New chance for Chrysler

Yesterday's news that one of the big three American car making giants is being forced into federal bankruptcy doesn't appear to have generated the dark headlines that might have been expected.

Chrysler was effectively pushed into the move by President Obama whose administration believes that it can now be forced into an industry saving alliance with the Fiat motor company.

Chrysler became the first major American automaker to seek bankruptcy protection since Studebaker did so in 1933.

According to Obama the move will protect 35,000 at what he described as “a pillar of the industrial economy."

The company will now stop production for at least the next 30 days to reduce its inventories.

The risk will be that during this time,customers will go elsewhere and the company will struggle to get those customers to return

As the Washington Post says this morning

Moreover, there is no guarantee that a slimmed-down, Fiat-managed company would fare significantly better than Chrysler has in the past against foreign competition such as Toyota and Honda, which essentially dethroned the American automakers years ago.

The hope is that the company will come out of bankruptcy by the end of June.Next up is General Motors which has 30 days to present its plan to the government