White House confirms Chrysler will file for bankruptcy

[vztrt]

http://news.theage.com.au/breaking-n...0528-bo83.html

Chrysler bankruptcy ruling due soon
May 28, 2009 - 10:29AM

A US judge said after a day of hearings on Wednesday he did not expect to issue a ruling on Chrysler's fast-track bankruptcy and tie-up with Italian auto giant Fiat before Thursday.

Judge Arthur Gonzalez said after eight hours of testimony at the US Bankruptcy Court in New York that the long list of remaining witnesses meant the process could not be finished before Thursday, possibly Friday.

If he approves the fast-track plan, a new Chrysler could emerge within days, according to President Barack Obama's administration, which is spearheading the plan and providing emergency funding.

Chrysler auto dealers, many of whom face being shut down, and creditors are among opponents to the Chrysler-Fiat deal.

The developments at Chrysler are seen as critical for General Motors, which is also living off government loans and scrambling ahead of a June 1 deadline that will likely lead to a bankruptcy filing.

© 2009 AFP

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Sale of Chrysler to Fiat has been Approved.

http://news.theage.com.au/breaking-n...0601-bsvd.html

US judge approves sale of Chrysler to Fiat
June 1, 2009 - 8:29PM

A US bankruptcy judge late Sunday approved the sale of distressed US automaker Chrysler to Fiat, saying this was the only was to save the business in a ruling made available early Monday.

"The sale motion is granted in its entirety and entry into and performance under and in respect of the purchase agreement and the sale transaction is approved," judge Arthur Gonzalez wrote in his ruling.

He further added despite extensive efforts over the last two years "to seek various alliances for Chrysler, the Fiat transaction is the only option that is currently viable."

The third-biggest US automaker has declared bankruptcy and is seeking a tie-up with Fiat in a plan presented as the only way to save the company from liquidation.

Creditors, parts suppliers, dealership owners and others losing money in the bankruptcy argue that their rights have been trampled in the effort to force through the deal.

The government says a new Chrysler company could be born within days of approval for the bankruptcy.

But legal appeals were expected if Gonzalez ruled in favor, meaning possible new delays. Fiat has said it might back out if the transaction is not completed by June 15.

Thomas Lauria, an attorney for pension funds attempting to stop the bankruptcy, said the plan was "illegal" and stripped his clients of their protections as provided under bankruptcy law.

A lawyer representing some of the 789 dealers who face being shut down accused Chrysler choosing the victims in an unbusiness-like way that equated to "throwing darts at a board."

The once mighty US auto industry is reeling, prompting massive intervention by President Barack Obama's administration to prevent total collapse and a new body blow to a national economy already in recession.

Chrysler was forced to file for bankruptcy protection on April 30, then agreed to an alliance with Fiat that will initially give the Italian company a 20 percent stake.

In return, Fiat will allow access to its technology to enable the US carmaker to make the smaller, greener cars that are increasingly in demand.

The US Treasury has provided Chrysler with some nine billion US dollars in emergency aid. Fiat must repay this money if it wants to take a majority stake in the Detroit firm.

Judge Gozalez wrote that "Fiat will contribute to New Chrysler access to competitive fuel-efficient vehicle platforms, certain technology, distribution capabilities in key growth markets and substantial cost saving opportunities."

After the conclusion of the Fiat transaction, Fiat will own 20 percent of the equity of New Chrysler, with the right to acquire up to an additional 31 percent of the company, according to the ruling.

In addition to Chrysler, the government will also rescue GM with a plan could put as much as 72.5 percent of the country's biggest automaker under state ownership.

© 2009 AFP

[mcnews]

Court Approves Sale of Chrysler LLC Operations to New Company Formed with Fiat

Chrysler LLC today announced that the U.S. Bankruptcy Court, Southern District of New York, has approved its request to sell substantially all of its operations to Chrysler Group LLC, the new company formed in alliance with Fiat SpA.

“With this approval, the new Chrysler Group is created and can prepare to launch as a vibrant new company formed with Fiat,” said Robert L. Nardelli, Chairman and Chief Executive Officer of Chrysler LLC. “Through the hard work and foresight of many Chrysler stakeholders, Chrysler Group will soon begin operations with significant strategic advantages, such as a wage and benefit structure for active and retired employees that is competitive with those of transplant manufacturers; a reduction of debt and interest expense; the disposition of idle assets; a rationalised and more efficient dealer network; and sound agreements with our suppliers. While this has been an extremely difficult chapter in Chrysler’s history for all involved, the new Company and its customers, employees and suppliers can now begin on a fresh page.”

Chrysler’s Mexican, Canadian and other international operations will also be acquired by Chrysler Group.

"We are very pleased with today’s announcement and the opportunities that it brings to our company. At this stage, it is too early to comment or speculate about how the integration with Fiat might apply in Australia or New Zealand regarding all aspects of the operation including dealer body and distribution," said Gerry Jenkins, Managing Director, Chrysler Australia.

The alliance with Fiat provides Chrysler Group with access to exciting products that complement the Company’s current portfolio, technology cooperation and stronger global distribution. Work with Fiat is already well underway to develop the next generation of environmentally friendly, fuel-efficient high-quality vehicles.

These and other important steps taken over the past month will position Chrysler Group to provide customers and dealers with the high quality vehicles and service they expect, and enable the new company to become a strong competitor. Many of Chrysler’s stakeholders have worked expeditiously together to launch Chrysler Group, which will move quickly to realise the benefits of the alliance.

“We are very grateful to loyal Chrysler customers who have supported us throughout this process and assure them Chrysler Group is well prepared to produce and support quality vehicles under the Jeep®, Dodge and Chrysler brands as well as parts under the Mopar® brand,” continued Mr. Nardelli. “We also recognise the sacrifices, unstinting loyalty and enduring belief in Chrysler of many stakeholders, including Cerberus and Daimler, the UAW and CAW leadership, employees, dealers and suppliers who made critical contributions to the viability of Chrysler Group, Chrysler Financial and their efforts with GMAC to provide financing, and the energy and commitment of the U.S. Treasury, the President’s Auto Task Force, Members of Congress and representatives at the state and community level and Canadian Federal and Ontario Provincial governments in helping to move Chrysler Group forward. Without the extraordinary efforts of all these constituents, the alliance and the creation of a new Chrysler would not have been possible.”

