Major banks agree to reduce Chrysler debt.

At the end of last week, things were looking pretty bleak for the survival of Chrysler.  Now a ray of hope shines as the large auto company faces the zero hour.  This afternoon, CNN is reporting that Chrysler’s debt deal with major banks has been reached.

“The major banks that loaned Chrysler LLC about $7 billion have agreed to significantly reduce that debt, according to the Treasury Department, a move that could save the struggling automaker from having to file for bankruptcy later this week.

“The agreement from Chrysler’s principal banks is an exceptional accomplishment in line with the President’s firm commitment that all stakeholders sacrifice to make this deal succeed,” said an administration official Tuesday.”

Chrysler still needs to complete it’s alliance with Fiat and have it’s agreement with the UAW pass an official vote before Thursday’s deadline.  The debt reduction was generally thought of as the largest and most difficult step in the process, so there is still is hope for the auto manufacturer.

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