Opinions: Chrysler Bankruptcy

The approaching announcement of the first Detroit Three giant to file for bankruptcy has already placed additional pressure on the international markets. Whereas the effects will be more visible tomorrow, analysts have already began to take a close look at the perspectives.

"If there's a filing by Chrysler today, it will create a great deal of uncertainty for the industry and suppliers. The administration is hoping for a very quick reorganization but everyone in the industry should be prepared for a lengthy process given the complexity of the industry," Bill Kohlder, Butzel Long chairman told Reuters.

The general feeling seems to be that a fast Chapter 11 restructuring for Chrysler will not be as easily achieved as the US hopes. With the prospects of GM, the other struggling automaker, going bankrupt next month, the industry looks worse than it ever did.

"It's almost a death wish that people want to execute. It's not easy to thread the eye of the needle, coming out on the other side of bankruptcy. Bankruptcy will damage the Chrysler brand and that is regrettable. The government has to think carefully about how long they can bleed Chrysler out. They need to bring some fresh blood there to lead this company," Brian Bethune, IHS Global Insight analyst told the source.

Bottom line? Perhaps such a purge is needed by the US economy. Bankruptcy is not the end of the world, even if it looks like it. And surely it will not be an easy route to take. Still, Andrew Kanaly, Kanaly Trust chairman thinks this is the right path: "Maybe this is a pattern that we are going to see for maybe Ford, GM, maybe Bank of America, maybe Citi - a whole lot of hand waving, a whole lot of talking, a whole lot of hand wringing, when the bottom line is - the failed institutions, let them go and let's get on down the road."
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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