The Supreme Court has approved the U.S. government-backed sale of Chrysler to a group led by Italian carmaker Fiat SpA, a victory for the bankrupt automaker and the Obama administration. The high court rejected a request from Indiana pension funds and others of the transaction to delay the deal while they challenge the sale to a group led by Fiat, a union-aligned trust and the U.S. and Canadian governments.

The Chrysler case has been widely regarded as a model for General Motors, which also is using a similar quick-sale strategy in its bankruptcy in New York. Chrysler and the Obama administration urged the Supreme Court to allow the sale to go forward and said a long delay could kill the deal, resulting in the automaker’s liquidation and the loss of more than 38,000 jobs.

They cited Chrysler’s worsening financial situation, with $100-million-a-day losses. The sale agreement sets a June 15 deadline to close.

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In a reversal on Bush’s prior commitment to make a decision on the issue of Corporate Average Fuel Economy (CAFE) standards, the U.S. Department of Transportation (DOT) today revealed it will not make a decision before President-Elect Barack Obama takes office later this month.

Proposed CAFE regulations on new cars would force fuel economy upward toward a goal of 35mpg fleet-wide by 2020. The debate exists on how to graduate the progression toward that goal. The NHTSA has proposed one avenue to raised standards, seeking a total of 25% improvement by 2015, but that would cost the industry about $47 billion over the five-year period. …click here to read more

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