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Bankruptcy Reorganization Chapter 11

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May 04, 2009

Impact of a Chrysler Liquidation (according to Chrysler)

According to documents filed by Chrysler, a liquidation would negatively impact the economy and stakeholders in the following ways:

 

 

·         38,500 hourly and salaried Chrysler workers in the

U.S.

will lose their jobs;

 

·         Chrysler’s workers and retirees and their surviving spouses will lose over $9.8 billion of health care and other benefits and $2 billion in annual pension payments;

 

·         All 23 of Chrysler’s manufacturing plants and facilities and 15 parts depots in the United States will shut down (as well as 18 additional plants and parts depots worldwide);

 

·         Approximately 3,200 Chrysler dealers will be put out of business and the over 140,000 employees of those dealerships will lose their jobs;

 

·         Over $5.7 billion in outstanding auto parts and service supplier invoices will not be paid to Chrysler’s suppliers and new business will be cancelled, forcing hundreds of suppliers out of business and the loss of hundreds of thousands of additional jobs;

 

·         Over 31 million Chrysler, Jeep and Dodge owners would lose significant value in their cars and trucks, particularly due to questions about the ongoing availability of warranties and replacement parts and services;

 

·         Local, state and federal governments will lose tens of billions of dollars in tax revenues, according to the research memorandum published by the Center for Automotive Research in November 2008;

 

·         Over $100 billion in annual sales will disappear from local economies; and

 

·         Chrysler’s first lien secured creditors will receive net present value recoveries of less than 38 cents on the dollar and possibly as little as 9 cents; the U.S. government, another secured creditor, will receive less than that; and Chrysler’s unsecured creditors will receive nothing.

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