Chrysler will get $15-billion in government aid

U.S. and Canadian governments plan to give about $15-billion (U.S.) in financing to Chrysler to help keep it operating through bankruptcy protection.

Sources say the federal and Ontario governments will provide about $3-billion. This will cover debtor-in-possession financing and exit financing when the beleaguered auto maker emerges from Chapter 11 bankruptcy protection. The governments will hold a 10-per-cent stake in Chrysler, with the Canadian governments' stake sitting at 2 per cent. It is anticipated Chrysler will file for bankruptcy protection on Friday. Talks between debt holders broke down early Thursday, but, the deadline for a deal is still 11:59 p.m. today. General Motors Corp. plans to cut 21,000 U.S. factory jobs by next year; phase out its storied Pontiac brand and ask the government to take company stock as part of a major restructuring effort needed to get more government aid. The signing of a strategic alliance with Fiat SpA is imminent and expected to be announced late Thursday morning by U.S. President Barack Obama. Fiat gets a 20-per-cent stake in Chrysler. If the No. 3 Detroit auto maker goes into bankruptcy protection, it will be split into two companies, with its key Canadian operations being placed into the part of the company that will emerge from creditor protection and form the basis for the Fiat-Chrysler strategic alliance. Any unwanted assets will be hived off into another company.