automotive: April 2009 Archives

Beleaguered auto manufacturer Chrysler filed for Chapter 11 bankrupty protection today in a move encouraged by the Obama administration. The bankruptcy filing is intended to rapidly clear Chrysler's debts and smoothe a path to a partial acquisition by Italian automaker Fiat.

Chrysler, which received billions of dollars from the United States government, then asked for more to stay afloat, is now conceding an inability to meet its obligations. Chrysler will idle its production lines for an extended period while the company restructures. In an interesting twist, the reorganized company will become majority owned by its employees via an independent trust controlled by the United Auto Workers union's healthcare fund. Fiat and the US government will own the rest.

No announcements have been made at this time regarding Chrysler's product lines or dealer network.

Several stores formerly profiled on Timely Demise are in the news today.

Pier 1, which announced up to 125 store closings in February, has closed 22 stores so far, 20 of them through lease negotiations.

Aeropostale, which has strong sales results in recent months despite the economy, issued another strong sales report, despite the Jimmy'Z store closings announced recently.

Advantage Rent-a-Car, which filed for bankruptcy in December, has been purchased by Hertz, which reportedly gives the acquiring firm a brand for budget-minded renters.

And in New Jersey, the recently bankrupt Marty's Shoes chain has been brought back to life. Its former CEO and original owner have purchased the Marty's brand out of bankruptcy and opened stores in four locations. An ecommerce site is operational, and plans are to open nearly 20 stores.

Updated April 10.

In Alabama, Big 10 Tires filed for bankruptcy protection, citing insufficient operating funds. The tire retailer has 104 retail stores across three southern states. Big 10 Tires plans to keep its doors open while negotiating rent and debt relief.