Chrysler plans to shut 5 more plants

While Chrysler faced its first hearing yesterday in Manhattan bankruptcy court, court documents showed the ailing automaker plans to close plants in Michigan, Missouri, Ohio, and Wisconsin that employ about 4,800 people. Chrysler said they will be offered jobs at other plants.

Judge Arthur Gonzalez approved a series of motions at the swift hearing, launching a chain of events designed to ensure that Chrysler's bankruptcy process is the quick and "surgical" one the company and the US government have promised.

But what could prove to be the case's biggest challenge still lies ahead. Chrysler must eventually reach an agreement with creditors who refused to come to a deal that would have erased much of the automaker's debt and might have avoided a bankruptcy filing.

Another hearing was scheduled for Monday, where Chrysler lawyers will ask Gonzalez to let the company start using $4.5 billion in loans from the US and Canadian governments to keep operating.

Chrysler lawyer Corinne Ball, of the firm Jones Day, said the loans and the sale to Fiat represent "an important lifeline" for Chrysler's dealers, supplies, and customers.

"We have to move at a good speed throughout this proceeding," she said.

Gonzalez wasted no time, opening the meeting with just five words: "Please be seated. Debtor's counsel?"

Later, Gonzalez twice cut off a lawyer representing Chrysler's dealers, then said, "I think you've gotten your point across."

By the end of the hearing, the judge had decided six motions in about an hour.

Gonzalez, who spent years sorting through the wreckage of Enron Corp. and WorldCom Inc., will be responsible for balancing the Obama administration's plan for a speedy emergence with the letter of the bankruptcy code. "Gonzalez, I think, is harder to ruffle than a lot of folks," said Nancy Rapoport, editor of a book on Enron's collapse, told Bloomberg. "And obviously he's no stranger to mega-cases."He is known as a pro-debtor judge, meaning he favors companies over their creditors.

Chrysler filed for bankruptcy protection Thursday after a few creditors defied government pressure to wipe out the automaker's debt.

Chrysler said it won't keep its Sterling Heights, Mich., plant that makes Chrysler Sebrings and Dodge Avengers, and the Conner Avenue plant in Detroit that makes Dodge Vipers. The St. Louis North plant that makes Dodge Ram pickups would also close, as will a parts stamping plant in Twinsburg, Ohio, and an engine plant in Kenosha, Wis.

Two other plants that will be left out of the Fiat sale are the St. Louis South plant and an assembly plant in Newark, Del., that were idled last year. Chrysler's Detroit Axle plant is already scheduled to be replaced.

Also, Chrysler said its president, Tom LaSorda, is leaving the automaker immediately.