Auto Task Force Saved Chrysler-Now Fiat Takes Control

Fiat takes the wheel at troubled Chrysler
The Associated Press

DETROIT — Italy’s Fiat is the new owner of most of Chrysler’s assets, closing a deal Wednesday that saves the troubled U.S. automaker from liquidation and places a new company in the hands of Fiat’s CEO.

The deal clears the way for a new, leaner Chrysler Group LLC to emerge from bankruptcy protection minus billions in debt, 789 underperforming dealerships and burdensome labour costs that nearly sank the storied automaker.

Fiat CEO Sergio Marchionne immediately was named CEO of the new company, which said in a statement that it would soon reopen Chrysler factories in the United States and Canada that were idled during the bankruptcy process, costing the automaker US$100 million per day.

The new company will focus on smaller vehicles, areas in which Chrysler was weak.

"Work is already under way on developing new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler’s hallmark going forward," the new company said in a statement.

The Italian automaker won’t put any money into the deal but will give Chrysler billions of dollars worth of small car and engine technology.

"We intend to build on Chrysler’s culture of innovation and Fiat’s complementary technology and expertise to expand Chrysler’s product portfolio both in North America and overseas," Marchionne said in a statement.

The Chrysler restructuring involved billions of dollars in financial aid from the U.S., Canadian and Ontario governments as well as labour, pension and other cost concessions from the United Auto Workers and Canadian Auto Workers unions.

In Ottawa, Canadian Industry Minister Tony Clement welcomed the sale and emergence of Chrysler from bankruptcy restructuring "in a timely and efficient manner."

"The government of Canada is confident that we will see a competitive Chrysler Canada Inc. that will produce and sell Canadian-made cars and will continue to play an important role in the company’s North American operations," Clement said in a release.

"A restructured Chrysler is good news for the Canadian auto parts supply chain and for Canadian consumers. The company can now focus on producing top quality vehicles that consumers want.

"Moving forward, the government of Canada will continue to work toward strengthening our country’s auto industry, while exercising rigorous oversight over the use of taxpayer money."

The sale to Fiat SpA marks a victory for the Obama administration, which shepherded Chrysler into bankruptcy protection April 30 with the hope that the company would emerge in a matter of months with a new partner.

Marchionne immediately made management changes, including the appointment of vice-chairman and president Jim Press as deputy CEO and adviser to help with the management transition.

Press, formerly top U.S. executive for Toyota Motor Corp., joined Chrysler shortly after it was taken over in 2007 by private equity firm Cerberus Capital Management LP.

In a statement, Marchionne said the organization will be designed to give leaders broad control and increase the speed of decision making.

Chrysler CEO Bob Nardelli bid employees farewell in an email obtained by The Associated Press, while vice-chairman Tom LaSorda already has retired.

Marchionne, in an email to Chrysler employees Wednesday, expressed confidence that Fiat will be able to turn Chrysler around.

He wrote that he stepped into a similar situation five years ago at Fiat, which at the time was perceived as a failing, bureaucratic automaker that made low-quality cars.

Yet most of the people capable of remaking Fiat were there all the time, he wrote.

"We have remade Fiat into a profitable company that produces some of the most popular, reliable and environmentally friendly cars in the world," he wrote.

"We created a far more efficient company while investing heavily in our technologies and platforms. And, importantly, we created a culture where everyone is expected to lead. We can and will accomplish the same results here."

On Tuesday, Chrysler won its battle to erase its secured debt after the Supreme Court declined to rule on objections to the sale to Fiat from a trio of Indiana pension and construction funds.

The Indiana funds, which hold less than one per cent of Chrysler’s US$6.9 billion in secured debt, claimed the sale unfairly favours Chrysler’s unsecured stakeholders such as the union ahead of secured debtholders like themselves.

Supreme Court Justice Ruth Bader Ginsburg decided Monday to delay the sale while studying the appeals.

But on Tuesday, the court turned down the opponents’ last-ditch bid by declining a hearing on the appeals.

Also on Tuesday, Judge Arthur Gonzales approved Chrysler’s motion to terminate 789 of its dealer franchises, or about 25 per cent of its dealer base.

Many of those dealers closed their doors for good on Tuesday, though some will continue to sell used cars or other brands.

Chrysler has maintained that the closures are a necessary part of its plan to cut costs.

Press told a Senate committee that the poor performance of many of the dealers slated to lose franchises costs the company $1.5 billion in lost sales each year, along with $150 million in advertising and marketing costs and $33 million in administrative costs.

The dealers had argued that they cover their own costs and little would be gained by terminating their franchises.

Chrysler lawyers said the automaker would extend until Monday its program to help the affected dealers send any unsold vehicles to stores that will remain open.

Chrysler’s swift passage through about five weeks of bankruptcy proceedings was helped by the involvement of the Obama administration’s auto task force, which provided billions in financing and helped negotiate a deal with the company’s stakeholders.