As the Company announced previously on April 30, Mr. Nardelli, who had been leading Chrysler since August 2007, will resign from Chrysler LLC on completion of the transaction. He will return to Cerberus Capital Management LP as an advisor.

[vztrt]

Appeals Court Halts Chrysler-Fiat deal.

http://news.theage.com.au/breaking-n...0604-bw81.html

Chrysler-Fiat deal halted by court
June 4, 2009 - 9:59AM

A federal appeals court has halted Chrysler's sale of the bulk of its assets to Italy's Fiat pending an appeal by a trio of Indiana state pension and construction funds.

The US Court of Appeals for the Second Circuit said late Tuesday it will hear arguments in the case Friday afternoon in New York, according to the Indiana treasurer's office. Chrysler LLC had hoped to close the sale by the end of week, pending regulatory approval.

"We are pleased the Court of Appeals has agreed to hear our arguments," Indiana Treasurer Richard Mourdock said in a statement. "As we have stated from the beginning, Indiana retirees and Indiana taxpayers have suffered losses because of unprecedented and illegal acts of the federal government."

Chrysler has maintained that the deal with Fiat Group SpA is its only hope of avoiding selling itself off piece by piece. If the sale doesn't close by June 15, Fiat has the option of pulling out of the deal.

In addition, production at Chrysler's manufacturing plants remains halted pending the closing of the sale.

"We are pleased that the Court of Appeals is setting this schedule and has recognised the sense of urgency Chrysler has to preserve and protect its going concern value," Chrysler said in a statement released Wednesday afternoon.

"We look forward to an expeditious conclusion to this matter and to getting back to building vehicles."

The funds, which include the Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund, and the state's Major Moves Construction Fund, claimed that the deal as structured unfairly favours the interests of the company's unsecured stakeholders ahead of those of secured debt holders such as themselves.

They also challenged the constitutionality of the federal Treasury Department's use of Troubled Asset Relief Program, or TARP, funds to supply Chrysler's bankruptcy protection financing.

Late Sunday, US Judge Arthur Gonzalez, the bankruptcy judge overseeing Chrysler's case, issued a ruling approving the sale following three marathon days of testimony and arguments. Gonzalez also ruled that the funds do not have the standing to challenge the use of TARP money because they will receive their fair share of the $US2 billion ($A2.44 billion) set aside for secured debt holders, which is more than they would have received if Chrysler had liquidated.

Under the terms of the agreement, a United Auto Workers union retiree health care trust will receive a 55 per cent stake in the new company, while Fiat will get a 20 per cent stake that can increase to 35 per cent. The remaining 10 per cent of the company will be owned by the US and Canadian governments.

In the days leading up to Chrysler's bankruptcy filing, the automaker struck a deal with the majority of secured lenders to give them $US2 billion ($A2.44 billion) in cash, or 29 cents on the dollar, to erase the $US6.9 billion ($A8.41 billion) in debt. But some of the debt holders baulked and the automaker was forced to file for bankruptcy protection on April 30.

The Indiana funds hold $US42.5 million ($A51.77 million), or less than 1 per cent, of Chrysler's total $US6.9 billion ($A8.41 billion) in secured debt. They bought the debt in July 2008 for 43 cents on the dollar.

Separately on Wednesday, a hearing on Chrysler's request to terminate the franchises of 789, or about 25 per cent, of its dealers as part of its restructuring plan was pushed back by a day to Thursday because of scheduling issues.

© 2009 AP

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More on the blocking of Chrysler sale

http://www.goauto.com.au/mellor/mell...2575D0000FDAAD

Court blocks quick Chrysler sale

Chrysler litigation casts doubt on GM’s Chapter 11 plan

By IAN PORTER 9 June 2009

THE planned smooth and quick re-emergence of Chrysler from its Chapter 11 bankruptcy has been thrown into chaos after some superannuation funds challenged the terms of the Chrysler reorganisation.

A US Supreme Court judge froze the Chrysler reorganisation process, sparking concerns that the General Motors bankruptcy process may not be as quick and easy as the US government had hoped.

The decision by Justice Ruth Bader Ginsburg stayed the sale of Chrysler’s good assets to a Fiat-controlled company for an indefinite period, and frustrating the US government's desire for the court to clear the way for the Chrysler deal.

On Tuesday, the Obama administration warned that court delays could have “grave consequences”.

Superannuation funds and consumer groups from Indiana asked the Supreme Court to stop the asset sales because they believe the terms of Chrysler’s reconstruction unfairly favour unsecured creditors over secured creditors.

They claim the reorganisation plan is illegal and that the US treasury department erred when it used bailout funds originally intended for the banking industry.

The court was told by solicitor general Elena Kagan of the US justice department, who represented the administration in court, that blocking the sale could force Chrysler's liquidation.

Ms Kagan defended the use of the bailout funds and said granting a stay beyond June 15 would jeopardise the sale.

Under the deal brokered with Fiat, the Italian car-maker can walk away from the deal if it is not closed by June 15.

The court decision to stay the process was criticised by congressman Gary Peters, whose congressional electorate includes the Chrysler headquarters.

“It is quite clear that the Indiana case is not in the best interests of the people of Indiana,” he said.

“Other stakeholders, including secured lenders and Chrysler’s autoworkers, accepted shared sacrifice because they recognised their interest was better served keeping Chrysler alive rather than forcing liquidation.

“Why the officials who decided to take their objections all the way to the supreme court can’t recognise this is beyond me.

“Indiana officials are fighting over $4.8 million at the risk of costing their state over $20 million in tax revenue, tens of millions more in related costs and putting 4000 of their own people out of work.”

[vztrt]

Court has paved the way for Chrysler

http://www.goauto.com.au/mellor/mell...2575D1000AEF23

Chrysler sale imminent as court lifts stay

Supreme Court refuses to intervene to halt Chrysler sale to Fiat

By RON HAMMERTON 10 June 2009

THE US Supreme Court today paved the way for the sale of Chrysler to a new company controlled by Fiat, possibly within days, when it lifted a stay on the deal.

