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Chrysler has today won court approval to sell most of its business to a group led by Italy's Fiat, as US motoring giant General Motors was expected to file for bankruptcy.
The Chrysler sale gives Fiat control of a fifth of Chrysler's business, while 68% will be owned by a union trust, The US Treasury and Canadian government will share the remaining 12%.
The deal should allow the American car maker to exit bankruptcy protection - which it has been under since 30 April - imminently.
But the news came after Obama administration officials confirmed that the century-old General Motors group will today become the third-largest bankruptcy filing in US history, as well as the largest-ever American manufacturing firm to go bust.
Administrators for GM will hope for a quick sale process that would see a core of the company surviving and emerging from court protection in as little as two or three months.
Analysts predicted the move will have wide implications for the auto industry.
Christopher Richter, auto analyst at CLSA Asia-Pacific Markets in Tokyo, said: “Companies are going to get smaller and so market share is up for grabs, which means that rivals like Toyota, Honda, Nissan and Hyundai are going to gain share.”
Meanwhile, unions were today calling for clarity over the future of 5000 jobs at GM-owned Vauxhall manufacturing plants across the UK.
