DETROIT -- Today's announcement of Chrysler LLC's plan for a bankruptcy filing comes after five frantic months of negotiations, federal rescue loans and international maneuverings aimed at remaking the 84-year-old automaker through an alliance with Fiat S.p.A. of Italy.
President Barack Obama confirmed Chrysler's fate in a noon speech that came a month after his fledgling administration rejected the automaker's previous survival strategy and 12 hours before a midnight deadline for the automaker to put together a new plan, anchored by a Fiat deal.
Developments accelerated in the past week as Obama's auto task force wrenched additional concessions from factory workers in Canada and the United States and creditors representing the bulk of Chrysler's debt.
But holdouts among those creditors assured that the final form of the agreement will come in U.S. Bankruptcy Court -- a domain in which neither Chrysler nor the Obama administration will control the timing or the fine print.
Even if the reorganization proceedings are swift, as Obama has predicted, Chrysler will have to wait two years before Fiat is able to provide its new partner with fuel-efficient small vehicles, analysts say. As part of a deal with the UAW, Fiat agreed to make at least one small car in a U.S. Chrysler plant.
Although much of the heavy lifting seems to have been done in advance, bankruptcy lawyers warn that even streamlined bankruptcy filings take longer than expected.
"Once a bankruptcy is filed, it is out of the administration's hands and a bankruptcy judge has complete control," said Douglas Bernstein, a partner at Plunkett Cooney in Bloomfield Hills, Mich. "Bankruptcy judges have a responsibility to make sure everybody gets a hearing."
Added partner Michael Fleming: "Bankruptcy judges are extremely independent. They are appointed for 14-year terms."
Chrysler, the smallest of the Detroit 3, is also the most heavily dependent on sales of SUVs, pickups and minivans. That crippled the company when gasoline prices rose to record levels last year. Doubts about the company's survival since last November's congressional bailout hearings further hampered sales and have contributed to Chrysler's 45.5 percent decline this year as the U.S. industry reels from the deepest recession since the 1930s.