Under the agreement brokered in the days leading up to Chrysler’s Chapter 11 filing, Fiat will receive up to a 35 per cent stake in the automaker in exchange for sharing the technology Chrysler needs to create smaller, more fuel-efficient vehicles.

The United Auto Workers union will get a 55 per cent stake that will be used to fund its retiree health care obligations, while the U.S. and Canadian governments will receive a combined 10 per cent stake.

Auto Task Force-Obama To Announce-Chrysler to file for bankruptcy

Chrysler to file for bankruptcy

WASHINGTON – Chrysler will file for bankruptcy after talks with a small group of creditors crumbled just a day before a government deadline for the automaker to come up with a restructuring plan, two administration officials said Thursday.

The Obama administration had long hoped to stave off bankruptcy for Chrysler LLC, but it became clear that a holdout group wouldn't budge on proposals to reduce Chrysler's $6.9 billion in secured debt, according to the officials, who spoke on condition of anonymity because the filing plans are not public. Clearing those debts was a needed step for Chrysler restructure by the Thursday night deadline.

Bankruptcy doesn't mean the nation's third largest automaker will shut down. And the privately-held Chrysler is expected to sign a partnership agreement with the Italian company Fiat as early as Thursday as part of its restructuring plan. A Chapter 11 bankruptcy filing would allow a judge to decide how much the company's creditors would get.

President Barack Obama is expected to discuss the nation's auto sector at noon Eastern.

The Treasury Department's auto task force has been racing in the past week to clear the major hurdles that prevented Chrysler from coming up with a viable plan to survive the economic crisis ravaging nation's automakers.

Along with the Fiat deal, the United Auto Workers ratified a cost-cutting pact Wednesday night. Treasury reached a deal earlier this week with four banks that hold the majority of Chrsyler's debt in return for $2 billion in cash.

But the administration said about 40 hedge funds that hold roughly 30 percent of that debt also needed to sign on for the deal to go through. Those creditors said the proposal was unfair and were holding out for a better deal.

"While the administration was willing to give the holdout creditors a final opportunity to do the right thing, the agreement of all other key stakeholders ensured that no hedge fund could have a veto over Chrysler's future success," said one of the administration officials.

A third person briefed on Wednesday night's events said the Treasury Department and the four banks tried to persuade the hedge funds to take a sweetened deal of $2.25 billion in cash. But in the end, this person said most thought they could recover more if Chrysler went into bankruptcy and some of its assets were sold to satisfy creditors. This person asked not to be identified because details of the negotiations have not been made public.

When it files for bankruptcy, Chrysler would continue operating and Fiat would still sign on as a partner on Thursday, the people said. The government already has promised to back Chrysler's warranties in an effort to allay customers' fears that the automaker wouldn't be around to honor them.

President Barack Obama's auto task force in March rejected Chrysler's restructuring plan and gave it 30 days to make another effort, including a tie-up with Fiat. The company has borrowed $4 billion from the federal government and needs billions more to keep operating. President Obama said Wednesday night while the lender talks were still ongoing that he was "very hopeful" that deals can be worked out to keep Chrysler LLC a viable automaker, and more hopeful than he was a month ago that the company will stay in business.

The UAW agreement, which would take effect May 4, meets Treasury requirements for continued loans to Chrysler Corp., and includes commitments from Fiat to manufacture a new small car in one of Chrysler's U.S. facilities and to share key technology with Chrysler.

Meanwhile, the Fiat partnership means Chrysler CEO Robert Nardelli could be out of a job. In an April e-mail to employees, he said that if the deal is completed, Chrysler would be run by a new board appointed by the government and Fiat. The new board, Nardelli wrote, would pick a CEO "with Fiat's concurrence."

Sergio Marchionne, CEO of the Italian automaker, told reporters earlier this month that he could run Chrysler. Obama said Wednesday that Fiat's management "has actually done a good job transforming their industry."

Krisher reported from Detroit. Associated Press Writers Ben Feller in Washington, Colleen Barry in Milan, Italy, Kimberly S. Johnson in Detroit and David Eggert in Lansing, Michigan, contributed to this report.

Obama praises autoworkers,says Chrysler deal uncertain

President Barack Obama said today he did not know whether a deal preventing a collapse of Chrysler LLC would be done before Thursday's deadline, and praised American autoworkers for their sacrifices to the industry's survival.

Speaking at a town hall meeting in Missouri marking his 100th day in office, Obama said his auto task force sent Chrysler and General Motors Corp. back to redo their business plans because their initial sustainability plans were not realistic. GM has until June 1 to deliver its new plan.

As for Chrysler: “We don’t know yet whether the deal is going to get done.”