Justice Ruth Bader Ginsburg had granted the temporary halt on the sale of the ailing car-maker while she reviewed applications from Indiana pension funds and other investors who want to challenge the re-organisation on the grounds that they have been unfairly shortchanged.

But she lifted the stay, saying the parties requesting the halt had not “carried the burden” of justifying the Supreme Court’s intervention.

The US government told the court that Chrysler was losing $US100 million ($A124 million) a day, and that treasury aid to keep the company afloat would likely run out by the end of the month unless the re-organisation went ahead.

Lawyers for both Chrysler and the Obama administration said any delay would put the efforts to rescue Chrysler at risk, resulting in its immediate liquidation with the loss of 38,000 jobs.

Fiat told the court that its offer to buy a large chunk of Chrysler was due to run out on Monday and there was no assurance of reaching another deal.

Under the re-organisation brokered by the Obama administration and the US treasury department, a fund controlled by the United Auto Workers (UAW) union will also become a large shareholder, along with the US and Canadian governments.

The ink on the Supreme Court decision was hardly dry before the US bankruptcy court in New York approved Chrysler’s application to terminate 789 of its US dealerships, describing the move as “appropriate and necessary”, according to The Detroit Free Press.

Chrysler says the terminated dealers account for just 14 per cent of Chrysler sales.

The Chrysler court moves are being viewed as a precedent for General Motors, which is pushing ahead with its own sale plan under Chapter 11 bankruptcy.

[vztrt]

More on the Chrysler/Fiat deal.

http://news.theage.com.au/breaking-n...0611-c3ry.html

Chrysler, Fiat finalize global alliance
Rob Lever
June 11, 2009 - 12:39AM

Chrysler and Fiat announced Wednesday they have finalized a global strategic alliance, forming a new Chrysler Group that will begin operations immediately.

The move completes a quick restructuring of the troubled number three US automaker in a plan orchestrated and backed financially by the administration of US President Barack Obama and the Canadian government.

The US Supreme Court late Tuesday lifted the last legal obstacles, affirming the plan approved by a US bankruptcy judge following Chrysler's April 30 bankruptcy filing.

Under the terms approved by the court, the company formerly known as Chrysler LLC "formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC," a Chrysler statement said.

Fiat will hold an initial 20 percent of Chrysler Group, with the equity interest rising up to 35 percent if certain milestones mandated by the agreement are achieved. Fiat cannot obtain a majority stake in Chrysler until all taxpayer funds are repaid.

"This is a very significant day, not only for Chrysler and its dedicated employees, who have persevered through a great deal of uncertainty during the past year, but for the global automotive industry as a whole," said Sergio Marchionne, the Fiat chief executive who will also hold the CEO title at the new Chrysler.

"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.

"Those Chrysler operations assumed by the new company that were idled during this process will soon be back up and running, and work is already underway on developing new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler's hallmark going forward."

The Obama administration, which had extended emergency loans to Chrysler offered by the administration of his predecessor George W. Bush, insisted on the alliance as a way to keeping Chrysler viable.

Obama's auto task force said Chrysler, which had been losing money and market share since its separation from Germany's Daimler, could not survive on its own.

Fiat, which has not provided any cash for the alliance, will bring new technology to help Chrysler develop more fuel-efficient vehicles needed in the US and other markets.

The new Chrysler will be managed by a nine-member board, consisting of three directors to be appointed by Fiat, four to be appointed by the US government, one by the Canadian government and one by the United Auto Workers' Retiree Medical Benefits Trust.

The board was expected to name Robert Kidder, a veteran of US industry, as chairman.

The nine-member Supreme Court late Tuesday refused to extend a stay on the plan to weigh complaints from Chrysler investors who argued they would be short-changed and their rights' trampled by the Fiat deal.

In a two-page order, the court said the disgruntled investors -- a group of Indiana pension funds -- failed to show "that the circumstances justify" the stay placed on a lower court's approval of the deal.

© 2009 AFP

[vztrt]

Deal Complete

http://www.caradvice.com.au/32505/fi...chrysler-deal/

Fiat Closes Chrysler Deal

Fiat SpA has closed its acquisition of Chrysler’s strongest assets, a key step in the Italian carmaker’s ambitious plan to create a global player to ride out the worldwide automotive sales downturn.

The deal, announced jointly by Fiat and Chrysler, revives the 84-year old US carmaker that had been down to its last dollars before government intervention in late 2008.

It also completes a fast-track reorganisation for Chrysler, directed by President Obama’s administration.

Other parts of Chrysler will remain in bankruptcy to be sold or closed.

Fiat Chief Executive Sergio Marchionne became CEO of the new Chrysler Group LLC on Wednesday.

The carmaker’s former CEO, Bob Nardelli, will return to Cerberus Capital, the former majority owner of Chrysler, as an adviser.

Chrysler’s former vice chairman and president, Jim Press, has been named Marchionne’s deputy chief executive, and Fiat’s chief financial officer, Richard Palmer, has been named Chief Financial Officer of the new company.

In a memo to employees, Mr Marchionne voiced optimism about the new company’s outlook.

“There is no doubt in my mind that we will get the job done,” he said. He called the alliance “a bold first step to implement” lessons learned.

Mr Marchionne added that Fiat would begin the process of transferring Fiat’s technology, platforms and powertrains to Chrysler plants in the next few months.

In addition to Fiat, Chrysler Group LLC is owned by a union-aligned trust and the US and Canadian governments, which have taken over the best parts of Chrysler.

The White House welcomed the completion of the deal and said the new alliance was “poised to emerge as a competitive, viable automaker.”

The Canadian government said a restructured Chrysler is good for the Canadian automotive parts supply chain and for Canadian consumers.

The completion of the Chrysler sale, in roughly the time frame planned, has been seen by analysts as a good omen for the prospects of completing a similar process for General Motors, which filed for bankruptcy on June 1.

