Chrysler fights for deal as way to emerge from Chapter 11
NEW YORK — Chrysler began a marathon bankruptcy court hearing Wednesday to persuade a judge to approve its plan to sell most of its assets to Italian automaker Fiat and save itself from liquidation.
The company was waiting to see whether Judge Arthur Gonzalez would approve the sale despite protests from a group of Indiana state pension and construction funds that hold less than 1 percent of Chrysler's secured debt. If Gonzalez OKs the sale, the automaker could emerge from bankruptcy within weeks.
After hearing about nine hours of testimony, the judge adjourned the hearing until Thursday and anticipated it could stretch through Friday.
Attorneys for Chrysler say unloading the assets to a group led by Italy's Fiat Group SpA is the company's only hope to avoid selling itself off piece-by-piece. They say a leaner Chrysler could shift more easily to smaller, more fuel-efficient cars.
But many Chrysler dealers, bondholders and former employees say they are being steamrolled by the bankruptcy proceedings. Fiat could back out if the deal doesn't close by June 15.
On the other hand, approval of the sale would put Chrysler on track for a quick exit from bankruptcy protection, defying skeptics who insisted such a filing would leave the automaker mired in court for many months.
Both Chrysler LLC and General Motors Corp., which now appears almost certain to file for bankruptcy protection, have been hobbled by the health and pension costs of tens of thousands of unionized retirees, in addition to slumping sales.
Bringing Chrysler and Fiat together would dramatically change the face of the country's third-largest automaker. The current plan calls for Fiat to bring a handful of its small cars to the U.S. in the coming years, filling one of Chrysler's biggest product gaps and pleasing a White House intent on making the nation's fleet of automobiles greener.
Chrysler itself entered bankruptcy with a handful of new vehicles in the works. It plans to begin selling an electric car next year and have six electric vehicles on the road by 2014.