Despite bankruptcy, Chrysler still has fans who say car company will survive
When it comes to car buying, a good deal’s a good deal – even if it’s offered by newly bankrupt auto giant Chrysler.
“It’s still a great, classic American car,” said Darnell Leacock, the proud new owner Thursday of a 2008 Chrysler 300. “The company’s going through an adjustment.”
The 27-year-old Cambria Heights resident was among the optimists at Star Chrysler Jeep & Dodge in Queens Village, where three cars were sold in one day despite the company’s latest financial mess.
“People who think Chrysler is going down are nuts,” said Michael Vega of Franklin Square, L.I.
While the carmaker didn’t get deep-sixed, it was bruised and bloodied after filing for bankruptcy protection.
The once-unthinkable move was followed by word that its embattled CEO was leaving and its plants would temporarily close Monday.
It took a deal with Italian automaker Fiat and another $8 billion in federal bailout money to save the Michigan-based firm from the corporate junkyard.
Despite the setbacks, the company launched in 1925 will continue car sales as usual – and emerge in two months “stronger and more competitive,” President Obama predicted.
“No one should be confused about what a bankruptcy process means,” Obama said. “This is not a sign of weakness, but rather one more step on a clearly charted path to Chrysler’s revival.”
The government will back Chrysler’s warranties in the bankruptcy period. The President promised consumers that buying or servicing the company’s cars won’t be affected.
Chrysler’s plants will shut down for up to two months until the restructuring of its $6.9 billion debt is complete. The company has received $4 billion in government money.
Once the bankruptcy ends, CEO Robert Nardelli will leave after two disastrous years where the company’s sales and earnings tanked. He was disappointed when a deal to avoid the court filing failed just hours before an 11:59 p.m. deadline.
“We came into the last pit stop, had the car tuned up, and ran out of laps,” Nardelli told reporters.
Obama blasted hedge-fund creditors for submarining a proposal that would have spared Chrysler from bankruptcy.
“I don’t stand with those who held out when everybody else is making sacrifices,” he said.
Four banks holding 70% of Chrysler’s debt signed off on a deal to accept $2 billion – about 30 cents on the dollar. The hedge fund creditors, seeking a better payoff, declined to go along.
Fiat will get 20% of Chrysler in return for giving the American business access to its fuel-efficient technology.
