Chrysler News-U.S. Reaches Deal With Chrysler Banks, Person Says

By John Hughes

April 28 (Bloomberg) -- The U.S. has reached agreement with banks on terms to reduce debt of Chrysler LLC, according to a person with knowledge of the negotiations.

The banks’ representatives agreed to forgo $6.9 billion in debt in return for $2 billion in cash, said the person, who declined to be identified discussing the private talks. The deal is one of the steps Chrysler needed to avoid a bankruptcy after April 30.

Bankruptcy remains a possibility for Chrysler, the person said. All 46 banks involved need to ratify the terms, and it isn’t likely that all would, the person said. In that case, a quick, surgical type of bankruptcy may be needed to bring any dissenting banks into an agreement, the person said.

Chrysler, operating with $4 billion in U.S. loans, faces an April 30 deadline to restructure its costs or risk losing government support.

Shawn Morgan, a Chrysler spokeswoman, declined to comment.

Chrysler News-Cerberus defends not pumping more funds into Chrysler

Stephen Feinberg-Founder of Cerberus Capital Management LLC


Private-equity fund responds to New York Times editorial

Chrissie Thompson
Automotive News
March 2, 2009 - 12:43 pm ET

Cerberus Capital Management LP wants more federal loans for Chrysler LLC in order to avoid "excessive risk-taking" that contributed to Wall Street's demise, Cerberus' COO said today in The New York Times.

Mark Neporent, COO of the private-equity fund that owns 80.1 percent of Chrysler, made the comments in a letter responding to a critical Times editorial last week.

The Times had said Chrysler's restructuring plan submitted Feb. 17 to the Treasury Department was "little more than an assurance that it has already cut costs and accomplished most of what it had to do." The newspaper questioned why Cerberus is not putting more money into Chrysler, as "private-equity funds like Cerberus are supposed to do."

Cerberus intends to protect its investors through rules that limit how much capital it can commit to an individual company, Neporent said in his letter.

"Why should these retirees, universities and charities, simply because they are represented by a private investment manager, be required to take additional risks or make additional investments, when GM or Ford shareholders are not?" he wrote.

Neporent said Cerberus had appointed a "world-class management team" that "has executed many of the hard operational fixes that other American car companies are only now addressing." He reiterated Cerberus' willingness to surrender its equity stake in Chrysler Automotive, convert debt to equity and put $2 billion in other Chrysler interests on a lower priority behind the government's loans.

The Times' editorial had called the 100,000-unit production cut Chrysler offered in its Treasury restructuring plan "paltry." The automaker would then have "capacity to make almost 1 million vehicles more than it will sell this year -- on the questionable assumption that demand, and its market share, will bounce back next year," the editorial said.

The Times suggested the government had good reasons to say no to Chrysler's request for $5 billion in federal loans in addition to the $4 billion it has already received.

"It seems the secretive private-equity fund is willing to gamble on Chrysler's survival with the taxpayer's dime, but not its own," the editorial said. "Saying no might even make Cerberus reconsider and put up some cash of its own."

Cerberus took control of Chrysler in August 2007, appointing former Home Depot CEO Bob Nardelli to the automaker's top position. Nardelli, who had a reputation as a tough cost-cutter, hired former Home Depot executive John Campi as purchasing chief. Campi has since resigned, but not before withholding bailout cash from now-liquidated Plastech Engineered Products Inc. and litigating with other suppliers.

Other changes have included the arrival of Toyota's Jim Press to run Chrysler's dealer and marketing operations and Nardelli's $1.5 billion overhaul of 400 fit-and-finish problems in Chrysler vehicles.

Chrysler News:French parts maker sues Chrysler for $110 million

DETROIT, Feb 10 (Reuters) - French auto parts maker Faurecia SA (EPED.PA: Quote, Profile, Research) has sued Chrysler LLC for $110 million, saying the struggling U.S. automaker failed to pay engineering costs it owed when vehicle sales plunged.

Faurecia claims Chrysler did not reimburse it for the cost to develop and supply components related to four Chrysler vehicle programs including the Dodge Nitro SUV, according to the lawsuit, which was filed in a Michigan court on Monday.

Chrysler, owned by Cerberus Capital Management [CBS.UL], said the claim misrepresented the nature of the contract between the two companies.

"Faurecia has taken huge liberties in this lawsuit, grossly overstating alleged damages and totally absolving itself of any assumption of risk, contrary to our supply agreements with the company," Chrysler spokesman Mike Palese said in a statement.