Chrysler and the administration reached an agreement with large Chrysler debt holders to swap $6.9 billion in secured debt for $2 billion in cash. But 40-odd investment firms and hedge funds have to agree in unison to the swap, or the government will take Chrysler to bankruptcy court to force it into place.

Chrysler must also complete a deal with Fiat S.p.A., which appears close at hand.....More

Auto Task Force-GM to shed 23,000 jobs, kill Pontiac brand

WASHINGTON – General Motors Corp. will cut an additional 7,000 to 8,000 factory jobs in the United States, kill the Pontiac brand and shed 2,600 dealers by 2010 under a revised business plan developed under the Obama administration's eye.

The plan, along with an offer to bondholders to exchange $27 billion in GM debt for about 10% of a reconstituted GM and a small amount of cash, makes clear that the automaker's fate over the next few weeks rests with President Barack Obama. His auto task force set the terms of the bond deal and the goal of having 90% of the debt exchanged, and the U.S. government would become GM's majority shareholder if the plan succeeds.

GM Chief Executive Officer Fritz Henderson warned today that should the exchange not meet the task force's target, GM would file for bankruptcy on or before June 1. To succeed, GM will need thousands of GM debtholders to agree -- from individuals to some of the largest investors in the world -- by May 26.

"It's not impossible, but it’s a tough task," Henderson said, adding: "If we were to materially fall short, we would fall into a bankruptcy process."

As part of the debt offer, GM said, the administration would consider converting 50% of its loans to the company into GM stock. Combined with a similar request to the UAW for converting half of the $20 billion owed to a retiree health-care trust to shares, the plan envisions the government owning at least 50% of a reconstituted GM and the union holding about 39%.

Obama's auto task force said in a statement today that GM’s offer was an “important step,” but noted that its concessions hinge on bondholders and the UAW agreeing as well.

“We will continue to work with GM's management as it refines and finalizes this plan and with all of GM's stakeholders to help GM restructure consistent with the president’s commitment to a strong, vibrant American auto industry,” the task force said.


The new plan Henderson unveiled would get GM to profits in a U.S. market of 10 million vehicles -- a far lower rate than GM imagined just a couple of months ago. Should the debt swap succeed, GM will cut its debt by $44 billion and its structural costs by 25% by 2010.

"The objective here is not to survive, the objective is to develop an operating plan that allows us to win," Henderson said.

The new job cuts bring the total number of hourly jobs eliminated under GM’s plan to 21,000 by 2010 and 23,000 by 2011. GM said additional cuts among salaried workers would be expected, but did not give a specific target. As it had indicated earlier this month, GM now plans to close 13 plants by 2010 and an additional five plants by 2012.

Henderson said the Pontiac brand would be closed by 2010, calling it an “extremely personal decision.” In addition to speeding up decisions on Saturn, Saab and Hummer, GM will be left with four brands – Chevrolet, Buick, GMC and Cadillac.

He said while talks continue on Saab and Hummer, there was no deal on the table yet for Saturn that would allow GM to keep building those models beyond this year.

GM said it now expects it will need $27 billion in total from the Treasury to withstand the recession, including the $15.4 billion it's already received. That includes $2.6 billion it will need this quarter and an additional $9 billion after that, some of which includes the cost of deeper job cuts and plant closings.

Henderson said dealers targeted for closing would begin hearing from GM in a matter of weeks. Dealers have been apprehensive about a GM bankruptcy, but it's not clear how quickly GM could close outlets given a bevy of state laws protecting dealers.

Through the cuts in brands and models, GM will shed 14 models through 2010, although the Chevrolet Volt electric car remains on track for a 2010 launch.

Will The Auto Task Force Have A Sit On Chrysler's New Board?

Chrysler and potential partner Fiat are discussing a new management and board for the U.S. automaker under a proposed alliance that could see Fiat take a stake in Chrysler, Automotive News reported on Monday.

Chrysler is racing to complete a partnership with the Italian automaker by April 30, with the Obama administration warning the alternative would be bankruptcy.

The two automakers are discussing a new seven-member board for Chrysler that would include representatives from Fiat and possibly President Barack Obama’s automotive task force overseeing the restructuring of the auto industry, Automotive News reported, citing sources close to the negotiations.

Government Auto Task Force May Split Up Chrysler's Equity

Instead of Cerberus Capital Management and Daimler AG holding 80.1% and 19.9%, respectively, of Chrysler LLC, there will be a larger cast.

Under the latest scenario proposed by the U.S. government, Fiat SpA will have the largest block of Chrysler, at 20%. The remaining 80% will be allocated among a variety of secured creditors that include at least five banks and U.S. taxpayers.

Cerberus and Daimler likely will hold much smaller stakes because they still hold loans that helped finance the August 2007 acquisition of the Auburn Hills-based automaker.

Even the UAW could end up owning a piece of the company.

