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Chrysler Goes Bankrupt and GM Struggles to Keep Above Water
Chrysler LLC yesterday (Thursday) filed for bankruptcy protection after a failed attempt to reorganize operations and restructure debt before the government appointed deadline.
The collapse of one of America’s largest and oldest auto companies – having been founded in 1925 – shows just how much the U.S. auto industry has deteriorated since its heyday in the mid-20th century.
As many analysts speculated would be the case over the past several months, Chrysler is filing for Chapter 11 bankruptcy protection and attempting to reorganize, making it the first major automaker to do so since Studebaker did in 1933.
Should Chrysler fail to successfully reorganize,…
1May2009 | Money Morning | 0 comments | ContinuedGM and Chrysler Make Dramatic Cuts to Avoid Bankruptcy
Faced with pending deadlines to restructure or resort to bankruptcy, General Motors Corp. (GM) and Chrysler LLC each made a series of dramatic moves to trim fat, reduce debt and improve efficiency.
GM’s cost-cutting measures are perhaps its most encompassing since the company began its turnaround process. Among GM’s announced restructuring plans:
- GM asked bondholders to exchange $27.2 billion of bonds for 10% of the equity of the restructured company. Bondholders would receive 225 shares of GM common stock for each $1,000 equivalent of principal amount.
- The top U.S. carmaker will close 17 assembly, power train and stamping plants by the…
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