In his prepared remarks at noon, President Obama said the same thing that his senior advisors were telling reporters this morning: Today is a day to celebrate success. Chrysler has arranged a partnership with Fiat, allowing it go forward, restructure, and emerge a stronger, more viable company.

The unions are on board. The big creditors are on board. The big holdout was the hedge funds, who held about 30 percent of the company's secured debt and wanted more money.

Chrysler will try to deal with those creditors by filing for bankruptcy. The hope is that a judge will force them to take less money and that, within 30 or 60 days, a leaner version of the company--officials were calling it "New Chrysler" earlier today--will emerge, with the support of unions and major creditors along the lines of the agreements those groups have already reached.

During the bankruptcy period, the government will provide "debtor-in-possession" financing. The company will continue to operate. Suppliers will get their money.

What does this all mean? Smarter analysts than yours truly will be registering their opinions over the next few hours; I'll try to post a few of them. For now, though, here are my quick, tentative thoughts:

1) In theory, the partnership with Fiat--and importing of Fiat technology--should allow it to ramp up production of smaller, fuel efficient vehicles. At least some of those cars will, by agreement, be built here in the U.S.

One question is whether that theory will work so well in practice--whether Chrysler can simply import and then appropriate Fiat technology that quickly. The administration, to its credit, has done its homework on this--and other issues related to the auto industry. But some experts, I know, are dubious.

Another question is whether people will buy fuel-efficient cars. At the moment, they aren't, at least not in numbers that make the production of such cars profitable. As I've said before, the government must find ways to make the purchase of fuel efficient vehicles more attractive--preferably, through some sort of taxing of carbon emissions.

2) Chrysler is in for a lot more domestic downsizing, both in terms of jobs and dealers. This was inevitable, with or without bankruptcy.

And that means hard times in the states tied to the auto industry, chief among them my home state of Michigan. Ed Montgomery and a team of administration advisors are supposedly coming here next week, to work on helping the region adjust. And it's easy to imagine how, for example, they could use federal money for developing green technology--money that's already available--to help build a new economic base here.

But just because it's easy to imagine doesn't mean it's easy to do. 

3) Chrysler will get a new board. The government, as a large stakeholder in the company, will choose that board.

Officials said they have no intention of meddling in the company's day-to-day operations. But government officials are already shaping the company's future, by pushing the production of fuel efficient cars, among other things.

I don't have a problem with that. Other people, I'm sure, will. More on this to come.

4) The union's role in this is perhaps the most ingriguing. They're taking a huge hit, in terms of lost jobs and lost beneifts. And in lieu of financial contributions to the retiree health fund, they're getting stock in New Chrysler--which, at the moment, isn't worth a whole lot. But that also makes the UAW a big stakeholder in the new company. In fact, they should become the majority shareholder.

Worker ownership has a long, not particlarly successful history in American business. Will this time be different? 

5) As for those holdout creditors, Obama had a message for them. And he didn't mince words.

While many stakeholders made sacrifices and worked constructively, I have to tell you some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none. Some demanded twice the return that other lenders were getting.

I don't stand with them. I stand with Chrysler's employees and their families and communities. I stand with Chrysler's management, its dealers, and its suppliers.I stand with the millions of Americans who own and want to buy Chrysler cars. I don't stand with those who held out when everybody else is making sacrifices.

Of course, it's still possible that, at 11:59 tonight, the creditors will cave. The company has to file the papers now, but it's apparently not too late to arrange an out-of-court deal.

In the meantime, as the above quote suggests, the hedge funds may have done Obama a favor politically.

So far, opinion on the auto industry bailout has been divided into roughly two basic gropus. You have, on one hand, people who wanted the government to support the companies--in many cases, because they depended upon car companies for their livelihoods. And then you had people who opposed support, in many cases because they thought it was handing over government money to people who didn't deserve it. 

It's possible (though not certain) that the hedge fund posturing will let Obama redraw the political lines, so that it's the sacrificers--workers, big creditors, and taxpayers--on one side and the profiteers--the hedge funds--on the other.

--Jonathan Cohn 

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