The country's third-largest automaker will head to bankruptcy court, an Obama administration official told NPR on Thursday. The decision comes after talks with Chrysler's investors and lenders broke down.
Bankruptcy does not mean the end of the automaker; it will keep selling cars and honoring warranties. The bankruptcy process will be a way for Chrysler to get rid of lingering debt, possibly reduce its dealer base and finalize a partnership with Italian car maker Fiat.
President Obama is scheduled to make a speech on the auto industry at noon Thursday.