"They are trying to trade debt for equity among the current creditors," said Tom Stallkamp, a former DaimlerChrysler vice chairman and president. He is now a partner in Ripplewood Holdings LLC, a private equity fund. "It's all based on how much of a haircut the debt holders will accept."

Coincidentally, those debt holders include some of the giant banks -- J.P. Morgan Chase, Citicorp, Morgan Stanley and Goldman Sachs -- that auto industry advocates argue have benefitted from a double standard in how they accounted for government loans.

Debt-for-equity talks
There are three levels of Chrysler debt secured by such assets as manufacturing plants, equipment, vehicles, parts and real estate. The first level, valued by Chrysler at $6.9 billion, was borrowed from the banks. The second is $2 billion borrowed from Daimler ($1.5 billion) and Cerberus ($500 million). The third is the $4.3 billion in government loans committed in December and January.

If Chrysler were to file for bankruptcy, the banks would be first in line to sell assets, followed by Cerberus and Daimler, and finally the federal government.

"This is the worst possible time to be selling an auto plant," said Shelly Lombard, a credit analyst with Gimme Credit in New York.

Chrysler, Fiat and President Barack Obama's auto task force are working hard to avoid that outcome. To succeed, they must secure breakthrough agreements with the banks and the UAW. Then, the task force has said it would release up to $6 billion more to fund Chrysler's operations.


Unlike GM, which is dealing primarily with bondholders, Chrysler's debt is owed to banks and the government. Some of the bank loans have been sold to hedge funds and other investors. "It's hard to know who bought what, even with bonds, and it's harder still with bank loans," Lombard said.


One of the banks likely will act as an agent for the hedge funds. Then, the task force leaders, Steven Rattner and Ron Bloom, will negotiate for a settlement that offers the banks a fraction of the loans' face value in exchange for shares in the new Chrysler.

Challenges ahead
Fiat so far has not offered cash and has said it will not assume any current debt to partner with Chrysler. While Chrysler has valued Fiat's vehicles and powertrain technology at $8 billion to $10 billion, that won't likely satisfy the banks.

"Fiat is in many ways a reasonable long-term solution," said Craig Fitzgerald of Plante & Moran. "The big question is will $6 billion more from taxpayers be enough to fund Chrysler's turnaround."

The challenge with the UAW is to find a non-cash method to cover half of $10.6 billion Chrysler owes in 2010 to the Voluntary Employee Beneficiary Association, or VEBA, trust fund. The trust was created to cover health care insurance for UAW retirees.

If Fiat doesn't offer cash or its own stock, Chrysler may offer the union stock in the new company. Such a deal would save $5.3 billion, which could be enough to satisfy Obama's demand for more concessions, and bring the UAW into partnership with banks, taxpayers, Cerberus and Fiat.....More

Obama and Auto Task Force Say there will be Major Restructuring coming to GM and Chrysler

Obama on autos: Aid ahead but at a price

GM, Chrysler updating plans for revival

WASHINGTON -- Heading toward Monday's announcement of his plans to help Detroit's auto industry, President Barack Obama said Thursday that the carmakers would need to make painful changes to get more federal help.

I think it is appropriate for us to say, 'are there ways for us to provide help to the U.S. auto industry to get through this very difficult time?' " he said during an online question-and-answer session. "But the price is you've got to finally restructure to deal with these long-standing problems.
"That means that everybody's going to have to give a little bit -- shareholders, workers, creditors, suppliers, dealers -- everybody is going to have to recognize that the current model, economic model of the U.S. auto industry is unsustainable."


His task force is expected to unveil a framework Monday that sets new terms for General Motors Corp. and Chrysler LLC to get more federal help beyond the $17.4 billion in loans they already have.


While noting the credit crisis and a sales slump that may reach new lows in March, Obama also revived criticisms of the industry he made in a 2007 speech to the Detroit Economic Club. He chastised the car companies for mismanagement, and said they could not rely on gas-guzzling SUVs as their sole source of profits.


"If they're not willing to make the changes," he said, "then I'm not willing to have taxpayer money chase after bad money."

Meanwhile, GM and Chrysler are preparing updates to their turnaround plans in the face of ever-worsening U.S. sales.

On Thursday, two forecasters pegged March's auto sales at annual rates below 10 million vehicles, the worst-case scenarios envisioned by the automakers.

Lowering their sales and production forecasts would raise the chances of even-deeper cuts, following GM's announcement Thursday that about 7,500 UAW workers agreed to buyouts and early retirements.

Here's a look at where their turnaround plans stand:

Workers
Chrysler, GM

• The UAW tentatively has agreed to end the so-called jobs bank, which pays laid-off workers most of their regular pay. The union also has made other unannounced concessions. Talks continue on replacing some cash payments the companies were to make for what the union's retiree health care trust is owed with company stock....More

Auto Task Force Set to Back More Loans -- With Strings

Latest Report on the Auto Task Force From The Wall Street Journal

By NEIL KING JR. and JOHN D. STOLL
President Barack Obama last month handed his auto-industry team a seemingly impossible task: to engineer the most complicated industrial restructuring ever attempted by the federal government, and to do it fast.

