The United Auto Workers, Fiat, and the big creditors had signed off on a deal. But the smaller creditors didn't and, it seems, that unravelled the whole thing. So, today, Chrysler is filing for bankruptcy. Via the Wall Street Journal:
The administration's auto task force tried to get all 46 of Chrysler's secured lenders to agree to a debt-reduction deal until talks broke down late Wednesday. President Obama is expected to announce that Chrysler is now going to seek reorganization in bankruptcy court.
We'll know more in a little while, when President Obama speaks about the subject.
For now, keep in mind that the administration has said, from the beginning, that a quick, structured bankruptcy might be advisable even if the pieces for a deal were in place. If, indeed, the big parties are in agreement about what a restructuring should look like, such a turnaround might yet be possible. Again, from the Journal:
"Their failure to act in either their own economic interest or the national interest does not diminish the accomplishments" by Chrysler, its planned alliance partner Fiat SpA and other stakeholders in the company, the official said, "nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward." ...
"After a month of tireless negotiations, the administration went into yesterday afternoon with the full support of Chrysler's key stakeholders, including the UAW and the largest creditors," the administration official said. "That support remains."
Chrysler, in other words, may not be dead. Maybe not even mostly dead.
Stay tuned.
--Jonathan Cohn