interesting was this: If Chyrsler declares bankruptcy, then it may shed some light for General Motors as to what they need to do. There are alot of questions right now as to what would happen if the big car company declared bankruptcy. There are really no answers. There is no way to talk about this topic as it's unprecedented.

Sometimes the only way to learn about something is to do it.

If General Motors is closing down plants for 9 weeks, to use up their current supply, that really says what the automobile sales climate is like.

I just purchased a brand new car (Hyundai Accent L), and it was manufactured back in November 2008.. This means that it had been on the lot for six months. At that point, you can see that with inventory stocked up like that the car companies are cash strapped, to say the least.

So.. is bankruptcy looming for Chrysler and General Motors? Probably. I think the public is getting used to the idea. And that will make it easier for the politicians to decide.

There is so much of a glut of cars right now... it just says that there is ample supply available. There isn't room enough for these big car makers.

MediaPostNewsThe United Auto Workers union would end up owning a substantial shareholding in Chrysler LLC Chapter 11 under a bankruptcy protection plan that the automaker is expected to present next week, Jeffrey McCracken and John D. Stoll and Stacy Meichtry report. The deal lets get rid of some liabilities, allowing Fiat to cherry pick the operations you want, if an agreement is forged sources.

For its part, Fiat has begun talks with General Motors about joining forces in Europe and Latin America, say the sources. The Italian company could close the purchase of a stake in GM Opel. But GM did not try to go forward until the plans are settled with Chrysler Fiat. Fiat has said it wants to have an initial 20% stake in Bankrupt Chrysler.

In either case, it would have a major impact on the automobile supply chain of car dealers, parts and others, as well as the worsening economies of the midwestern states.

However, both Fiat car company and the administration say that President Obama could prevent the bankruptcy of Chrysler if an agreement can be reached with the banks in question. "In a huge and complex negotiation like this, everything is speculation and up in the air until there is an agreement," said one administration official.