U.S. President Barack Obama spoke just minutes ago at the White House to announce that the Chrysler-Fiat merger has been approved by the United States government and that Chrysler will file for Chapter 11 bankruptcy protection after negotiations with creditors collapsed. The so-called "surgical" bankruptcy process will last for 30 to 60 days and will involve up to $8 billion in government loans. The U.S. government will temporarily hold a large stake in Chrysler until the loans are repaid, at which point Fiat will take majority ownership.

"I am pleased to announce that Chrysler and Fiat have announced a partnership," Obama said during the press conference.

Obama called the hedge funds that resisted concessions up through last night a "small group of speculators" who were endangering Chrysler and its employees. The bankruptcy will allow Chrysler to circumvent creditors who were unwilling to make any concessions. Obama said that it would be unsustainable for Chrysler to "let enormous liabilities remain in the books."

The President stated that the bankruptcy process will be quick and efficient and that it is "not a sign of weakness, but one more step on a clear path to Chrysler's revival."

The eventual plan is for Fiat to take majority ownership of Chrysler, a strong reversal of fortune for students of history who are aware of Chrysler's activities in Italy in the 1970s and 1980s.

"Every dime of taxpayer money will be repaid before Fiat can take majority ownership," Obama said.

Meanwhile, Nardelli has announced that he will leave Chrysler after the alliance is completed. Nardelli says that Chrysler and Fiat will concur on a new leader for the company when he departs.

Though details of the merger have not been released - they will become clear in the near future - Obama did confirm that Fiat-designed vehicles will be built in the U.S. and that the Italian automaker "has agreed to transfer billions of dollars worth of cutting edge technology."

Nardelli did indicate that the Fiat 500 can quickly easily be homologated for sale in the U.S., though no official word has been released from the automaker. At the New York International Auto Show earlier this year, Chrysler President Jim Press showed off a Fiat 500 and said "Wouldn't it be nice?"