The lawsuit by Faurecia is one of several disputes between Chrysler and its suppliers to become public in recent months and comes at a time when U.S. auto sales have tumbled to a 27-year low.

Falling vehicle sales and plant shutdowns by major automakers have added to the intense pressure faced by auto parts suppliers from tight credit conditions.

Faurecia supplies a range of parts for Chrysler including the instrument panel, door panels and seats for the Chrysler Sebring and Dodge Avenger sedans.

The company also supplies the exhaust systems for the Dodge Nitro SUV and Dodge Caliber hatchbacks.

Faurecia said sales of the Chrysler vehicles it supplies plunged far below the automaker's initial projection in 2008. Continued...

Chrysler Bankruptcy News:Analysts Say Carmakers' plans need more time

From Detnews.Com
March 31 deadline too soon to get bondholders on board with Chrysler, GM changes, they say.
Alisa Priddle and David Shepardson / The Detroit News
As General Motors Corp. and Chrysler LLC are scurrying to put the finishing touches on their restructuring plans due next Tuesday to the Treasury, finance and auto industry experts say submitting plans is one thing, but getting bondholders and all other parties involved in a massive restructuring to agree to those plans by the March 31 deadline seems unrealistic.

Meanwhile, GM CEO Rick Wagoner lobbies key lawmakers in Washington today to ease the way for GM's plan.

"I wouldn't be surprised if the timetable got extended, because clearly the original plan was a temporary fix," said Mark Oline, a Fitch Ratings analyst in Chicago. "It was going to be up to the new Congress and Administration to put in a longer-term solution."

Auto analysts and bankruptcy lawyers say the deadline set out in the federal bailout of the automakers is too ambitious to get bondholders on board in just a few more weeks. They say GM in particular needs an extension to avoid being forced into bankruptcy if it can't show progress on its assignment to cut $27.5 billion of unsecured debt down to about $9.2 billion by the end of March.

The concern centers around GM because the public company has many junk bonds and unsecured creditors, said Judy O'Neill, partner with Foley & Lardner LLP's Detroit office and an expert on Chapter 11 bankruptcy....More

Chrysler News:Chrysler shutters 3 plants after brief reopening

Bradford Wernle
Automotive News
February 5, 2009 - 12:01 am ET

DETROIT -- Chrysler LLC, hobbled by shrinking sales and soaring inventories, shut down three assembly plants Monday after reopening them two weeks ago.

Detroit-area factories that make the Chrysler Sebring and Dodge Avenger, Jeep Grand Cherokee and Commander, and Dodge Ram 1500 and Dakota had resumed production on Jan. 20 following an extended holiday shutdown.

"It's always about managing product and dealer inventory," Chrysler spokesman Dave Elshoff said. "If dealer inventory is high, we're not going to build on inventory."

He said Chrysler will assess reopening the plants on a week-to-week basis.

Chrysler, which posted a 55 percent decline in January sales, said it finished the month with 359,980 vehicles in stock, or a 151-day supply. That's more than twice the 60-day level considered normal.

Chrysler has been asking dealers to buy vehicles to help it stay solvent. The automaker has received a $4 billion loan from the U.S. Department of Treasury and says it needs $3 billion more to survive.

The company is also planning on an alliance with Italy's Fiat S.p.A. that would bring small, fuel-efficient cars to North America.

Most of the vehicles made at the three Michigan factories had sharper sales declines in January than the company itself. The plants, their products and January sales:

Sterling Heights Assembly -- Chrysler sold 1,943 Sebrings and 2,171 Avengers, down 79 percent and 70 percent, respectively.

Jefferson North Assembly -- Jeep sold 3,124 Jeep Grand Cherokees and 1,072 Commanders, down 60 percent and 71 percent, respectively.

Warren Truck -- Dodge sold 12,843 Ram pickups and 1,459 Dakotas, down 35 percent and 30 percent, respectively.

Chrysler News:U.S. $3 billion loan part of Chrysler-Fiat deal

DETROIT (Reuters) – Chrysler LLC's deal with Fiat SpA (FIA.MI) depends on the U.S. automaker receiving an additional $3 billion emergency loan from the U.S. government, the company's product development chief said on Wednesday.

"I think that is part of the deal," Frank Klegon said when asked if the automaker needed the additional $3 billion for the Fiat deal to be completed. "That is part of the process. The expectation is that that is an important part of it."

