Repayment of the $4.5 billion life-line in U.S. and Canadian loans that a federal bankruptcy court allowed yesterday is "highly unlikely," according to Ron Manzo, a top company adviser. To Chrysler's bankruptcy legal team, that is not the issue. Urging the court "to let this company live," automaker attorney Corinne Ball said "the survival of Chrysler's business is at stake in these proceedings, as is the fate of hundreds of suppliers and thousands of Chrysler dealers around the country."
In other related developments:
* Chrysler's salaried employees will be ordered to take a two-week unpaid furlough saving the company $21 million. Hourly workers are already on furlough.
* Incentive plans to dealers will be cut by 25 percent in May, and 50 percent in June.
* Chrysler is losing 30-40 dealerships per month. They now have fewer than 3,200.
* In papers filed last week, Chrysler expects the U.S. Treasury to forgive the $4 billion loan made in January.
* The company's biggest obstacle to making a speedy exit from bankruptcy court are the dissident creditors, holding $6.9 billion in first-lien debt.
[Source: The Detroit News]