With almost no experience in the car business, the team's dozen core members have undergone a crash course in the myriad woes plaguing the U.S. auto industry. Within days, just over a month after setting to work, they'll begin announcing decisions.

Interviews with task-force members indicate that the administration doesn't want to let General Motors Corp. and Chrysler LLC slip into bankruptcy protection, a course advocated by some critics of the industry. Instead, the task force is expected to say that it sees viable futures for both GM and Chrysler, but only if there are sacrifices from their managements, unions and GM's bondholders. The team will also lay out a firm timeline for action.

The government is prepared to lend the companies more money. The two companies have requested $22 billion more -- including $9 billion for the second quarter. But the task force may not disburse new aid immediately, choosing instead to preserve that as leverage.

Hanging in the balance are the jobs of 140,000 GM and Chrysler employees, more than 10,000 dealerships across the country, and a large swath of the industrial base in the Midwest.

On Wednesday, the task force met with officials from Chrysler and Italy's Fiat SpA and indicated it is still interested in seeing the two companies form an alliance, as the companies have proposed, according to two people who attended the meeting.

It's clear the team is not yet ready to put forward a comprehensive fix. "It's a steep learning curve that they've been climbing, and there is still a lot to do," said Michigan Rep. Gary Peters, whose district in suburban Detroit houses hundreds of auto suppliers, a few days after meeting with the task force. "That's why I suspect they'll come out with some preliminary statements, and then get back to work."

In session after session in a warren of offices at the Treasury Department, the team has sat through tutorials on dealer financing, studied basic data and debated the future of U.S. car sales. They have spent days trying to understand the complexities of the hundreds of companies that supply the car companies with axles, seats and other parts......More

Auto Task Force Wants To See Viability

From The Detroit Free Press

General Motors Corp. began white-collar layoffs today, telling about 160 workers at the Warren Technical Center that their last day will be April 1.

The move is just the beginning of GM’s plans to cut 3,400 salaried jobs in the United States this year. Worldwide, GM plans to cut 47,000 workers by the end of the year.

The job cuts are part of GM’s sweeping restructuring efforts to make the company viable....More

Bailout plan from Auto Task Force may be stricter than GM, Chrysler expected

By Sharon Silke Carty, USA TODAY
DETROIT — The Treasury Department will announce this week a preliminary plan to help General Motors and Chrysler that sets goals and deadlines that could be more ambitious than the companies themselves have proposed, according to a Capitol Hill staffer briefed on the plan but who wished to remain anonymous because the proposal is not yet public.
Treasury's preliminary plan also could include a bridge loan to Chrysler that's less than the $5 billion the automaker wants, the staffer said. Treasury says details still are being finalized.

A more structured version of the plan will be detailed in April, when additional loan money could become available to the two troubled companies.

The Bush administration in December set a deadline of March 31 for the automakers to prove they would be viable with the help of emergency government loans. But since then, the car market has hit the skids, and both GM and Chrysler have said they need even more money to survive.

GM and Chrysler are operating on a combined $17.4 billion in government loans approved by the Bush administration. The two automakers have asked the Obama administration for another $21.6 billion and say they need it soon.

The president's auto task force is demanding that the car companies get significant concessions first.

GM bondholders are balking at swapping two-thirds of their GM debt for stakes in the company.

Bondholders warned the government this weekend that if they can't strike a deal with the automaker, the car company might be forced into bankruptcy. A group representing bondholders says many are not willing to take stock in place of bonds because they don't believe GM will be survive long enough to make the shares valuable.

That would result in "dire consequences for the company, the tens of thousands of hard-working Americans that GM employs and the economy as a whole," bondholder advisers from investment firm Houlihan Lokey wrote.

And although the United Auto Workers, which represents U.S. hourly workers, has agreed to concessions, the Canadian Auto Workers union hasn't reached an agreement with Chrysler.

Chrysler says that if it cannot get nearly $16 an hour in wage and benefit concessions from the CAW, as well as a guarantee of $2.3 billion in loans from Canadian governments and a break on a tax dispute with Ottawa, it might have to pull out of Canada, the Associated Press reported Monday.

Canada's the source of Chrysler's U.S.-market minivans and line of big sedans that includes the Chrysler 300 and Dodge Charger.

Buy Auto Task Force.Com---Domain Names

US Auto Task Force Digs In For Long-Term Role

Latest on the Auto Task Force!

WASHINGTON -(Dow Jones)- The Obama administration is digging in for a longer period of oversight of the auto industry than previously thought, recent actions indicate, reflecting the complexity of its task as well as the enormous political risks involved.

