There are multiple articles this morning reporting on Chrysler – more seem to be published ‘by the minute’. A London Times article titled ‘Chrysler set for bankruptcy as talks stall’ reports (as do most others) that Chrysler appears to be headed for Chapter 11 protection from creditors today after talks with lenders broke down last night. The article reports the US Treasury is now believed to be preparing for a brief “surgical” bankruptcy that would avoid liquidation and would pave the way for a deal with Fiat as early as next week. The article further reports President Obama is likely to make an announcement on Chrysler today.

Other articles note that GM has until June 1 to finalize an acceptable (to the U.S. Administration) restructuring plan and, I think importantly, that GM’s restructuring plans include canceling up to 40% of its U.S. dealerships within the next two years. I continue to believe (see earlier posts on this blog) that the U.S. Administration will not allow either Chrysler or GM ultimately to fail. The two companies employ too many people in the U.S., and their respective operations indirectly employ even more U.S. residents in the auto parts supply, component, and ancillary (advertising agencies, printing companies, etc., etc.) businesses for the U.S. Administration to walk away from all those jobs. That said, assuming I am right whatever restructuring occurs will result in more U.S. job losses. if I am wrong, look out ‘a long way below’.

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