Monday, September 14, 2009
Did Chrysler Stay in Bankruptcy Long Enough to Address Problems?
Earlier this year, Chrysler filed for bankruptcy in order to reorganize and hopefully become a profitable company once again. At the time, the U.S. government pushed to move Chrysler through bankruptcy as quickly as possible in order to avoid a confrontation with the United Auto Workers union over pensions and other financial issues.
Unfortunately, Chrysler's rapid movement through Chapter 11 bankruptcy may have hurt them in the long run. Many bankruptcy experts have urged the company to take the necessary time to ensure that the company emerged in better condition than they entered. It appears that Chrysler did not remain in bankruptcy long enough to properly address all of the challenges facing them in the upcoming years.
Recently, Fiat purchased a controlling minority stake in Chrysler. The company plans to make several Fiat models available in the United States in order to boost the profits of the struggling Chrysler Corporation. Fiat also plans on phasing out several Chrysler, Dodge, and Jeep models that have not been profitable.
However, it is uncertain whether the help from Fiat will be able to resuscitate the floundering company. Their help may be too little, too late. Most likely, it will take at least two years for Chrysler to feel the impact of the changes brought by Fiat. Based on their current financial circumstances, it appears that Chrysler may not be able to wait that long.