Chrysler Bankruptcy Case Study

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On April 30, 2009 Chrysler filed for chapter 11 bankruptcy protection at the Federal Bankruptcy Court of the Southern District of New York and announced an alliance with Fiat. Chapter 11 is named after the U.S bankruptcy code 11, Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs and assets. It is generally filed by corporations which require time to restructure their debts. Chapter 11 gives the debtor a fresh start, subject to the debtor’s fulfillment of its obligations under its plan of reorganization. This paper will describe what happened during the time of bankruptcy. Filing for bankruptcy for the Big Three was one of the biggest blow in economy of United States. Chrysler, an American automobile…show more content…
Chrysler Corporation was renamed DaimlerChrysler Motor Company LLC. In 2000, Chrysler president James P. Holden misjudges the launch of 2001 minivan which caused company of $512 million loss, which led company to elect Dieter Zetsche as a CEO. It was under Zetsche’s reign, in 2005 Chrysler was considered to be the one of the healthiest corporation of Detroit compared to General Motors and Ford Motor Company. This success led Zetsche to be CEO of Daimler-Chrysler on January 1, 2006 and Thomas W. Lasorda became president and CEO of Chrysler Group. DCX”S subsidiary Mercedes- Benz made a huge profit which Chrysler incurred with loss which analyst believed that profits from 2004-05 would not be enough to pay for those losses. This was the point which led eight year merger to come to an end because Mercedes did not get any reasonable enhancement from Chrysler rather it was led…show more content…
Daimler was company which followed to the point process in their business while Chrysler favored team-oriented approach. The cultural difference between the two companies played another role, where Chrysler would focus more on achieving highest level of quality while Daimler did not. There were also period of trust issue between the employees of the two companies. To summarize, differences in corporate cultures and values, lack of coordination and lack of trust let the U.S. history to see the biggest blow of losses in Automobile

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