On Thursday, the Treasury Department sent auto-parts suppliers a $5 billion lifeline in a move the administration characterized as the "first piece" of its plans for the industry.

And though the department's auto task force has said to possibly expect an announcement next week on bailout requests by General Motors Corp. (GM) and Chrysler LLC, it has cautioned that any such announcement wouldn't be its final word on the sector.

Adding to the sense of a long-term engagement by the government, the Treasury's chief auto adviser said Friday those companies may need " considerably" more aid beyond their current requests of up to a combined $21.6 billion in new loans.

"It could be considerably higher, I won't deny that," the adviser, Steven Rattner, said on Bloomberg Television in an interview that was scheduled to air Friday.

Industry observers have been anticipating March 31 as a sort of D-Day for the industry, with the government releasing its findings on GM and Chrysler, including whether the companies should receive more aid or be pushed into bankruptcy court.

But a task force member, briefing reporters on condition of anonymity this week because he wasn't authorized to speak on the record, attempted to tamp down the expectation of a wholesale, one-shot bailout, instead suggesting a longer, more drawn-out process.

The adviser said the task force would continue to meet with stakeholders of GM and Chrysler - including bondholders, dealers, union leaders and company executives - and closely monitor the industry, with more action as circumstances dictate. Such an approach could differ from the government's last intervention in the sector - the 1979-80 bailout of Chrysler Corp. - and massive bank bailouts during the current economic crisis.

"I think the approach reflects the inherent complexity of this industry that's been built up over the last century," GM spokesman Greg Martin said, referring in part to an intertwined supplier network that serves both healthy and ailing auto makers as well as the dynamic between the union and companies dating back decades.

Rep. Candice Miller, R-Mich., said the task force appears to grasp the nuances of the industry's problems, an understanding that she said was missing in debates in Congress late last year.

The task force's deliberative approach fits into that understanding, she said.

"I don't think we should just be absolutely tied to a March 31 deadline, and I mentioned that" to task force members, said Miller, who along with other U.S. lawmakers met with the task force this week. "I'm not one that advocates we have to have everything determined by March 31. I'm glad that [they're] being very deliberative."

But the task force's approach also reflects the sensitivity to many interests needed to restructure the companies - a political balancing act that requires appeasing powerful groups, including the United Auto Workers, debt holders, dealers and the companies themselves.

Sage Eastman, an aide to Rep. Dave Camp, R-Mich., questioned whether the lengthy time involved in restructuring the industry is owing more to practical difficulties, "or is it that the solutions are politically difficult? .. Did the politics complicate the solutions.

"You could probably get a bunch of experts and economists around the table and say, 'Here's what it's going to look like,'" Eastman added. But taking many of those steps would be politically difficult.

Such difficulties were on display this week when the UAW's chief lobbyist sent a letter to U.S. lawmakers accusing bondholders and other lenders to GM and Chrysler of stalling a debt-swap deal needed to win more federal aid.

In the interview with Bloomberg TV, Rattner said bondholders needed to become more "constructive" in debt negotiations.

GM bondholders, Rattner said, "are looking to the government to help them solve their problem. The government cannot solve everybody's problems, and we need for the bondholders to become part of this in a constructive way."

GM has said it expects to reach deals with the bondholders and the UAW before March 31. Chrysler also has said it expects to have its final restructuring plan in place by then. The Treasury has the option to extend that deadline by one month under the terms of loans GM and Chrysler already have received.

In his interview, Rattner said he may impose a deadline on GM bondholders and the UAW to come up with deals on concessions. "Part of why there's a lack of appearance of movement is nobody wants to go first," he said.

-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; joshua.mitchell@ dowjones.com

Nardelli Tells Auto Task Force Chrysler Needs More Money

Chrysler CEO Bob Nardelli called Tuesday for a second round of funding for the company's financial arm that would enable sales to customers who otherwise can't qualify for loans.

In an interview with CNBC, Nardelli also said Fiat would assume 35% of Chrysler's debt if the U.S. Treasury Department approves its proposed alliance with the Italian automaker.

Chrysler is operating with $4 billion in loans, and it's seeking $5 billion more.

But in the CNBC interview, Nardelli emphasized the effectiveness of a separate $1.5-billion loan the Treasury made to Chrysler Financial in January. Chrysler used that loan to subsidize zero-percent loans on new vehicles...More

Chrysler CEO encouraged by task force progress

Chrysler LLC Chief Executive Bob Nardelli said Tuesday that he's encouraged by the focus of President Barack Obama's auto industry task force on job preservation, but he added that all options for Chrysler are still being considered.

Nardelli said during an appearance on cable network CNBC that the task force hasn't told him that a bankruptcy protection filing at Chrysler is out of the question.

"No they haven't said that," Nardelli said. "What they have said is that they're very intent on preserving, you know, 40,000 or 50,000 direct jobs."