Chrysler, which had asked for $7 billion, received $4 billion U.S. emergency loan on January 2. The automaker has said it is counting on getting the rest of the money to keep operating.

Klegon believed the $3 billion of additional government aid was part of a term sheet Chrysler had with Fiat on the alliance. Chrysler has been calling the request for additional support a second tranche, or the second half of the original $7 billion of aid it sought late last year.

Chrysler, owned by private equity firm Cerberus Capital Management, announced on Monday an alliance with Fiat that would give the Italian automaker a 35 percent stake in Chrysler in exchange for access to its technology and overseas markets.

Fiat would help Chrysler put together the restructuring plan Chrysler has to submit to the U.S. government by February 17.

Klegon said the U.S. Treasury had been alerted to the deal and he hoped it would approve of the agreement.

Klegon said discussions had been going on with Fiat on the product side for some time.

"I had no knowledge there was a bigger discussion going on," he said, adding the deal does not bar the automaker from other alliances.

Klegon said Chrysler's alliance with Nissan Motor Co Ltd (7201.T) that would provide small cars to Chrysler and large trucks to Nissan was still going forward, as was Chrysler's minivan production for Volkswagen AG (VOWG.DE).

Klegon did not know if Chrysler would keep all three brands, but, ultimately, that would not be the product development chief's call.

"Cerberus are the guys making the deals. They are the ones who at the end of the day negotiate with Fiat," he said. "We are obviously engaged as the operating side and the product side, but the actual deal is under Cerberus leadership."

Under the terms of the deal, which has to be approved by the U.S. government, Fiat would not pay cash for its stake in Chrysler.

Chrysler's sales tumbled 30 percent in 2008 and it ended the year with only $2 billion in cash and reliant on a government bailout to stay afloat.

Chrysler, which owns the Jeep, Dodge and Chrysler brands, is 80.1 percent owned by Cerberus, which paid $7.4 billion for its stake in 2007. Former Chrysler parent Daimler AG (DAIGn.DE) holds the rest of Chrysler and is looking to sell its stake.

Daimler has written down the value of its remaining 19.9 percent stake in Chrysler to zero.

Fiat has said it could raise its stake beyond the initial 35 percent, but that step would depend on the success of Chrysler's restructuring.

(Reporting by Poornima Gupta and David Bailey; Editing by Andre Grenon)

Chrysler News:Chrysler and Fiat sign merger agreement

Italian carmaker Fiat and US car concern Chrysler have signed an agreement to merge their companies, Chrysler disclosed.

Chrysler, at its Auburn Hills, Michigan headquarters, said that the agreement is still preliminary and not yet binding.

Further details were not immediately disclosed. Earlier on Tuesday, Fiat deputy chairman John Elkann said that the Turin-based carmaker is in talks with Chrysler amid reports of a possible purchase by the Italian company of a majority stake in the ailing US producer.

"It is no secret that we are talking. It has been a while that we are in talks," Elkann, a heir of the Agnelli family which controls Fiat, was quoted as saying by the ANSA news agency.

Elkann indicated more details on a possible deal would be available following a Fiat statement later on Tuesday and a meeting of the company's board scheduled for Thursday.

Earlier on Tuesday, Milan's Bourse announced trading in Fiat stocks had been suspended pending the statement's release.

The Wall Street Journal reported on Monday that Fiat was considering acquiring a 35 per cent ownership in Chrysler by mid-year as the first step towards the acquisition of a possible majority stake in the US company.

The deal would give Fiat long-sought access to the US market for its small and mid-sized cars, with the Fiat 500 and Alfa Romeo reported to be at the top of the list.

Under the deal, Fiat could build its own small cars in the US and use the Chrysler distribution network. In exchange, Chrysler would tap Fiat's expertise building small and medium-sized cars to advance its own plans for new, front-wheel-drive models with lower emissions.

As petrol prices soared and the economy stalled, sales of Chrysler's mostly large, fuel-inefficient cars and trucks fell 30 per cent in 2008.

With auto sales at a 27-year low, Chrysler has laid off tens of thousands of workers and had to beg for government rescue financing of $US5.5 billion ($A8.21 billion) just to stay afloat for the next few months.

The loan terms require Chrysler to deliver a credible survival strategy by March, and an alliance with Fiat would be a tangible new strategy.

Fiat, which exclusively makes small cars with narrow profit margins, is struggling to keep its own head above water in Europe's expensive labour market.

