Chrysler LLC files for bankruptcy

Chrysler LLC heads to U.S. bankruptcy court Friday morning to obtain permission to continue paying employees and meeting customer and dealer obligations against a backdrop of mounting opposition from certain of its lenders.

A group of about 20 lenders that balked at the terms of the government-brokered deal said late Thursday it plans to object to the company's reorganization plan, which will put Chrysler's core assets into a new company owned by its workers, Italian car maker Fiat SpA and the U.S. and Canadian governments.

Chrysler filed for bankruptcy on Thursday in New York and disclosed the plan. The plan, however, requires approval by the U.S. Bankruptcy Court.

The company has been pushing for a prompt hearing, saying in court documents that the proposed transaction is the only means to avoid liquidation of the 83-year-old car maker.

Ahead of Friday morning's hearing, the courtroom of Judge Arthur Gonzalez, who was assigned the case, was filled largely with lawyers and their assistants, with no standing room left an hour before the start time.

On the agenda for Friday's hearing are so-called "first-day motions" that will enable Chrysler to continue operating, such as its right to continue to use its cash management system.

The company has 38,500 hourly and salaried workers in the United States It has 23 manufacturing plants and facilities and 15 parts depots in the there and 3,200 dealers employing 140,000 people.

Hero Motors ties up

Hero Motors on Tuesday signed a MoU with BRP-Powertrain for supply of automotive transmissions worth $250 million over the next five years.

The move is viewed as an effort to strengthen its position as a global manufacturing base for BRP-Powertrain, "In the recessionary conditions, big companies are outsourcing work which they would not have done otherwise. We are poised to grow through this development," says Pankaj Munjal, managing director, Hero Motors, adding that the transmission would be manufactured at the company's unit in Ghaziabad that has an installed capacity of one lakh units.

In the last two years, Hero Motors had already invested Rs 45 crore along with BRP-Powertrain for setting up a base in the company's Ghaziabad unit for making automotive transmissions.

Hero Group would simultaneously invest Rs 100 crore in the next one year to partly scale up the transmission producing capacity at Ghaziabad and to partly augment the manufacturing capacity of automotive discs which it produces through a joint venture with Japanese auto firm Sumitomo.