Car manufacturer Chrysler is expected to enter bankruptcy protection after failing to meet a US government deadline to finalise a major restructuring plan.
The Obama administration had set Chrysler a deadline of midnight tonight Washington time (5am Friday BST), but White House official says bankruptcy now looks inevitable.
Chrysler has already received a $4bn (£2.7bn) loan from the US government, and was due to present the latter with a restructuring plan by April 30 in order to gain further government loans of about $6bn (£4bn).
This would have included an attempt to persuade Chrysler’s main lenders to accept $2bn (£1.358bn) in cash, while writing off its $6.9bn (£4.685bn) secured debt.
Earlier this week, Daimler reached a deal to relinquish its stake in Chrysler, while General Motors announced plans to slash 21,000 jobs in the US and axe its Pontiac brand.
Meanwhile in the UK, reports reveal that a £800m bail out package earmarked for Jaguar Land Rover is now in doubt with protracted discussions between the Treasury and the Department for Business, Enterprise and Regulatory Reform slowing down the process.
Any delays in agreeing terms with the Treasury for a refinancing plan could see a delay in the Tata-owned company gaining much needed funds. This could lead to significant job cuts.