Chrysler News:Chrysler Says It Won't Sell Pieces of Company

DETROIT -- Chrysler LLC on Wednesday shot down fresh speculation the auto maker is considering selling off pieces of its operations amid increasing concern about its ability to survive.

In a hastily organized conference call, Chrysler President Tom LaSorda said reports the company was in talks about selling its Jeep brand and other key assets are "absolutely false."

Chrysler is "going to be around for a long time," he said. "We are not going under."

Mr. LaSorda said he couldn't say if Chrysler's majority owner, Cerberus Capital Management LP, was considering selling the company as a whole.

It's time to buy back into American Vehicles!

Chrysler News:Jeep To Renault-Nissan and Magna is Cerbrus Selling off Chrysler?

Another Chrysler sell off article!

Jeep To Renault-Nissan, Belvidere To Magna Steyr, PT Cruiser To China. Maybe

Chrysler has been - some say desperately - seeking to “sell key assets” for a while. The Nikkei (sub) now says that Chryler might be getting close. The usual “unnamed people with knowledge of the discussions” whispered that Chrysler is talking to Nissan-Renault and the Canadian auto supplier Magna. The topics of the discussion are the Jeep brand and Chrysler’s Belvidere plant. The Jeep brand would go to Renault-Nissan, Magna would take the plant.

The parties aren’t strangers.

Chrysler had announced an alliance with Nissan last April.

As for Magna, the interest probably stems from Magna’s subsidiary Magna Steyr, which is creating more and more auto contract manufacture business. Magna Steyr has produced the Chrysler Voyager from 2002 to 2007, and currently produces the Chrysler 300C, the Jeep Commander and Jeep Grand Cherokee. Magna was one of the bidders for Chrysler when it was sold by Daimler in 2007.

According to Reuters, Chrysler has been in talks with Chinese automakers Chery and Guangzhou Automobile Industry Group Co, to sell them the PT Cruiser “brand” and tooling.

Of course, nobody will officially confirm that anything is true. Reuters says that representatives of Chrysler, Cerberus, Magna, and Nissan declined to comment. A spokeswoman for Renault denied talks were under way.

Reuters say there is reason for secrecy and plausible deniability: Renault-Nissan is looking to see whether a deal to acquire Le Jeep would hurt access to U.S. government funding. Good thinking.

[For the uninitiated: an asset sale is when you sell what's owned by the company without selling the company-- and the liabilities that go with it.]

Chrysler News:Corker hopes Chrysler will merge

Senator says GM's debt load is too high

Rick Kranz
Automotive News

DETROIT -- Tennessee U.S. Senator Robert Corker came to the Detroit auto show today and said Chrysler LLC needs to find a merger partner and General Motors is carrying too much debt.

Corker, a freshman Republican, emerged as a point man in the automotive debate after he and a group of Southern lawmakers blocked auto-bailout legislation last month.

Leading a throng of reporters on the floor of the show, Corker said he came to Detroit in response to a plea by Michigan Attorney General Mike Cox. Cox asked lawmakers to visit the show in a column published in Tuesday's Washington Post.

Corker's visit underscored the attention the industry has drawn as the U.S. economy reels from the longest recession since the early 1980s. At the end of 2008, U.S. auto sales had plunged to levels not seen since 1982.

In response to a reporter's question about Chrysler, Coker said the automaker's best chance of survival is with a partner.

"Chrysler probably needs to merge with somebody, not necessarily go away from the standpoint of existence,'' he said. "It appears to me based on what I have looked at that they have not invested in technology and those kind of things necessary to be a standalone.

"My hope is they will in fact merge and be a viable part of Michigan and our country."......More

Chrysler News:Chrysler 200c EV concept offers social networking capabilities

The Chrysler 200c EV concept vehicle, revealed today at the North American International Auto Show in Detroit, would offer social networking capabilities that could wirelessly connect drivers to friends in other vehicles.

The vehicle's personalized profile system would interact with Web sites such as Facebook and Twitter, said Frank Klegon, Chrysler's executive vice president of product development. Passengers could surf the Internet, scroll through a library of songs or other media, and find traveling information.

Chrysler's vehicle would be able to travel 40 miles without using gasoline - the same fuel economy General Motors is promising with the Chevrolet Volt extended-range electric vehicle.


But the heavy emphasis on interior electronics and design illustrates an increasing focus in the industry on combining great design with alternative powertrain technology under the hood.

