Earlier today Chrysler decided to filed for Chapter 11 bankruptcy. This wasn’t the government’s desired or planned move when they originally bailed out the auto company, but the move isn’t exactly a surprise after recent events.
Earlier today President Obama told reporters, “The necessary steps have been taken to give one of America’s most storied automakers, Chrysler, a new lease on life. … “This is not a sign of weakness.”
Meanwhile, and Obama Administration official told reporters, “Their failure to act in either their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat and its stakeholders, nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward.”
Chrysler will be eligible for up to $8 billion in federal aid. The bankruptcy will only last 60 days, which will allow Chrysler finalize a merger Fiat, an Italian auto company. Chrysler CEO Robert Nardelli also said that he will resign after Chrysler emerges from bankruptcy.
I believe that part of that federal aid is guarantees of Chrysler’s warranties, so that people aren’t worried about buying cars from Chrysler and then not having a warranty.
Personally, I think this is a good move. I think this should’ve been done in the first place. I don’t really agree with the billions of dollars in federal aid, but at least we won’t be continuing to just bail them out time after time.
I hope Chrysler recovers, but if not, that’s life. Companies succeed and companies fail. If Chrysler fails, I think GM and Ford will rebound. And other auto companies would pick up some of Chrysler’s divisions like Dodge. If Chrysler goes completely under, there’s no auto company out there who would have enough cars to sell to make up for it, in my opinion, and I think a company like Fiat, Ford, Toyota, etc. could benefit from picking up a division of Chrysler or some of Chrysler’s models. And that would ensure that not all of the jobs that Chrysler is providing now would be lost.
I wish everybody at Chrysler the best, and I hope they emerge out of bankruptcy soon.