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Report: Chrysler will declare bankruptcy

U.S. automaker Chrysler appeared headed toward declaring bankruptcy on Thursday, according to a report in the New York Times.

The Italian automaker Fiat is in talks with Chrysler about buying a 20 percent stake in the privately-held company and may ask Chrysler to file for bankruptcy first, the Times reported.

President Obama, in a Wednesday night nationally televised press conference, said he is "hopeful" that Chrysler can come up with a plan to remain viable.

"What we've seen is the unions have made enormous sacrifices on top of sacrifices that they had previously made," Obama said. "You've now seen the major debt holders come up with a set of potential concessions that they can live with."

The concessions bode well for a Chrysler-Fiat merger, Obama said, adding that he is "feeling more optimistic than I was about the possibilities of that getting done."

Obama indicated he does not want the federal government to interfere too directly in the companies, which have received billions of dollars in federal backing, but said the government must shore up the industry.

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