Ailing Chrysler goes bust

The game is up for Chrysler. One of Detroit’s ‘big three’ car makers, the owner of Jeep and Dodge has gone bust in America. But it won’t be out of business for long, as it moved quickly to announce an alliance with Fiat.

Talks to save Chrysler through a multi-billion-dollar debt write-off plan collapsed, forcing it to file for Chapter 11 bankruptcy protection. But crucially, there’s no word yet on what the move will mean for the thousands of UK owners and 50 dealers.

The new deal sees Fiat take over 20 per cent of Chrysler for no cost, and this could rise to a controlling stake once American Government loans are repaid, if the Italian giant helps build new efficient engines and platforms.

Chrysler isn’t the only US brand to go under. General Motors confirmed Pontiac – founded in 1926 and famous for its Firebird muscle car – will close at the end of the year, too.

Assuming GM doesn’t join Chrysler as a bankrupt firm, it will focus on four core brands: Chevrolet, Cadillac, Buick and GMC in its home market.

P20: Mike Rutherford’s view