The GM sale is expected to take longer due to the size and complexity of the leading US-based carmaker. GM will be majority owned by the US government when its sale is completed.

[vztrt]

GM starting up again.

http://news.theage.com.au/breaking-n...0616-ccrl.html

Chrysler restarts first plant
June 16, 2009 - 9:24AM

Chrysler LLC says it has restarted a small factory that makes the Viper sports car.

The Conner Avenue assembly plant in Detroit is the first to begin making vehicles since May 4, when the company shut down all of its plants after it filed for bankruptcy protection. It reopened on Monday.

Spokeswoman Dianna Gutierrez says she is not sure when other factories will come back on line. Chrysler executives have said they would restart a majority of the plants by the last week in June.

The company emerged from bankruptcy protection on June 10.

© 2009 AP

[vztrt]

A little more on Chrysler starting up again

http://www.caradvice.com.au/32805/ch...es-production/

Chrysler's First Plant Resumes Production

Chrysler Group LLC has resumed production at its first factory since emerging from bankruptcy last week: a Detroit plant that makes the low-volume Dodge Viper sports car.

The re-opening will bring some life to the Conner Avenue plant, which Chrysler has been unable to sell.

The company has built only 61 cars there this year, and former CEO Robert Nardelli said in bankruptcy court documents last month that the business has drawn limited interest from potential buyers.

Chrysler shut its assembly operations after filing for bankruptcy on April 30. Executives have said most plants would resume production by the end of June.

“At this time, we cannot give exact timing in regards to the start of production at our other manufacturing facilities,” the carmaker, now controlled by Italy’s Fiat S.p.A., said in a statement today.

The plants initially will resume production of 2009 models and then switch to 2010 production after the normal summer shutdown in July.

Dow Jones reported the Viper plant reopening earlier.

In last month’s court filings, Mr Nardelli said Chrysler had offered to sell the entire Conner Avenue operation for $10 million.

“We received no purchaser interest,” Mr Nardelli said. “The market for such assets is extremely depressed at this time.”

The documents also said that on May 15, Chrysler received a $5.5 million offer from Devon Motor Works to buy the Viper operation, with no assumption of liabilities, and to lease the plant for one year.

Devon Motors was founded by Scott Devon, CEO of Cole’s Quality Foods, of Grand Rapids, Michigan, a maker of frozen garlic bread and toast, a receptionist at Cole’s said at the time.

Another nibble has come from Poland’s AutoGroup SA.

[vztrt]

Seven plants starting up.

http://www.caradvice.com.au/33017/ch...to-production/

Just a week after it finalised the deal with Italian carmaker Fiat that allowed it to move out of bankruptcy, Chrysler Group LLC has said it will restart seven of its North American plants the week of June 29.

The plants, which have been closed since Chrysler filed for bankruptcy on April 30, will open to finish production of 2009 models and close for the previously announced summer shutdown the weeks of July 13 and July 20, the company said in a statement.

After retooling for the 2010 models, the factories will reopen — possibly on a staggered schedule.

Chrysler’s powertrain, stamping, casting and transmission plants will reopen June 29 to support the seven plants.

Three assembly plants will reopen later: Toledo North (Jeep Liberty, Dodge Nitro); Belvidere, Illinois, (Dodge Caliber, Jeep Compass Jeep Patriot); and Saltillo, Mexico (Dodge Ram 1500 and Ram heavy duty models).

“We’ll announce the remaining plants at a later date,” said Dianna Gutierrez, a Chrysler spokeswoman.

Chrysler emerged from bankruptcy on June 9 under a new management team controlled by Italian carmaker Fiat S.p.A., which holds an initial 20 per cent stake in the US automaker.

The following plants will reopen June 29: Sterling Heights Assembly Plant, which builds Chrysler Sebring and Dodge Avenger; Warren Truck Assembly Plant, which builds Dodge Ram and Dodge Dakota; St. Louis North Assembly Plant, which builds Dodge Ram; Toledo Supplier Park, which builds Jeep Wrangler and Jeep Wrangler Unlimited; Brampton Assembly Plant, which builds Chrysler 300, Dodge Charger and Challenger; Windsor Assembly Plant, which builds Chrysler Town & Country and Dodge Grand Caravan; and Toluca Assembly Plant, Mexico, which builds Dodge Journey and Chrysler PT Cruiser.

[vztrt]

St Louis plant closed indefinitely

http://www.caradvice.com.au/33576/ch...-indefinately/

After just going back in to production last week, Chrysler has announced that it will be closing its St. Louis plant indefinitely from July 10th.

The plant, which produces Dodge RAM 1500 & 2500 models, was one of seven Chrysler had planned to reopen this month, but with the plant’s staple not selling the company was left with little choice.

According to an official statement from Chrysler it will offer its St. Louis plant employees incentives to leave the factory or employment at other Chrysler plants where possible.

All Chrysler plants will be idled during mid-July in order to re-tool the plants for the 2010 models.

[Sprint XR8]

Chrysler Needs Use of Tools to Restart, Lawyer Says

June 23 (Bloomberg) -- Chrysler Group LLC, created out of the best assets from its bankrupt predecessor, can’t make new cars until it gets needed tools tied up in legal disputes, a lawyer told a judge in charge of the reorganization.

The streamlined carmaker, created two weeks ago, may need mediation to resolve disputes over access to tools, Frank Oswald, a Chrysler lawyer from Togut, Segal & Segal LLP, told U.S. Bankruptcy Judge Arthur Gonzalez in Manhattan today. Oswald was updating Gonzalez at a hearing on disputes over “cure costs,” or amounts owed to suppliers to resolve contracts signed before Chrysler’s bankruptcy.

“We don’t want to have a situation where, after rushing to get the sale closed in 42 days, Newco is unable to start up production because we don’t have necessary parts,” Oswald said, referring to the new Chrysler entity.

Of 500 objections to Chrysler’s proposed cure amounts, only 70 remain unresolved, Oswald said in an interview after the hearing. He said he doesn’t know of specific tools Chrysler Group is missing. Oswald said lawsuits may need to be filed “to the extent that there are recalcitrant suppliers.”

