An article from Bloomberg.com asserts that Chrysler’s bankruptcy may take up to two years to work out, rather than the 60 days projected by the Obama Administration on April 30. The headline grabbed attention, since it raised the specter that Chrysler would be dead in the water for a lengthy period, which would have dire consequences for its survivability, let alone suppliers, dealers, employees, and other stakeholders.

A closer reading of that article and other reports, though, outlines a slightly different picture, where Chrysler would essentially be divided into two pieces, with Fiat quickly acquiring Chrysler’s best assets (such as the Jeep brand, and perhaps the Dodge Ram truck), while other creditors would be left holding less worthy properties, such as a number of plants Chrysler plans to shutter. That means, in essence, that part of Chrysler could emerge from bankruptcy in the 60-day timeframe as a Fiat subsidiary, or “alliance,” and another part that could languish in bankruptcy court where various debtors would fight it out for the remains. The “new” Chrysler’s major owners would be Fiat, the United Autoworkers, and, for a time, the U.S. Treasury.

We will continue to monitor this fast-moving story, reporting here in the Cars blog and also updating advice and news on the Auto Crisis hub.

--Gordon Hard