Chrysler to file for bankruptcy - Spokane, North Idaho News & Weather KHQ.com

Chrysler to file for bankruptcy

WASHINGTON. - Chrysler will file for Chapter 11 bankruptcy protection in New York on Thursday and will be eligible for up to $8 billion in federal aid to rebuild the ailing automaker, according to senior administration officials.

The officials say bankruptcy is necessary after talks with some of Chrysler's holdout creditors over the company's $6.9 billion in debt fell apart Wednesday night.

The officials requested anonymity because the details have yet been released.

The nation's third-largest automaker has already received $4 billion in government loans.

The officials say they expect the bankruptcy to last only 60 days, giving Chrysler time to finalize a partnership with Italian automaker Fiat.

Chrysler will continue to make cars and honor its warranties during that time.

Obama backs Chrysler bankruptcy as wise move

President Barack Obama says he supports Chrysler's decision to seek bankruptcy protection and that its looming partnership with Fiat will save one of America's "most storied automakers."

Obama 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.

During an appearance at the White House, Obama said that "the necessary steps have been taken" to give the company "a new lease on life."

Obama predicted that General Motors, as well as Chrysler, will "come back" and said he wants to see Chrysler recapture the place it had in society at a time when it was "a pillar of our industrial economy."

Chrysler's CEO says he'll leave after bankruptcy

Chrysler CEO Robert Nardelli says he will step down after the company emerges from bankruptcy protection.

Nardelli says on the CNBC cable network that the Treasury Department did not ask him to resign, but he felt it would be an appropriate time to leave after bankruptcy.

Chrysler has signed a partnership deal with Fiat. Nardelli says the new company will be run by a nine-person board, with six picked by the government and three by Fiat. The board will pick a new CEO.

Nardelli became Chrysler's CEO when Cerberus Capital Management bought the majority of the automaker in 2007.

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