One tool dispute was resolved after Chrysler sued Logghe Stamping Co. on June 4. The automaker demanded in the lawsuit to be recognized as the owner of the tools immediately, saying they were property of Chrysler’s estate.
http://www.bloomberg.com/apps/news?p...d=aj2we9EHMWIc

[vztrt]

http://news.theage.com.au/breaking-n...0706-d9pv.html

Chrysler names remaining board directors
July 6, 2009 - 11:09AM

Chrysler Group LLC on Sunday announced the remaining members of its new board of directors, a group that includes a former CEO of Northwest Airlines, investment bankers and top officials of the Italian automaker Fiat Group SpA.

Chrysler, which emerged from bankruptcy protection on June 11 under a new partnership with Fiat, said it expects to hold the first meeting of the nine-member board on July 29.

Serving as directors will be Douglas Steenland, who served as Northwest's CEO from 2004 until it was bought out by Delta Air Lines in 2008; George Gosbee, CEO of Tristone Capital Inc; Scott Stuart, founding partner of Sageview Capital LLC; Ronald Thompson, board chairman of the Trustees for Teachers Insurance and Annuity Association (TIAA); and Stephen Wolf, chairman of R.R. Donnelly & Sons Co.

The automaker had already disclosed that former Borden Chemical and Duracell Chairman C. Robert Kidder will serve as chairman. The United Auto Workers union, which has a large stake in the new Chrysler, previously named former Michigan governor James J. Blanchard to the board.

Sergio Marchionne, the CEO of Fiat and the revamped Chrysler, also is on the board, along with Alfredo Altavilla, head of Fiat's powertrain technologies unit and a senior vice president in Fiat's autos division.

Chrysler emerged from bankruptcy protection after just 42 days, cleansed of much of its debt and labor costs. But with sales down 46 per cent from the first half of last year - a year in which Chrysler lost $US8 billion - the company faces a huge challenge to make money again under its new Italian owner.

Fiat, which has taken over running Chrysler, will provide badly needed small-car and small-displacement engine technology, but that's more than a year away.

Chrysler's poor June performance also casts doubt on whether the US government's $US7 billion allocation will be enough to get the automaker through the US sales slump, which is projected to last into next year. The government has said it stress-tested the $US7 billion figure and determined that it is all Chrysler will need to make it until Fiat products arrive and Marchionne can turn the company around.

© 2009 AP

[vztrt]

Used Chryslers may come with warning notice

Used Chryslers may come with warning notice

If several US consumer groups get their way used Chrylser vehicles could soon come with a warning notice advising potential buyers that, under the terms of its Chapter 11 bankruptcy filing, Chrysler shed its liability for any defective vehicles produced before May 30th this year.

It is estimated that in the United States alone some 30 million used Chrysler vehicles have lost liability protection previously afforded by state laws.

“In Chrysler’s bankruptcy, the ability to form a new company free from the product liability burden of the old company was essential to the new company’s survival,” Chrysler spokesman Michael Palese said . “This is not an issue involving an identified potential safety issue with these vehicles, nor do petitioners claim to have uncovered a systemic defect that requires disclosure.”

Fortunately the decision is yet to be finalised with the US Fair Trade Commission yet to decide if it will move forward with the case. In any case, the new law would take at least one year to filter through.

Australian Chrysler vehicles will not be directly affected by this decision.

[vztrt]

Interesting with the US providing funding

http://news.theage.com.au/breaking-n...0817-en9k.html

Chrysler 'may make Fiat cars in Mexico'
August 17, 2009 - 3:04PM

Chrysler, which has partnered with Fiat as part of its bankruptcy plan, reportedly is considering making Fiat 500 subcompact cars at its plant in Mexico.

Citing "people familiar with the matter," the Wall Street Journal said Chrysler is considering what other Fiat models to introduce to the US market.

Chrysler is looking at making a small Fiat engine for Fiat 500 at a Chrysler plant in Trenton, Michigan, the report said on Monday.

It is also considering building a Fiat-derived compact car slightly larger than the 500 in the United States, The Journal said, citing an unnamed "person familiar with the plans."

Chrysler and Fiat sealed a deal in June to create a new global auto giant in a milestone for the world industry after the Italian champion stepped in to salvage the bankrupt US firm.

Fiat will at first hold 20 per cent of Chrysler Group, with its equity stake rising to 35 per cent and eventually to a majority stake as long as targets mandated by the deal are achieved and US government funds are repaid.

© 2009 AFP

[Bossxr8]

That would go down real well if they took US taxpayers money to build factories in Mexico. Red necks will choke on their moonshine.

[vztrt]

Chrysler 'to build Fiat 500 in Mexico'

http://news.theage.com.au/breaking-n...0818-eocu.html

Chrysler 'to build Fiat 500 in Mexico'
August 18, 2009 - 11:44AM

Chrysler Group LLC is planning to build the Fiat 500 small car at a plant in Mexico, according to a report published on Monday.

The automaker could also build an engine for the 500 at a plant in Trenton, Michigan, and is weighing building another compact car similar to the 500 in the US, according to The Wall Street Journal, which cited anonymous sources familiar with the matter.

Chrysler spokesman Gualberto Ranieri declined to comment on Monday.

Italy's Fiat Group SpA took a 20 per cent stake in Chrysler earlier this year as part of the Auburn Hills, Michigan-based automaker's exit from bankruptcy protection. The company has also received billions in loans from the federal government, which owns an eight per cent stake in the company.

Fiat, as part of its purchase, had announced plans to bring the hugely popular 500 to the US, along with the Alfa Romeo brand and Fiat-designed compact and midsize cars. The Italian automaker also plans to bring engines, transmissions and other technologies to Chrysler.

Chrysler operates an assembly plant in Toluca, Mexico, that builds the PT Cruiser sedan and Dodge Journey crossover and employs more than 2,100 workers organised under a Mexican union. The company also has a truck assembly plant in Saltillo, Mexico.

