The feds are pushing troubled automaker Chrysler to file for chapter 11 bankruptcy protection, the New York Times reported today. This could happen as early as next week, according to the report.

While U.S. automakers General Motors and Chrysler continue to lobby Congress for more funds they, and other manufacturers are making appearances at the New York International Auto Show 2009, though in a decidedly non-festive mood.

Merging assets with the Italian automaker giant Fiat and credit, which the U.S. government promises to provide in the event of the conclusion of this transaction, does not guarantee that American carmaker Chrysler can avoid bankruptcy.

The White House first pushed out GM's Chairman and CEO Rick Wagoner, than said neither GM nor Chrysler have submitted acceptable plans to receive more bailout money, setting up what could be the end of the line for the two auto giants.

Following Philip F. Murtaugh's departure last month, Chrysler LLC has named John Kett vice president for Asia operations, the Automotive News reported on Monday.

Fiat, the Italian automaker, agreed on Tuesday to take over 35 percent of the shares of Chrysler; an alliance which could cause a ripple effect throughout the automotive industry.

Troubled by the financial crisis, U.S. auto giant Chrysler LLC announced on Friday that Philip F. Murtaugh, the chief executive of its Asia operations, will leave the company soon, according to a local media report.

The U.S. President George Bush speaking on TV announced that "allowing the U.S. auto industry to collapse is not a responsible course of action." The federal authorities will provide $13.4 billion in loans to Detroit automakers, the White House said Friday. However, Bush says the car makers must pay back the loan.

Hot on the heels of ending up cooperation with Chery, Chrysler is busy in talks with China’s another automaker Great Wall Motor on cooperation projects, auto163.net said.

Although Detroit automakers are struggling to avoid bankruptcy in America, the auto giants General Motors (GM) and Chrysler LLC are seeking to expand their Chinese market, Shanghai Securities reported, citing announcement of American auto industry and components supplier information.

Earlier this year, respected economist Paul Krugman was awarded the Nobel Prize in Economics. On Sunday, three days before the Nobel Prize ceremony, Krugman said that the U.S. automotive industry was doomed.

Some Congressional staff and some car company executives understand that pre-packaged bankruptcies of GM (GM) and Chrysler may be the only effective ways of saving the companies.