Early this morning, Bloomberg News’ reported that sources privy to inside information revealed that both Chrysler LLC and General Motors Corporation are considering filing for bankruptcy at the behest of the federal government. According to the report, accepting a pre-arranged bankruptcy settlement would allow both GM and Chrysler to renegotiate their debts without liquidating all of their assets. Neither Chrysler nor GM would offer any official comment on the matter, but their mounting financial misery coupled with Congress’ continued reluctance to approve the disbursement of a bailout package certainly suggests Chapter 11 might be in both automakers’ immediate future.
Although Speaker of the House, Nancy Pelosi issued a statement earlier claiming that Congress would not allow the Detroit 3 to go belly up, the continued stonewalling from Congress and the ever-increasing dollar amount Detroit is demanding to stay afloat are posing a significant threat to the bailout’s approval. Today, the Detroit 3 are scheduled to once again appear before the Senate and receive Washington’s official decision on the matter, but with Ford already announcing it’s more than prepared to go it alone and the other two-thirds of Detroit readying their white flags, it does not appear as though Uncle Sam is going to open his wallet as widely for Detroit as he did for Wall Street.
Source: Automotive News