Nardelli said it's crucial that Chrysler get some kind of an indication by March 31 as to if its request for $5 billion in federal aid will be granted, adding that the denial of the aid would be "devastating" for the automaker.

Steven Rattner, a top adviser to the task force, said in an interview with The Associated Press on Monday that the task force was trying to successfully restructure the auto makers during a difficult economic downturn....More

Barack Obama’s auto task force is open to auto aid!

WASHINGTON—President Barack Obama’s auto task force is “open minded” about giving car companies additional aid and will use “all the resources” of the federal government to achieve agreements that avoid bankruptcy, said Steven Rattner, the US Treasury’s chief auto adviser.

US auto suppliers may get some aid, and the task force plans to meet a March 31 deadline for assessing General Motors Corp. and Chrysler Llc. viability, Rattner said in an interview. “We are open-minded about committing additional resources to ensuring a viable domestic car industry,” he said.

“We will bring all the resources of the government to bear on these various stakeholders and try to reach a fair compromise, a set of compromises,” Rattner said. He added, “Bankruptcy is not our goal nor a desirable outcome. Our goal is to end up with viable car companies.”

GM and Chrysler, surviving on $17.4 billion in US aid, have requested as much as $21.6 billion in additional government loans. Obama’s auto task force is assessing the automaker proposals as it recommends whether to supply additional aid or tip the car companies into bankruptcy.

“We’re not going to simply hand out dollar bills on Pennsylvania Avenue,” he said, adding that stakeholders might sense “the government will end up solving all problems, and it’s just not going to happen here.”

On Monday GM’s chief executive Richard Wagoner met with the task force in Washington, a person familiar with the matter said.

Wagoner also planned a session with German Economy Minister Karl-Theodor zu Guttenberg later that day, according to a statement released by the German Embassy. The meeting will be about GM and its European subsidiaries, including Opel, Ulrich Sante, a German Embassy spokesman, said in an interview.

Wagoner is being joined at the meetings by chief operating officer Fritz Henderson, according to the person, who requested anonymity because the sessions are private. The task force gathering was to discuss GM’s efforts to reduce costs and restore profit, said the person, who declined to be more specific.

Information was exchanged in the meeting, and no decisions were made, the person said.

Austan Goolsbee, an Obama task force member who was asked about the GM session on Bloomberg Television, said he wouldn’t talk about details of what happens in auto meetings.

“The President’s been totally clear that he’s committed to supporting American industry,” Goolsbee, a member of the White House Council of Economic Advisers, said in the interview. “Anybody who wants money from the US government, it’s got to be a bridge to somewhere, not a bridge to nowhere.”

Treasury Secretary Timothy Geithner and National Economic Council director Lawrence Summers lead the task force, which will help decide to supply more aid or tip the automaker into bankruptcy. (Bloomberg)...More
Buy Auto Task Force---AutoTaskForce.Com,Net,Org and .Info----Make An Offer

Auto Task Force: Not Looking to Bankruptcy

President Barack Obama's automotive task force is focused on solving the industry's problems outside of bankruptcy and will likely continue to provide funding long after a pending March 31 deadline, the group's lead adviser told the Detroit Free Press.

Bankruptcy is not our goal," Steven Rattner said in a the newspaper inteview published Monday. "I've been in and around bankruptcy for 26 years as part of my private-sector work. It is never a good outcome for any company, and it's never a first choice."

Rattner also said the panel was committed to meeting the March 31 deadlines specified in loan deals with General Motors(GM Quote - Cramer on GM - Stock Picks) and Chrysler, but decisions on further aid could come later.

"It's entirely possible, in fact I think it's more than likely, that what you will see is not a single announcement at a point in time that's the beginning of the end of our policy efforts for the auto industry, but rather a series of actions over perhaps a reasonably long period of time to solve this problem," he said.

Additionally, Rattner said the task force is seeking ways to help auto- company suppliers survive....More

Is GM Reacting To The Auto Task Force Visit-it doesn't need $2B

GM says it doesn't need $2B from gov't in March

DETROIT – General Motors Corp.'s chief financial officer says the company will not need the $2 billion loan installment for March that it requested from the U.S. government in February.

CFO Ray Young said Thursday in an interview with The Associated Press that GM told the Obama administration it won't need the money so soon because its cost cuts are starting to take hold.

GM borrowed $13.4 billion from the government earlier this year. Last month, it said it would need up to an additional $16.6 billion to keep operating, including $2 billion in March and $2.6 billion in April.

Young would not say when the company will need more government loans or whether it would reduce its total financing request.

The Auto Task Force Invites Foreign Automaker Toyota For Talks!

Great The Auto Task Force Is Meeting With The Foreign Auto Powerhouse Toyota! Lookout Tax Payers...Your Government Will Be Sending more tax dollars overseas!

