AUBURN HILLS, Mich., April 22 (UPI) -- Michigan Gov. Jennifer Granholm Wednesday urged Chrysler's credit holders to strike a deal with the automaker, eight days before a critical loan deadline.
Chrysler has until April 30 to reach a deal with creditors that would convince the federal government to release $6 billion in emergency loans to the company. Recent negotiations between the U.S. Treasury and the banks that hold $6.9 billion in Chrysler's secured debt show the two sides are far apart, The Detroit News reported.
Granholm called for creditors to "do the right thing."
"They need to collapse their debt as the Obama administration has asked," she said, "to do otherwise is not only disappointing, it is unconscionable at best."
Creditors have flatly rejected the government's proposal to have them write off all but $1 billion of their debt. They also said a deal with Italian automaker Fiat that the Treasury supports would create a negative influence for at least three years as the company retooled its plants to suit Fiat's needs.
The government, in turn, said the creditors' terms were not "constructive."
The creditor's counter offer included a debt reduction to $4.5 billion plus a 40 percent stake in the restructured company and a seat on Chrysler's board.