WASHINGTON, April -- U.S. President Barack Obama said on Thursday that he supports the nation's third largest automaker Chrysler LLC to file for bankruptcy protection, saying he believes Chrysler will emerge quickly from bankruptcy as a stronger, more viable company.
Necessary steps have been taken to give Chrysler, one of America's most storied automakers, "a new lease on life," Obama said in brief remarks at the White House.
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The president said he believes the bankruptcy filing will put the struggling company back on its feet and that the process for recovery will be relatively fast.
Obama also announced a merger between Chrysler and Italy automaker Fiat.
"Today, I am pleased to announce that Chrysler and Fiat have formed a partnership that has a strong chance of success," Obama said. The deal will help Chrysler emerge from a swift and "controlled" bankruptcy as a stronger company, he added.
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To help quickly restructure Chrysler, the government will provide aid of up to another 6 billion dollars to the struggling U.S. auto giant, according to news reports. Chrysler has been living off 4 billion dollars in government funds since the start of the year.
Chrysler has to file for bankruptcy protection after talks broke down with a small group of the automaker's creditors, who rejected a final opportunity to restructure Chrysler outside of bankruptcy in negotiations with the U.S. Treasury Department.
Obama blasted the group of investment firms and hedge funds, who he said were holding out for the prospect of an unjustified taxpayer bailout.
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"I don't stand with them," he said.
Chrysler has been hard hit by the economic downturn and the worst decline in auto sales in decades. It got 4 billion dollars in emergency loans from the government in December last year on the condition that it would develop a plan to restructure.
It nears a deadline of 11:59 p.m. Thursday to have deals in place with labor, creditors and Italian automaker Fiat.
Two of the government's requirements are in place. Fiat is expected to sign on as a Chrysler partner sometime Thursday. And the United Auto Workers (UAW) union ratified a cost-cutting deal on Wednesday night.
A bankruptcy filing doesn't mean Chrysler will shut down. Under the bankruptcy law that Chrysler would file under, a judge would decide how much creditors would get, but is likely to go with any settlement agreed to by the majority of the creditors.
"No one should be confused about what a bankruptcy process means," Obama said on Thursday. "This is not a sign of weakness but rather one more step on a clearly chartered path to Chrysler's revival."
1 comments:
The Fiat patent fraud. About the Fiat hybrids: the technology double clutch with electric motor between has been stolen by a patent that Fiat Company has never wanted to purchase, but only shamelessly to copy. This hybrid solution will be the basic technology with Chrysler's electric and hybrid car program. Please give a look in my blog where the "vitality" and boldness of the Fiat planners it appears in all of evidence: http://dualsymbioticelectromechanicalengine.blogspot.com/
If the industries can afford unpunished to copy the ideas and defending it need very expensive trial, to which target need the patents? How to defend the rights of private inventors? How our young people can find intellectual courage if the economic potentates crush the rights of the single ones? Whoever is about to ask for a patent or wants to propose a proper patent to a great firm I suggest to give a look to my experience with the Fiat, to get able to operate with better adroitness. Thanks and good time to everybody. Ulisse Di Bartolomei
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