Today the Obama administration will announce that Chrysler will enter into bankruptcy in order to force a debt reduction with their partner Fiat.
With the UAW late Wednesday ratifying cost cuts in its contract and cuts in the money due its retiree health-care trust fund, President Barack Obama will announce a Chrysler-Fiat deal and the government’s “surgical” bankruptcy plan later today. The administration “was willing to give the holdout creditors a final opportunity to do the right thing,” an administration official said. But “the agreement of all other key stakeholders ensured that no hedge fund could have a veto over Chrysler’s future success.”
In 1979 Jimmy Carter famously bailed out Chrysler in a deal that included the government buying thousands of Dodge trucks for military use.