Klegon said the 200c EV would present a "seamless, harmonious link between the vehicle and the home or your office."...More

Chrysler News:Automakers' U.S. Sales Tumbled In Dec.Chrysler Hit Hardest, With 53% Plunge

Chrysler's U.S. sales plunged 53% from a year earlier in December and other top automakers' sales shrank more than 30%, as the industry finished off its worst year since 1992 on a low point.

Chrysler said Monday that it will offer additional discounts after sales sank to 89,813 vehicles last month. Ford's (NYSE:F - News) sales dropped 32% to 138,458 and GM's 31% to 220,030.

Toyota's sales plunged 37% from December 2007 to 141,949 vehicles, Honda's (NYSE:HMC - News) 35% to 86,085 and Nissan's 31% to 62,102.

Worries about rising unemployment, a deepening recession and the credit crunch have led consumers to put the brakes on auto purchases, driving Chrysler and GM to the brink of bankruptcy and likely sending Toyota to its first operating loss in 71 years.

"The main reason why we are where we are is because of consumer confidence," said Jesse Toprak, executive director of industry analysis for auto site Edmunds.com.

Consumer confidence fell to a record low in December, and jobless claims hit a 26-year high amid a recession that began in December 2007.

Also on Monday, Porsche said sales fell 25.5% in December to 2,154 vehicles, while Daimler's sales fell 23.5% to 20,848 vehicles.

Stocks opened lower on Monday and stayed there, reacting little to the expected plunge in auto sales. The Dow fell 0.9%, the S&P 500 lost 0.5% and the Nasdaq declined 0.3%....More

Chrysler News:Chrysler finally gets $4 bn aid from US govt

January 03, 2009

US auto major Chrysler on Friday said it has received four billion dollars as emergency loan from the government, a move to avert a collapse of the ailing automaker.

"Chrysler received an initial four billion dollar loan to help bridge the current financial crisis," the company said in a statement.

The amount is a part of the $13.4 billion lifeline approved by the US government for General Motors and Chrysler last month.

"This initial loan will allow the company to continue an orderly restructuring while pursuing our vision to build the fuel-efficient, high-quality cars and trucks," Chrysler chairman and chief executive Bob Nardelli said in the statement.

The loans to the auto makers would be provided under certain conditions, including a limitation on executive pay.

Moreover, US President George Bush had said that the companies have to come up with viable plans for restructuring by March 31, 2009.

The auto makers would be given "three months to get in place plans to get restructure which we believe they are capable of doing...," Bush had said.

The US President had pointed out that the entities have to pay back the loans if they fail to come up with restructuring plans.

Earlier, the US Treasury had thrown a $6 billion lifeline for GMAC, the finance arm of beleaguered carmaker General Motors.

GMAC is the major lender for General Motors's 6,500 dealers across the country.

Chrysler News-Chrysler to idle all plants!

Carmaker moves to conserve cash, tightens lending to dealers

Alisa Priddle / The Detroit News

Chrysler LLC is shutting its North American production operations Friday for a month, the latest in a string of drastic cost-cutting measures it is making as it awaits word on emergency federal loans to prevent it from possibly having to file for bankruptcy.

The Auburn Hills automaker said the action is a response to a severe sales slump, tight credit and an urgent need to preserve cash. All 30 of the company's assembly, engine and transmission plants in the United States, Canada and Mexico will close at the end of their shifts Friday for at least 30 days, the company said.

Chrysler said people aren't buying vehicles because they can't get loans, but company dealers also have been hit by the tight credit market. Chrysler Financial has warned dealers that it may have to stop providing loans they need to stock their showrooms because dealers have been withdrawing too much money from an account used to fund the loans.

The production cuts come as Chrysler and General Motors Corp. seek up to $15 billion in emergency aid from the government to help them fund their operations for the rest of this year and into early 2009. Chrysler has asked for $7 billion in emergency loans and has warned that without the money, it could be forced to file for bankruptcy protection.

Chrysler's U.S. sales have slumped 27.7 percent this year and fell 47.1 percent in November, according to Autodata Corp.

"It's clear that the automakers are in a very fragile financial condition and they're taking steps to deal with it," White House spokeswoman Dana Perino said Wednesday. "We're aware of their financial situation and are considering possible policy options to provide assistance in an appropriate way. As we've said, a disorderly collapse of the auto industry should be avoided."

Chrysler spokeswoman Shawn Morgan said the issues aren't unique to Chrysler, which continues to restructure and invest in future products...More...