Reported by MSNBC

Jim Lentz, President of Toyota Motor Sales in the US, will be meeting with the task force at the White House, reports MSNBC.

Both parties say that the meeting is to “talk” and “exchange views.” Whatever the reason, we find it more than appropriate. There is nothing wrong with meeting with the competition, so to speak, to find out more about the industry and help shape ideas that can make our domestic automakers more competitive.

Moreover, the panel is reaching out to all segments of the auto industry. They have been meeting with automakers, dealers, politicians and other auto industry leaders. We say kudos to that!

Auto Task Force Members Test Drive Chevy Volt

Well What did the Auto Task Force Think? Has anyone seen an interview with the " Auto Task Force"?

Auto Task Force Members to Test Drive Chevy Volt

Task force members will begin their day with a tour of GM's sprawling tech center, followed by a tour of Chrysler's nearby Warren Truck plant, where the new Dodge Ram pickup is put together.

WASHINGTON -- Members of the Obama administration's autos task force will test drive the Chevrolet Volt rechargeable electric car and tour a Chrysler LLC pickup truck factory when they visit the Detroit area on Monday, an administration official said Sunday.

Task force members, led by Wall Street financier Steven Rattner and Steelworkers union official Ron Bloom, also will meet with United Auto Workers President Ron Gettelfinger and other top union officials, and they will sit down with senior General Motors Corp. and Chrysler executives, said the official, who asked not to be identified because the schedule has not been made public.

GM and Chrysler are living on $17.4 billion in government loans approved by the Bush administration last year, and they have asked for a total of $39 billion. Obama appointed the task force to review the automakers' viability plans and decide if they should get additional aid....More

Auto Task Force Meets With Fiat SpA Chief Executive Officer About Chrysler Deal

Reported from Bloomberg.Com

Bloomberg-- U.S. Treasury advisers Ron Bloom and Steven Rattner spent most of a 2.5 hour meeting with Fiat SpA Chief Executive Officer Sergio Marchionne talking about his plan to take a 35 percent stake in Chrysler, a person briefed on the meeting said.

Members of Barack Obama’s auto task force are meeting with automakers, suppliers, debtholders, labor leaders and other stakeholders to determine whether they should give additional aid from the Troubled Asset Relief Program to help the industry. GM, Chrysler and their finance companies have already been granted $24.9 billion in TARP loans and are seeking as much as $21.6 billion more.

To contact the reporter on this story: Jeff Green in Detroit at jgreen16@bloomberg.net

Auto Task Force Views The New Dodge Ram Hybrid

Word is the Auto Task Force got a chance to view the New Dodge Ram Hybrid. The All New Dodge Ram Gets great reviews and will be the First In Class Hybrid.


A Boston Herald Review of the Dodge Ram
Ewe will love the new Dodge Ram
Popular pickup truck gets long-anticipated redesign

With all of the bad news surrounding U.S. automakers these days, it’s good when models like the all-new 2009 Dodge Ram remind us that Detroit can still do some things right.

After all, the long-awaited new Ram (base price: $21,270) boasts the styling flair and innovation that have always distinguished the best vehicle designs from Dodge parent Chrysler.

To keep current Ram aficionados happy and win over new ones, Dodge made the 2009 Ram more useful and comfortable than ever.

I recently tested a near top-of-the-line Ram: A $45,520 Laramie Crew Cab with automatic transmission, rear-wheel drive and a 390-horsepower 5.7-liter Hemi V-8 engine. (Like most pickups, the Ram comes in a bewildering array of different cab sizes, bed lengths, etc.)

On the outside, the Ram combines bold styling with fuel-saving aerodynamic tweaks.

In front, the model’s bulging hood and forward-leaning grille are oddly reminiscent of the Chevrolet Corvette Mako Shark concept car.

In back, a flowing lip on the tailgate gives the pickup truck’s rear area a modern appearance.

Inside, the Ram’s interior is truly extraordinary. It’s packed with more features, room and comfort than you’d find in many upscale sedans.

For instance, my test Ram came standard with a heated steering wheel and heated/cooled front seats.

The model also included a great set of four storage bins: Two under the rear-seat floor and two built into the rear fenders.

Called “RamBoxes,” these optional bins ($1,895) are like saddlebags on a horse: They increase your ability to carry stuff by using previously wasted space.

The lockable, drainable fender RamBoxes provide 7.4 cubic feet of storage space - plenty of room for tools, fishing gear or up to 120 12-ounce cans on ice. (The two underfloor compartments can hold an additional 20 12-ounce cans between them.)

My test Ram also came with a great optional rear-seat entertainment system ($1,695) that offers a DVD screen and three channels of kid-friendly TV from Sirius.

On the road, the Ram is impressive.

Chrysler reworked the model’s famous Hemi V-8 engine to put out more power while burning less gas....More