© 2009 AP

[vztrt]

'Old Chrysler' creditors sue Daimler

http://news.theage.com.au/breaking-n...0819-ephb.html

'Old Chrysler' creditors sue Daimler
August 19, 2009 - 8:09AM

Chrysler LLC's creditors have filed a lawsuit against Daimler AG charging that the German automaker unlawfully stripped billions of dollars in assets from the US carmaker before selling it to a private equity firm.

In the suit, filed on Monday, the creditors claim that in the months leading up to the 2007 sale of most of Chrysler to Cerberus Capital Management LP, Daimler undertook a restructuring of Chrysler that removed key parts of the company for little or nothing in return.

"This restructuring and sale served Daimler's interests well, enabling it to extract the best possible terms in its sale of the debtor, while eliminating billions of dollars of actual and contingent pension and other liabilities," the creditors said in their lawsuit.

"But the transaction caused the debtor (and its creditors) to suffer grievous harm."

Julia Engelhardt, a spokeswoman for Daimler, on Tuesday said the automaker is confident that the lawsuit's accusations are without merit and will defend itself against them.

Specifically, the creditors say Daimler split off Chrysler's US and Canadian financing units in order to get a better sale price from Cerberus.

As a result of the split, the assets of the financing units were not subject to Chrysler creditors' claims when the automaker filed for bankruptcy protection on April 30.

Under a deal backed by the US government, the bulk of Chrysler's assets were acquired by a group led by Italy's Fiat Group SpA and emerged from bankruptcy protection as a new company about 42 days later.

Chrysler's secured lenders received $US2 billion ($A2.44 billion) for their $US6.9 billion ($A8.4 billion) in debt, while most of the company's unsecured creditors have been forced to seek compensation from the assets left over from the sale - known as "Old Chrysler".

It's doubtful that there will be enough left to pay their claims.

The lawsuit was filed with the New York bankruptcy court overseeing the liquidation of the pieces of Chrysler not included in the sale to Fiat. It seeks damages to be determined through a trial plus interest and certain legal fees.

Chrysler Group LLC, the new company created by the sale to the Fiat-led group, is not involved in the lawsuit.

Daimler has recorded billions in losses related to Chrysler since selling off most of its stake to Cerberus. That firm's acquisition of 80.1 per cent of Chrysler dissolved a stormy "merger of equals" made in 1998 between Daimler-Benz and Chrysler Corp.

But in November 2008, Cerberus accused Daimler of intentionally misleading it before it sold the controlling stake to the private equity firm in a $US7.4 billion ($A9.01 billion) deal.

In April of this year, Daimler reached a deal to divest its remaining 19.9 per cent stake in Chrysler LLC.

© 2009 AP

[vztrt]

Chrysler sues former parent Daimler

http://www.caradvice.com.au/39045/ch...arent-daimler/

Chrysler sues former parent Daimler

According to a report published in Autonews today, Chrysler has accused former parent Daimler of refusing to honour contracts to supply components thus threatening production at some Chrysler factories, a claim Daimler strongly rejects.

The allegations are contained in a lawsuit filed last Friday in US Bankruptcy Court, New York.

“Daimler’s conduct threatens to shut down Chrysler Group’s manufacture of key product lines,” said Chrysler spokesman Gualberto Ranieri.

The dispute stems from Daimler’s claim that Chrysler owes it 55 million euros (US$78.7 million) to compensate for reduced volume for the 2.2-litre diesel engine Daimler has supplied to Chrysler.

The diesel is used for European sales of such models as the PT Cruiser. Daimler says it owed this amount because Chrysler didn’t buy as many of the engines as it had said it would.

“We believe these claims are without merit, and we will defend ourselves vigorously,” said Daimler spokeswoman Julia Engelhardt.

In its complaint, Chrysler says “the volume shortfall payment issue was resolved in an April 17, 2009, pre-petition agreement that settled a number of disputes between Daimler and the old Chrysler.”

The complaint says Daimler is refusing to supply steering columns and torque converters in order to pressure Chrysler to make the volume-shortfall payment.

“Chrysler Group believes that Daimler’s misconduct is designed to extort a settlement by wrongfully withholding crucial parts that Daimler has contractually committed to supply to Chrysler Group,” Mr Ranieri said.

He also said that Grand Cherokee production at the Jefferson North assembly plant in Detroit is threatened, as well as production of the Dodge Charger and Challenger and Chrysler 300C in Brampton, Ontario.

Mr Ranieri called Daimler’s action a “direct violation” of the April 17 settlement agreement later approved by the Bankruptcy Court.

Chrysler filed for Chapter 11 bankruptcy on April 30 and emerged under the control of Italy’s Fiat on June 10.

[vztrt]

Chrysler goes back to drawing board – again

http://www.goauto.com.au/mellor/mell...2576480009999F

Two top sales executives walk out of Chrysler Group as Dodge is split in two

7 October 2009

By RON HAMMERTON

CHRYSLER Group has been given a second overhaul within months by its new Fiat masters who also announced the abrupt departure of two recently-appointed top executives.

The Dodge brand has been split in two – Dodge Car Brand and Dodge Ram Brand – under the fresh shake-up for the troubled company which came under control of Fiat SpA in June amid Chapter 11 bankruptcy proceedings.

The company’s top sales executive, Chrysler brand CEO Peter Fong – appointed after the arrival of new Chrysler Group CEO Sergio Marchionne from Fiat – has left for personal reasons, replaced by another Fiat executive, Lancia chief Olivier Francois.

At Dodge, new brand CEO and president Michael Accavitti also quit “to pursue other interests”. He is replaced by two new appointments – Chrysler’s design vice-president Ralph Gilles - best known for leading the 2005 Chrysler 300C design team - is new Dodge Cars brand president and CEO, while Chrysler’s Denver business centre manager Fred Diaz heads up the newly independent Dodge Ram truck brand.

US media speculation suggests Mr Marchionne wants to forge a more sporty focus for Dodge cars, separate from the more utilitarian pick-up image of Dodge Ram trucks.

Mr Marchionne described the ‘unbundling’ of Dodge as “further refinement”.

“This reorganisation will allow us to protect and develop the unique nature of the product offerings within the Dodge brand,” he said.

