White House calls NYT Chrysler report ‘speculation’

The White House refused to comment directly on a New York Times report Thursday that Chrysler was preparing to file for bankruptcy next week, calling it “speculation.”

“In a negotiation like this, everything is speculation until there’s a deal,” a senior administration official said. “It should surprise no one that the administration is planning on contingencies, but we remain focused on the goal and engaged with all stakeholders to bring Chrysler and Fiat to a working partnership.”

The statement reflects reported uncertainty over certain elements of a restructuring deal for Chrysler, primarily how to handle its almost $7 billion in obligations to creditors. The administration also appears to be leaving open the door for a “quick rinse,” prestructured bankruptcy discussed by some administration officials in recent weeks.

The administration set a deadline of next Thursday for Chrysler to enter into a strategic relationship with Italian automaker Fiat, or risk entering bankruptcy. Both Chrylser and the Obama administration have cited that partnership as a preferred option, which the Treasury would finance with up to $6 billion in loans.

Officials at the Department of Treasury and Chrysler were not immediately available for comment Thursday afternoon.