Chrysler News-Chrysler Squashes Chery Deal

The Detroit automaker needs a cheap compact car from China, but it just doesn't have the cash.

Chrysler will not be getting a small, cheap car from China, even though it could use one right now for its turnaround efforts. The Detroit automaker which is in the middle of lobbying for a bailout from Congress, and Chinese car giant Chery Automobile have scrapped plans for a joint venture, as both ailing companies decide that their own survival is more pressing than developing new car models.

The two automakers have broken off negotiations, first disclosed in July 2007, for Chery to produce a low-cost compact car to be sold under the Chrysler's Dodge brand in the United States and Europe. Though Chrysler needs to diversify from heavy pick-ups, midsize vans and jeeps, to small passenger cars, a Chinese-made car would have required financing for marketing, quality control and dealer distribution that Chrysler simply does not have. Chrysler would also have had to ensure the Chinese car met Western emissions and safety standards....More

Chrysler News-Chrysler Proposes Joint Venture to Improve Energy Technology

By MONICA LANGLEY/WSJ

WASHINGTON -- Chrysler LLC's plan for a government rescue includes a proposal that the auto makers and federal government establish "an independent joint venture" to develop improved energy technology, such as batteries for electric and hybrid vehicles. At the same time, Cerberus, its private-equity owner, is offering concessions to secure a $7 billion bridge loan.


In his testimony before Congress later this week, Chrysler Chief Executive Bob Nardelli will suggest that part of the $25 billion energy-security fund be put into this new entity, rather than having each of the Big Three try to develop the same critical component. "Then each company would take the technology and add its own branding and styling" and other features for its own models, a Chrysler executive said.....More

Chrysler News-Daimler struggles to shed Chrysler

Chrysler News
Tom Krisher / Associated Press
DETROIT -- Daimler AG says talks to sell its remaining stake in struggling automaker Chrysler Holding LLC have stalled because of exaggerated demands from Chrysler owner Cerberus Capital Management LP.

Daimler says Cerberus is making demands that exceed the value of the private equity firm's investment in Chrysler. It also says Cerberus is claiming Daimler provided incomplete information about Chrysler.

Daimler sold 80.1 percent of Chrysler to Cerberus last year in a $7.4 billion deal. Cerberus is trying to buy the remaining 19.9 percent stake and is in talks to sell Chrysler.

A message left for a Cerberus spokesman wasn't immediately returned.

Stuttgart, Germany-based Daimler said in a statement Wednesday that Cerberus has alleged "conduct outside the ordinary course of business by Daimler during the time between signing and closing of the transaction, as well as an allegation of incomplete information about the business."

Cerberus and Daimler signed the deal May 14, 2007, and the sale closed Aug. 6, 2007.

Daimler spokesman Han Tjan declined to give details of the allegations but said they are untrue.

"We reject these allegations as being completely without substance," Tjan said in a telephone interview.

Cerberus, a New York private equity firm, is making financial claims that go "beyond the framework of the contractually agreed possible obligations under representations and warranties," Daimler's statement said.

Since Cerberus acquired Chrysler, U.S. auto sales have dropped substantially. Chrysler sales fell 35 percent in October from a year earlier and are down 26 percent for the first 10 months of this year.

Cerberus has recorded substantial losses since it purchased the majority stake in Chrysler: $1.6 billion last year and $1.28 billion in the first half of this year.

Since Chrysler is privately owned, the company does not have to report its earnings, but they can be calculated from Daimler's balance sheet.

Auburn Hills-based Chrysler, along with other U.S. automakers, is seeking federal loans to stave off running out of cash. Cash-starved General Motors Corp. reportedly had been in talks last month to buy Chrysler.

Chrysler News-Nardelli Said Chrylser must have Merger or Alliances To Survive!

Checkout the latest Reuters report!

Nardelli wants the bailout loan and still a merger with a domestic company or overseas Alliances!


Chrysler urges bailout, Washington split
REUTERS By Soyoung Kim

DETROIT (Reuters) - Goldman Sachs suspended its rating on General Motors Corp on Thursday and said the automaker needs at least $22 billion in federal aid, while Chrysler said it would be "very difficult to survive" without government support.

But U.S. lawmakers remained deeply split over whether to bail out the U.S. auto industry, and U.S. Treasury Secretary Henry Paulson said any federal aid for the U.S. automakers must ensure their long-term viability.