The only senior brand chief to keep his job is Jeep president and CEO Michael Manley, who also has been given the task of managing Chrysler Group activities outside North America. The product planning role previously held by Mr Manley will be taken over by Joseph Veltri.

Like Mr Manley, Mr Francois will do double duty, continuing to manage Lancia while trying to pull Chrysler out of its market nosedive. Last month, Chrysler Group sales in the US were down 42 per cent on September 2008 in a market down 23 per cent.

Frenchman Mr Francois’ twin role is seen as a move by Fiat SpA to integrate Chrysler products into the upmarket Lancia sales network in Europe. Automotive News speculates that Lancia might base its next-generation Thesis flagship on the next Chrysler 300C. The Chrysler Sebring and Lancia Ypsilon are also subjects of platform-sharing speculation.

In the US, the Chrysler product range is also set to get an injection of Fiat technology, including the Italian brand’s acclaimed MultiAir valve-train system.

The new Dodge Ram division – which will stand alone with its own profit and loss responsibility, in the Fiat style – is in line to gain a range of re-badged Fiat commercial vehicles to boost its reach.

The Fiat Ducato and Iveco Daily are tipped to make the transition from Europe to North America.

Meanwhile, Chrysler dealers have rejected Chrysler Group’s offer to consider applications from 789 dealerships culled under the bankruptcy re-organisation – a quarter of the sales network – to apply for 103 new franchises that it plans to establish around the country.

Instead, the dealers told Chrysler at talks in Washington that they want automatic reinstatement of any rejected dealerships that met or exceeded Chrysler’s objective criteria.

[vztrt]

Chrysler reveals plan for next five years under Fiat

http://www.goauto.com.au/mellor/mell...2576660013B5D4

Australian Chrysler Group line-up to be transformed under Fiat-led product program

6 November 2009

By TERRY MARTIN

CHRYSLER Group’s operations in Australia are set for a radical transformation in the coming years as the American auto giant – now under Fiat rule – strives to almost quadruple its sales outside North America to 500,000 units by 2014.

Specific Australian targets and distribution arrangements are still to be finalised, but Chrysler Group’s international sales chief Michael Manley this week revealed details of a much broader global product portfolio for Chrysler, Jeep and Dodge as part of the company’s much-anticipated five-year plan.

To include vehicles produced by Chrysler for Fiat, the ambitious sales target represents a massive increase from the 144,000 sales outside North America forecast for 2009, accounting for up to 18 per cent of the Chrysler Group’s total sales – up from 11 per cent expected this year.

Overall sales are expected to rise from about 950,000 this year to two million in 2014 – the year Chrysler believes it will post an operating profit of $US5 billion ($A5.5 billion) and the point where it will have cleared its debt of $US12.5 billion ($A13.8 billion) in life-saving US government loans.

The company expects to break even on a net basis in 2011.

The new product portfolio will include new passenger cars and SUVs spanning the compact, small, medium and large segments, covering more than 70 per cent of the global new-vehicle market – more than double the coverage Chrysler currently achieves.

In his presentation, Mr Manley said Chrysler Group’s entire product portfolio would be refreshed by 2012, with 50 per cent derived from Fiat Group platforms by 2014.

He said there would be a “clear focus” on the development of just two core brands in each market – with Fiat’s Lancia now considered interchangeable with the Chrysler brand – but Chrysler Australia managing director Gerry Jenkins has confirmed to GoAuto that the focus would continue in this market on all three existing brands.

While distribution rights for Lancia in Australia currently rest with Fiat importer Ateco Automotive, Fiat has made it clear that Lancia will not be sold in right-hand drive countries, which rules it out for this country.

Furthermore, Mr Jenkins said he was “absolutely” confident Chrysler Australia would continue to be run as a factory-backed operation rather than being farmed out to Ateco or another independent distributor.

Indeed, GoAuto can reveal that planning is underway for Chrysler to shift its operations from Mercedes-Benz Australia/Pacific headquarters in Mulgrave, east of Melbourne, to the Fiat-owned factory-run Iveco Trucks Australia head office in nearby Dandenong.

Chrysler Australia has also been holding discussions with Fiat-owned Case New Holland.

This is in line with Mr Manley’s presentation this week that sees Chrysler sever sales and marketing operations, financial services and back office support services with Daimler and instead leverage the Fiat Group’s distribution infrastructure and resources, integrating into this parts distribution and logistics.

“We’re pretty certain that we’re going to be able to move in with Iveco eventually, and they can give us a lot of support for back-office functions, such as IT and parts logistics and things like that – the things that are really invisible to both dealers and customers,” Mr Jenkins told GoAuto.

“We’re not competing brands with Iveco so it works really, really well. There’s a lot of background (activities) – distribution, our vehicle logistics – where we can pool all of our volumes and just get better deals in the marketplace.

“From an operational point of view, that goes a long way for me. It’s something that I don’t have to spend money on, that I can put money elsewhere on. It’s just good business. So we’re going to continue to look at ways that we can fully leverage the partnership with the Fiat Group.”

Chrysler Australia management will receive a future product briefing in Detroit in the coming weeks, and Mr Jenkins said he was certain the US would allow the Australian operation to continue developing all three brands and core models, including the Chrysler 300C, Dodge Nitro and Jeep Wrangler.

Australia is in the top-five markets for Chrysler outside North America – not to mention number one for right-hand drive markets, and number-one for Wrangler outside NA – albeit with around 10,000 annual sales across the Chrysler, Jeep and Dodge brands. The short-term aim is to lift that number to 12,000.

“In Australia, there will be essentially no change,” Mr Jenkins said. “We’re going to continue to evaluate and submit our business case as we have in the past, and we will continue to promote the three brands. We have made some good traction in the market.”

Jeep remains the backbone of the Chrysler Group, with global sales expected to increase 60 per cent to 800,000 by 2014.

In his presentation in Detroit, Mr Manley said he wanted to take Jeep “back to its historic place as the global sport-utility vehicle brand”, although to do this he confirmed that the Commander would be phased out by the end of next year and that the Cherokee (also known as the Liberty), Patriot and Compass would also be terminated in 2012.

