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April 30, 2009

What to expect if Chrysler files for bankruptcy

Posted: 07:36 AM ET

Business Producer Gayatri Dhavan

Facing a Thursday deadline, Chrysler LLC appears on the verge of bankruptcy. CNNMoney has the rundown on why this automaker may not get all the help it needs.

Fiat may not be able to offer Chrysler all the help it needs.
Fiat may not be able to offer Chrysler all the help it needs.

If Chrysler files for bankruptcy, here’s what to expect.

If you own a Chrysler car:
- Warranties will still be okay
- The government has already stood behind the warranties.

For auto workers:
- The deal that workers agreed to yesterday will still be the nearly the same deal that workers will get in a bankruptcy.

For auto suppliers:
- There's no guarantee that all these suppliers will still be able to keep up Chrysler’s partnership in bankruptcy.

Meanwhile, there are still huge questions about whether Fiat can actually even help Chrysler.

Some experts saying: Fiat may not be successful enough to take on a problem of this magnitude.

More on Fiat:
- Fiat returned to profitability in 2005 after introducing new models and sharing more components among cars and through cooperative projects with competitors.

- Italian cars historically have a reputation for brilliant design but also quality lapses.

- J.D. Power data from Britain suggests Fiat has some way still to go.

- The firm's customer-satisfaction survey, which samples opinion after two years of ownership, has ranked Fiat at or near the bottom for the last four years.

Have a question? Leave it in the comments field below.

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Mike S (Port Leyden, NY)   April 30th, 2009 8:51 am ET

Well, hopefully Chrysler can teach Fiat how to get good quality, not Fiat teaching Chrysler how to have terrible quality.

If this deal goes through, I'm gonna wait a good 5 years to see where the quality has gone before buying another Chrysler product.

Ron Morgan   April 30th, 2009 12:40 pm ET

If a company can't manage it's business successfully then it should be allowed to go into bankruptcy the same way you and I would if we didn't manage our households successfully!

Dennis Spitzer   April 30th, 2009 1:17 pm ET

With the current problems that Chrysler Corporation is having why don't you consult with Lee Iacoca. It seems that he knew what to do over twenty years ago.

world traveler   April 30th, 2009 6:05 pm ET

Let them fall apart; it will leave a void for more innovative car companies to take over. As in nature, one species may die, but another will thrive in its place.

ronvan   May 4th, 2009 9:40 am ET

It's really a shame that it has come to this, however, I really do not feel sorry for Chrysler. Poor management, leadership, no vision or insight to build better and more fuel efficient vehicles has put them on this path.

Mike   May 5th, 2009 8:41 am ET

Chrysler is an American company and for what it is worth it's a shame. Wasn't it in the 80's that Lee saved the company from bankruptcy? Chrysler has been there before and unfortunately if they can't as a solid unit make a good American car without bleeding red money then they need to go. Sorry.

corie   May 12th, 2009 12:10 am ET

Why would a company that makes too many cars continue to make too many cars. You flood the market and it has a way of coming back on you. As for the company in general, I think they have the best designed cars on the market. They are leading the way in bringing the old style into the future.

Mark   May 13th, 2009 6:35 am ET

Let Chrysler and other auto makers go bankrupt as it is the only way to eliminate highly paid executives and unions. Restart the companies under a new name with new executvies faces (lower salaries) and NO unions like Toyota and other Japanese companies. The governemnt should support this move and not let the unions take over in this situation. Else we will be back in the same place again.

Wayne   May 13th, 2009 12:50 pm ET

Chrsler is using chapter 11 of the Bankruptcy Code to help with their reorganization, A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time.

jstewart   May 15th, 2009 6:38 am ET

Ifeel for the families of those that are about to loose their jobs because of the looming banktruptcy but on the other hand these dealerships are middle men they have been ripping off customers for years.from the sales team to the finance managers they have been trained to lie steal and even forge paperwork. This is the norm at these dealerships.it is about time they felt the pain of consumers who go into these hell holes only to be swindled investigated and held up for 6 or even 8 hrs just to purchase a vehicle. I am glad the shoe is on the other foot.now those same jobless dealership workers can go sit @ other dealerships for 8 hrs only to be turned down for a loan.thanks

Jimmy   May 15th, 2009 9:05 am ET

let see who really get hurts, like always the people busting there buts to make the company what it is while the overpaid ceo and managers keep there jobs.

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