Chrysler LLC Chief Executive Bob Nardelli said Chrysler was losing money due to a decline in U.S. auto sales to 25-year lows, and said Chrysler would seek federal money for its liquidity and restructuring needs.

In one of his few appearances since merger talks between GM and Chrysler broke off, Nardelli said Chrysler must have broader ties with U.S. automakers or alliances with overseas competitors to ride out the industry downturn.

The auto industry has stepped up lobbying efforts to get government support and the heads of the three U.S.-based automakers are expected to testify next week before a congressional committee considering aid for the industry.

The Bush administration said the government could quickly disburse $25 billion in loans already approved by Congress. However, the administration has responded coolly to an aid plan being shaped by Democrats, which includes using part of the $700 billion financial rescue package to provide additional liquidity for the auto industry.

U.S. President-elect Barack Obama is considering appointing someone to lead efforts to help the auto industry return to health, an Obama aide said on Thursday.

The sales slide that began in the United States has spread to the rest of the world because of the credit crisis. On Thursday, data showed that auto sales in Europe fell 15 percent in October from a year ago.

Goldman Sachs forecast that GM would end 2008 with $12.5 billion in cash, within the $11 billion to $14 billion minimum range GM has said it needs to operate, requiring the No. 1 U.S. automaker to seek government assistance.

GM's shares, which hit a 65-year low this week, closed down 13 cents, or 4.22 percent, at $2.95, as investors awaited news on any government rescue. Goldman Sachs said a new program to support the auto industry was most likely, though the timing was uncertain.

Also on Thursday, JPMorgan cut its GM rating to "neutral" from "overweight" and said the automaker needs "something immediately" to make it through the end of the year.

JPMorgan, which also slashed its target price for GM stock to $1.84 from $3.08, said a government bailout could easily reach $30 billion unless GM reforms its vast liability structure.

The warnings come in the wake of GM's deeper-than-expected third-quarter loss and cash burn, announced on Friday.

BAILOUT MEASURES DEBATED

Analysts have warned that any government assistance, which they say is imperative for GM to survive through early 2009, would come at a significant cost to existing shareholders.

Democratic leaders have called for emergency aid for the auto industry in addition to $25 billion of low-interest loans previously approved to support capital investment to meet new fuel economy mandates.

Lawmakers will hold a hearing next week to consider a bill to give another $25 billion in federal loans to U.S. auto manufacturers, possibly using part of the $700 billion financial market rescue law enacted last month.

But the White House said on Thursday it was not the intent of Congress to use the financial rescue package to help ailing U.S. automakers, while U.S. Commerce Secretary Carlos Gutierrez told Reuters that opening the financial bailout fund to one industry was "not a good idea.

House Republican leader John Boehner said spending billions on a bailout with no promises of reforming the companies was "neither fair to taxpayers nor sound fiscal policy."

GM, Ford Motor Co and Chrysler have been burning cash as the global credit crisis accelerated the decline in U.S. auto sales and placed severe limits on corporate and consumer borrowing.

GM ended September with $16.2 billion in cash, down from $21 billion at the end of the second quarter.

The downturn also has affected the plans of non-U.S.-based automakers in the United States.

The Nikkei newspaper reported that Toyota Motor Corp was considering delaying the start of production at its new Mississippi plant until 2011 or later, from 2010.

Standard & Poor's lowered credit ratings on two North American auto parts suppliers and placed the ratings on 14 other suppliers on negative watch, citing their exposure to the three U.S. automakers.

"The credit watch listings reflect the increasingly beleaguered state of the Michigan-based automakers and the multiple scenarios -- almost all of them negative -- that could play out over the next few weeks or months," S&P said in a report released on Thursday.

The agency lowered credit ratings on Dana Holding Corp to B+ from BB- and Magna International Inc to A- from A.

(Additional reporting by Kevin Krolicki in Palm Desert, California, Doug Palmer in Washington, Caren Bohan in Chicago, Christiaan Hetzner in Frankfurt; Editing by Gary Hill)


Stupid Daily News---Political Roast

Chrysler News-Could Chrysler Just Become Jeep Corp.?

Here is a very interesting article about Chrysler LLC just becoming Jeep Corp and dropping some of its vehicles to survive!

US News.com

One Way for Chrysler to Exit the Scene

Does the name "Chrysler" get your juices flowing? Make you crave the open road? Conjure visions of yourself in your dream car? Compel you to open your wallet?

