Chrysler Reaches Deal With Treasury: Report

By Caitlin Millat
|  Tuesday, Apr 28, 2009  |  Updated 11:57 AM CDT
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Chrysler Reaches Deal With Treasury: Report

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Chrysler and the Treasury have reportedly reached a deal that could keep the automaker from bankruptcy.

The Treasury Department has reportedly reached a deal with cash-strapped automaker Chrysler LLC that could keep the automaker from bankruptcy, The Washington Post reported Tuesday citing two sources familiar with the negotiations.

The terms of the deal weren't immediately available but would likely include the planned alliance with Italian company Fiat, which is set to take control of some of Chrysler's assets, the Post reported.

The tentative deal would likely give Fiat a 35 percent stake in the company and give the remaining amounts to lenders and the United Auto Workers' union, which also struck a deal with Chrysler over the weekend.

If the deal goes through, the UAW would get the majority stake -- 55 percent -- and in turn relieve some of the $10 billion the "Big Three" automaker owes the union.

Chrysler has until April 30 to negotiate a deal with the Treasury Department under a deadline set by the White House.

Chrysler's lenders are owed $6.9 billion in loans, but have since written down the debt to $2 billion. The company employs 54,000 workers internationally.

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