Washington - US President Barack Obama called on Chrysler LLC bondholders to make sacrifices in order to keep the nation's third largest automakers from filing for bankruptcy. Obama, speaking at a town hall meeting in Arnold, Missouri, credited the autoworker unions for taking the necessary steps to help Chrysler avoid bankruptcy protection by accepting a new labour agreement.
"One of the key questions now is: Are the bondholders, the lenders, the money people, are they willing to make sacrifices as well?" Obama said. "We don't know yet."
Chrysler has until Thursday to present a plan to prove its long- term viability, or risk losing 4.5 billion dollars it has received in emergency government loans. Chrysler is also working on a merger with Italian carmaker Fiat.
Chrysler is still waiting to hear from its smaller lenders about a proposal to accept 2 billion dollars in cash in return for wiping out 6.9 billion dollars in debt. Larger creditors like JP Morgan and Citibank have tentatively agreed. A rejection by the small banks would push Chrysler into bankruptcy.
Chrysler CEO Robert Nardelli, in a letter to employees obtained by the German Press Agency dpa, expressed optimism the company will survive without seeking bankruptcy, pointing to the deal with the union on labour agreements and the willingness of the large creditors to accept the debt offer.
"Im encouraged by this progress and I want you to know I deeply appreciate the sacrifices made by so many constituents to help us reach the restructuring targets established by the government," he said.
Obama imposed Thursday's deadline on Chrysler to present restructuring plans to lose continued government financing.
The largest US automaker, General Motors, faces a similar deadline June 1.
