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It's not often your company both files for bankruptcy and gets new owners in a single day, but that's just what happened to Chrysler today. We've had some time to digest all the details after President Obama's press conference at noon, and here's what we know...
- Blame it on the creditors - President Obama cited Chrysler's creditors' refusal to accept a debt-for-equity swap as the main reason filing for Chapter 11 was the only option left.
- Chrysler divided - 55% will be owned by the Voluntary Employee Beneficiary Association (VEBA), 10% shared proportionally between U.S. and Canadian governments, 20% owned by Fiat.
- Fiat's got goals - Remaining 15% of company will be distributed to Fiat in three 5% increments for meeting the following goals: creating U.S.-built 40-mpg vehicle platform, providing a U.S.-built fuel-efficient engine family and giving Chrysler access to global distribution network.
- Nardelli nixed - Current Chrysler CEO Robert Nardelli will leave after the alliance with Fiat is completed and the company emerges from bankruptcy, though he has stated that he was not asked to leave.
- GMAC gets the job - Chrysler Financial has been replaced by GMAC as Chrysler's preferred lender for wholesale and retail transactions.
- In-and-Out - Chrysler and the U.S. Auto Task Force estimate the company will emerge from bankruptcy in 30 to 60 days.
- Dealerships to be cut -- No surprise, but Chrysler's dealer network will be cut down as part of the restructuring. No hard numbers are available yet, but expect details to follow in the next 24 hours.
- Business as usual - Chrysler will largely run as normal in the interim, being funded by government-backed debtor-in-possession financing; warranties will be honored, suppliers paid and dealers supplied with inventory, but no new vehicles will be built until bankruptcy terms are finalized.
[Image: Bill Pugliano/Getty]
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Breakdown of Chrysler's Big Day [w/POLL] originally appeared on Autoblog on Thu, 30 Apr 2009 14:00:00 EST. Please see our terms for use of feeds.
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