Chrysler negotiations go down to the wire
— -- U.S. automaker Chrysler Thursday either heads for bankruptcy court or delivers a plan to create a viable business outside bankruptcy court.
Negotiations to satisfy government mandates continued late Wednesday.
"It's still moving," Chrysler spokeswoman Shawn Morgan said.
The company, its bondholders and others involved have until 11:59 p.m. ET today to come up with a viability plan that suits the Treasury Department, which then would lend Chrysler more money to keep operating. Chrysler is surviving on a $4 billion government loan.
A person familiar with the negotiations, who did not want to be identified because the negotiations are not public, said, "Chrysler will survive and avoid liquidation. Whether that happens in or out of bankruptcy remains uncertain at this point."
In a press conference Wednesday night, President Obama said he is "very hopeful" that Chrysler will remain "a "going concern," and that if it has to go through Chapter 11 reorganization, it would be "quick."
Unresolved Wednesday night:
•Will Chrysler's remaining bondholders cut its debt? On Monday, Treasury offered $2 billion cash for all of Chrysler's $6.9 billion debt and got the major holders to accept. On Wednesday night, Treasury boosted that to $2.25 billion spread among all, hoping to sway holdouts, according to another source briefed on the negotiations, who declined to be identified because the talks aren't public.
•Would the United Auto Workers agree to sufficient concessions? UAW members continued voting into the evening Wednesday, but their leaders have said it is all but certain they would ratify. In return, workers would get a big stake — perhaps 55% — of the car company.
A key piece of Chrysler's survival plan is a partnership with Italian automaker Fiat. It has agreed to provide Chrysler with fuel-efficient small cars and the technology to build them in the U.S. in return for a 20% stake in Chrysler. That could grow to 35% under certain conditions.
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