Obama Unsure Chrysler Can be Saved

April 29, 2009
Questions whether lenders will cooperate

President Obama expressed doubt April 29 that a deal can be struck to avert bankruptcy for Chrysler, the faltering automaker facing a deadline this week for its viability plan.

"We don't know yet whether the deal is going to get done," Obama said at a town meeting in the heartland state of Missouri.

"One of the key questions now is, are the bondholders, the lenders, the money people, are they willing to make sacrifices as well?" Obama said, noting that workers have already "made enormous sacrifices."

"We don't know yet, and so there's still a series of negotiations that are taking place."

Chrysler clinched a deal with its main union April 26 that aims to meet the government's requirement for reducing its debt. It has also struck a deal with Germany's Daimler AG to renounce its 19.9 stake in the U.S. firm and pay $600 million in pension costs.

The struggling automaker is also expected to report April 30 on the success of alliance talks with Italy's Fiat, which Obama said has "done a good job transforming their industry."

"We're hoping that you can get a merger where the taxpayers will put in some money to sweeten the deal, but ultimately the goal is we get out of the business of building cars," Obama said.

"One of the potential advantages of a merger is new technologies where Chrysler starts making fuel efficient, clean energy cars that will meet the needs of future market."

Copyright Agence France-Presse, 2009

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