Anybody who answers yes might want to rush out and buy a Chrysler right away (deals abound!) because the enduring American nameplate might not be around that much longer. While much of the alarming news from Detroit over recent weeks has focused on General Motors and Ford—which could both run out of cash in 2009 and face the prospect of bankruptcy—the No. 3 U.S. automaker is probably in even worse shape.

Overall Chrysler sales, which include the Jeep and Dodge nameplates, are down 26 percent for the year, compared with 15 percent for the industry and 21 percent for the three domestic automakers combined. Chrysler, arguably, has no compelling small or midsize passenger cars of the kind thrifty buyers want these days. It recently canceled one of its more innovative vehicles, the Dodge Durango hybrid, just weeks after introducing it—a panicky move. Even worse, GM bailed out of a proposed merger with Chrysler to tend to its own mounting problems, which leaves Chrysler's regretful owner—the private equity firm Cerberus Capital Management—increasingly desperate to unload its unloved stepchild.

But what if Chrysler LLC suddenly became the Jeep Corp.?

That's an intriguing idea floated by CNW Marketing Research, an Oregon-based research firm with a track record of predicting industry trends. In a fresh study, CNW found that the Jeep brand resonates much more strongly with car shoppers than any other brand under the Chrysler umbrella. The findings suggest that Chrysler might not survive the worst automotive downturn in decades, but it might have a better chance if it consolidated its vehicles under the Jeep name. Details of the study:

The Jeep brand is much cooler than Chrysler. No surprise here, since Jeeps still connote rugged off-roading and teenage adventure. Specifically, CNW found that a Jeep vehicle is nearly twice as "acceptable" to friends, relatives, and colleagues as a Chrysler vehicle, which is considered more stodgy. And Jeeps convey a much stronger self-image to their owners.

Even baby boomers prefer the Jeep brand over Chrysler. That's surprising, given that Jeep models like the Wrangler and Liberty, designed for unfriendly terrain, tend to punish aching backs, while Chrysler products like the 300 sedan or the Pacifica crossover are pretty plush. But boomers are probably voting with their egos.

Jeep connotes quality. The perception isn't entirely accurate: The Jeep lineup scored below average in J.D. Power's 2008 quality ratings, on a par with Mitsubishi and Suzuki. But apparently, the ability to ford a stream counts as quality, even if the A/C or cruise control blinks out occasionally.

Chrysler LLC could drop most of its Chrysler and Dodge products. Consumers would barely notice, even though it would throw thousands of workers out of their jobs and cause upheaval at the company.

Some Dodge trucks could take the Jeep badge. The Dodge Ram pickup truck still commands a loyal following. And Jeep has no pickup: You do the math. Dodge SUVs like the Durango and the Journey could survive just as well if they were Jeeps.

Some old Jeep names still resonate. Retired names like Wagoneer, Comanche, and Renegade could be revived and applied to Dodge products.

There's one question CNW can't answer just yet: If the whole company became the Jeep Corp., what would happen to Chrysler's minivans, its one other successful lineup? Surely Jeep aficionados would gag if a gaggle of staid minivans joined the rowdy family. But what about selling the minivan lineup to GM? The last competitive minivan that GM fielded was the . . . well, there never was one. In fact, Chrysler's minivans are the one part of the product portfolio GM could use the most. A fanciful idea, perhaps. But Detroit could use a few of those.


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Chrysler News-What is the best scenario for Chrysler Workers?

Well the fears for Chrysler workers maybe coming true. GM Doesn't have the money right away to acquire Chrysler and has placed the merger on hold for the short term, so Cerberus is looking to sell the company in pieces.

From auto reports around the globe, the GM Chrysler Merger may be a better scenario for workers instead of parting it out. Analyst believe that Cerberus may have difficulty selling all the divisions or car lines of Chrysler. The Jeep line maybe the easiest to sell, but what does Cerberus do if it can't sell the rest?

Automotive reports have Hyundai Motors interested in the Jeep lineup and at one time Nissan was the front runner for the Dodge Pickup line. But current reports say Nissan just wants alliances and probably wouldn't want to spend billions purchasing Dodge.

The only vehicles of Chrysler that seem to have any interest from other companies are the: Jeep line, Mini-vans and Dodge Ram.

What are the options for Cerberus? What is their time table? and how much money can they stomach losing as they sit idle?

Maybe the best scenario would be taking Chrysler public and buying out Cerberus to save 66,000 jobs!


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