The official deadline by which Chrysler is supposed to have restructured its debts expires today, and having failed to convince either the government or its key debtholders to make any further concessions, it's looking increasingly likely that the firm will enter Chapter 11 bankruptcy protection imminently.
But one unlikely potential rescuer emerged yesterday, in the shape of giant US car workers' union the United Auto Workers. If reports are to be believed, the UAW could end up with as much as 55% of Chrysler, plus seats on the board and voting rights to boot. All in return for halving the $10.6bn the firm is obliged to pay into its employee health plan trust.
As an indicator of just how bad things have got in the US car business, the fact that this deal is even being considered is about as good as you could get. Capital and labour are hardly known for seeing eye-to-eye in this sector - indeed the UAW only won recognition for its members after having the firehoses turned on them during a strike at a GM plant in Flint, Michigan 72 years ago. The idea that the workers might be about to get a real say in how the firm is run may well be sending shivers down the spines of many a modern-day US captain of industry.
And there's more - the 430,000-strong UAW is apparently mulling similar deals with the other big US carmakers, which could result in its owning 39% of GM and a sizeable chunk of Ford as well. It looks like the car firms could be about to follow the investment banks into the hands of owners whom nobody would have predicted only a few months ago.
There is a kind of logic to the proposal - after all, unions do exist to protect the interests of their members, if not usually in quite such a proprietorial fashion. And our guess is that most of the 26,000 strong Chrysler workforce would prefer to keep their jobs, even if it does mean accepting a much less generous health insurance scheme.
But in reality, chapter 11 remains the most likely immediate outcome, the US legislation affording as it does considerably more protection from creditors than UK or European insolvency law. Although Fiat boss Sergio Marcchionne is clearly interested in taking a stake - gaining real access to the US market would fulfil a long-held ambition for Fiat’s controlling Agnelli family - he only needs an operation a fraction of the size of Chrysler's existing footprint. Just the kind of massively slimmed-down business that is likely to emerge from a chapter 11 restructure, in fact. Marchionne also has other fish to fry, having been mentioned as a possible buyer for the European chunk of GM, too.
It's also very hard to believe that Fiat would sign up to any deal that involves sharing control of the business with a union, or that any of Chrysler's other debtors - including JP Morgan, Morgan Stanley and Citigroup - would swallow the deal. For while there are plenty of examples of successful co-operative businesses from around the world – our own John Lewis being perhaps the best known – not many of them are American. And even fewer have made a go of things having assumed control when the firm was only hours from collapse. Watch this space...
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