- The Washington Times - Monday, June 1, 2009

One of Detroit’s Big Three automakers is a step closer to foreign ownership, as a federal bankruptcy judge Monday approved the sale of most of the company’s assets to Italy’s Fiat.

The ruling by Judge Arthur Gonzalez, issued late Sunday, paves the way for Chrysler to emerge from bankruptcy and pushes forward a major component of President Obama plans to restructure the nation’s deeply troubled automotive sector.

“Only a month ago, this great American company’s very future was in doubt. Now, as a result of a substantial commitment by the U.S. government, and tough sacrifices from all stakeholders involved, Chrysler has a new lease on life,” said Mr. Obama in a statement issued Monday morning.

In a speech later in the morning, the president acknowledged the car company’s future solvency is “now in the hands of [Chrysler/Fiat] executives, managers and workers.”

“But what the completion of this alliance means is that tens of thousands of jobs that would have been lost if Chrysler had liquidated will now be saved,” he said.

Judge Gonzalez’s decision was issued at lightning speed in legal terms, as Chrysler had filed for bankruptcy only a month ago.

The judge said in his ruling that a speedy sale was needed to keep the value of Chrysler from deteriorating and would provide a better return for the company’s stakeholders than if the country’s third largest automaker had been forced to liquidate.

“Any material delay would result in substantial costs in several areas, including the amounts required to restart the operations, loss of skilled workers, loss of suppliers and dealers who could be forced to go out of business in the interim, and the erosion of consumer confidence,” he wrote.

The ruling was greeted with a collective sigh of relief by Chrysler officials and stockholders.

“With this approval, the new Chrysler Group is created and can prepare to launch as a vibrant new company formed with Fiat,” said Robert Nardelli, Chrysler’s outgoing chairman and chief executive.

Chrysler had argued it would be forced to sell off its assets piece by piece unless the sale to Fiat Fiat Group SpA was approved.

The ruling came ahead of fellow Detroit automaker General Motors Corp.’s government-backed bankruptcy protection filing. GM filed for Chapter 11 in New York’s Southern District early Monday.

Chrysler, which has produced such iconic American “muscle cars” as the Plymouth GTX and Road Runner, as the Dodge pick-up line, has pledged to reinvent itself as a leaner company more responsive to U.S. consumer tastes, including an increasing appetite for smaller, more fuel-efficient models.

Fiat, Italy’s largest automaker that produces a range of models — from small “microcars” to high-end sports cars such as Ferrari and Maserati — has the option of pulling out if the deal does not close by June 15.

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