Chrysler to close 5 more plants; will file to sell most assets to Fiat

NEW YORK -- Attorneys for Chrysler aid the company will file a motion by Saturday to sell substantially all of its assets to Italian automaker Fiat Group SpA, but that won't include eight plants, including five that the automaker revealed it will shutter by the end of next year.

While Chrysler faced its first hearing Friday in Manhattan bankruptcy court, court documents showed the ailing automaker plans to close plants in Michigan, Missouri, Ohio and Wisconsin that employ about 4,800 people. Chrysler said they will be offered jobs at other plants.

The company also announced President and Vice Chairman Tom LaSorda is retiring effective immediately.

Judge Arthur Gonzalez approved a series of motions at Friday's swift hearing, launching a chain of events designed to ensure Chrysler's bankruptcy process is the quick and "surgical" one the company and the U.S. government have promised.

But what could prove to be the case's biggest challenge still lies ahead. Chrysler must eventually deal with creditors who refused to come to a deal that would have erased much of the automaker's debt and might have avoided a bankruptcy filing in the first place.

Another hearing was scheduled for Monday morning, where Chrysler attorneys will ask Gonzalez to let the company start using $4.5 billion in loans from the U.S. and Canadian governments to keep operating under bankruptcy protection.

Chrysler attorney Corinne Ball, of the firm Jones Day, said the loans and the sale to Fiat represent "an important lifeline" for Chrysler's dealers, supplies and customers.

"We have to move at a good speed throughout this proceeding," she told Gonzalez.

Gonzalez wasted no time, opening the meeting with just five words: "Please be seated. Debtor's counsel?"

Later, Gonzalez twice cut off an attorney representing Chrysler's dealers, then said, "I think you've gotten your point across."

By the end of the hearing, the judge had decided six motions in about an hour.

Chrysler, the nation's third-largest car manufacturer, filed for bankruptcy protection Thursday after a group of creditors defied government pressure to wipe out the automaker's debt. The company plans to emerge in as little as 30 days as a leaner, more nimble company, with Fiat potentially becoming the majority owner.