Chrysler Considered, Rejected Bankruptcy
Chrysler chief Bob Nardelli, testifying before the Senate Banking committee right now, said his company has considered trying to arrange a pre-packaged bankruptcy, a fresh admission from a member of Detroit's troubled Big Three.
Some lawmakers are advocating that GM, Ford and Chrysler enter pre-packaged Chapter 11 bankruptcy protection to reorganize their way out of trouble, favoring this over the $25 billion in loans sought by Detroit.
GM chief Rick Wagoner said bankruptcy is a bad idea because consumers won't buy vehicles from a bankrupt company.
But Nardelli said his worries are different. He said Chrysler considered bankruptcy but then ran the numbers. He said it would take too long to negotiate with suppliers, lenders and labor to reach an agreement on a bankruptcy filing that would be a lifeline to Chrysler.
"We are in a very fragile position," Nardelli said.
Asked how Chrysler would use its share of the $25 billion in loans, Nardelli said, "We would use it for operating cash flow," meaning Chrysler would use it to pay bills and stay afloat.
-- Frank Ahrens
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November 18, 2008; 7:00 PM ET
Categories: The Ticker | Tags: Chrysler, Detroit bailout
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