U.S. President Barack Obama announced that America’s third-largest automaker, Chrysler, will file for bankruptcy. The automaker will continue to operate and merge with Italian car maker Fiat.
“This is not a sign of weakness but one more step on a clearly chartered path to survival, Obama said during a press conference.
The news comes as Chrysler came close to a May 1 deadline to either file for bankruptcy or reach a deal with Italian automaker Fiat.
During the Chapter 11 filing the US automaker will receive up to $3.5 billion from the government in debtor financing as well as up to $4.7 billion when the alliance closes and restructuring is completed in 30 to 60 days.
The automaker will continue operating as usual during the process.
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