Chery May "Help" Chrysler Go Bankrupt

Chrysler's race for survival may bite the dust due to an unexpected obstacle: Chery Automobile, the Chinese partner of the American company, may “convince” the United States Senate to reject the funding request. Charles Child of Automotive wrote that the Washington politicians may feel a bit offended by the fact that Chrysler invests millions in a Chinese company while shutting down US production plants and laying of millions of employees.

Obviously, this doesn't necessarily mean the lawmakers will reject the loan proposal in case Chrysler complies with all the other requirements, but it may cause more problems than initially expected.

The Chery – Chrysler agreement wasn't obviously supposed to cause so many problems, as the two companies were extremely confident that establishing such a partnership could help both of them launch new car models quicker and expand operations onto new markets.

"This is the start of a very long relationship between Chrysler and Chery. Chery’s participation in this agreement and their focus on small and sub-compact cars will have a nearly immediate effect on Chrysler Group's offerings in the small-vehicle segments. This strategic partnership is part of a new business model that is allowing us to introduce all-new products more quickly, with less capital spending,” Chrysler Group President and CEO Tom LaSorda said in July 2007 at the time of finalizing the cooperative agreement.

Chrysler is surely experiencing the toughest period in its history, with government money crucial for helping the American company reach the floating line. The United States Senate, however, blocked Detroit 3's loan request last week and advised companies involved in negotiations to reconsider the future plans to include more options that could revamp sales in the next years.