Fiat-developed products will replace the Cherokee, Patriot and Compass in 2013, among them a single model standing in for Patriot/Compass and an all-new sub-compact SUV.

A serious off-road variant across all model lines will be integral to the reformulated Jeep brand, as will new derivatives of the harder-core Wrangler off-roader – the one vehicle that will retain a traditional separate chassis construction.

Rather than take Dodge into an exclusive performance sphere, the Chrysler Group this week turned the tables on pundit expectations with brand chief Ralph Gilles announcing that Dodge would become more of a “lifestyle-oriented” marque crossing a wide range of mainstream segments.

There will be 11 redesigned or heavily revised Dodge models by 2014, including an all-new full-sized seven-seat crossover wagon in the fourth quarter of 2010 – a model that was in the works before Fiat arrived on the scene earlier this year – and, in 2012/13, three all-new Fiat-based models: a compact hatch (replacing Caliber), a medium-sized sedan (replacing Avenger) and, for the North American market, a small sedan.

Viper production will cease in 2010, although a sportscar that draws from Fiat’s Maserati and Ferrari brands is under development and expected on sale in 2012.

As GoAuto has reported, the Chrysler brand is heading more upmarket to rival the likes of Nissan’s Infiniti and the prestige European brands.

It will be the biggest benefactor from the Fiat alliance, and, in his presentation this week, Chrysler brand chief Olivier Francois emphasised the “ironically similar” styling and “historic DNA similarities” between Chrysler and Lancia. He also identified Chrysler’s new marketing vision as “different, remembered and aspirational”.

Chrysler will next year upgrade its key two models – the 300C large sedan and the Voyager (Town & Country) people-mover – but by 2014 it will also have new entrants in the compact, small and medium-sized passenger car segments, as well as a medium-sized crossover wagon.

The Sebring-replacing ‘200C’ mid-sizer will be based on Alfa Romeo’s 159 successor, the Giulia, while the compact will be based on the Alfa MiTo and the small car springing from the 147-replacing Alfa Milano.

A new-generation Voyager is also due in 2014.

As GoAuto has reported, the Chrysler Group will leverage Fiat’s powertrain technology as well as vehicle architectures.

There will be a substantial shift from eight- and six-cylinder engines to Fiat-derived four-cylinder engines, many combined with a Fiat-designed dual-clutch transmission, although Chrysler this week said it was sticking with its all-new Pentastar V6 petrol engine.

The Pentastar is set to debut in the upgraded Jeep Grand Cherokee next year and will replace all Chrysler’s V6 engines, from 2.7 to 4.0 litres in displacement. Fiat technology, including MultiAir, will be applied to the Pentastar in due course – and will also be seen, along with other six-cylinder (and larger) powerplants, in future Fiat Group (particularly Alfa Romeo) products.

As a result, Pentastar is set to replace the current Australian-built V6 engine range sourced from GM Holden.

Chrysler also revealed this week that hybrid drivetrains remained under development, with a petrol-electric Ram pick-up truck due late in 2010/early 2011 and a hybrid people-mover arriving soon after in 2011.

‘There is no ‘business as usual’ at Chrysler,” said Chrysler Group chairman Robert Kidder. “There is incredible commitment to, and energy for, change.”

Chrysler sales are down 30.6 per cent in Australia year-to-date, while Jeep is down 29.9 per cent and Dodge just 1.1 per cent below the running rate for the same period last year. The three brands achieved 10,000 sales combined in 2008, with Jeep accounting for 50 per cent of the total.

Chrysler Australia spokesperson Jerry Stamoulis told GoAuto the company was still waiting to hear specific information as it relates to the Australian market.

“There is a lot to take in from all the presentations but we see it all as positive information, without a doubt – extremely positive for international markets,” Mr Stamoulis said. “There is a strong focus for volume to increase dramatically in international markets, and being one of the top-five markets for international, we’re expecting to play a pivotal role in that.

“We are still waiting to hear a lot of the specific information. It is still very early. As they look at the regional portfolio, they are still working on a number of markets, including Australia.

“Our team are off to the US over the next few weeks to talk about the future product and so on, and we’ll get some (concrete) idea over the coming months.

“But one thing that was communicated (in Detroit this week) was that rather than having a focus on … what we call ROW markets – ‘rest of world’ markets – it will be more specific to each market, and there will be more communication between the countries (and head office) rather than regions.”

[Bossxr8]

No more Holden V6's for Alfa Romeo.

[vztrt]

Chrysler’s new comrades

http://www.goauto.com.au/mellor/mell...25766A000A67DE

Chrysler closes in on distribution deal with Iveco to shore-up Australian operations

10 November 2009

By TERRY MARTIN

CHRYSLER Australia remains “absolutely” confident it will run as a factory-backed operation as it embarks on a massive product renewal program and a new distribution structure under Fiat SpA, despite handing responsibility for New Zealand over to the independent Sime Darby Automobiles.

In an interview with GoAuto after the resurrected Chrysler Group revealed its much-anticipated five-year plan in Detroit last week, Chrysler Australia managing director Gerry Jenkins revealed that he was close to securing a distribution deal with Fiat-owned Iveco Trucks Australia.

Once finalised, the new arrangements will end speculation that Chrysler’s Australian operations might be contracted out to Sime Darby or another large independent distributor, such as current Fiat importer Ateco Automotive.

Ateco, which also handles Fiat’s Alfa Romeo brand and, under a separate arm, Ferrari and Maserati, told GoAuto last month that it was well placed to handle Chrysler Group brands were it given the chance. It has declined to comment on the latest developments.

Sime Darby’s Australian automotive division currently includes Peugeot and SsangYong, and the Malaysian multinational has made it clear that it is looking to broaden its operations in Australia.

Sime Darby Motors Group (Australia) managing director Rob Dommerson told GoAuto this week that those expansion plans remained, but said he was unaware of any moves at head office level to extend its reach with Chrysler beyond New Zealand.

GoAuto can also now reveal that planning is underway for Chrysler to shift its operations from Mercedes-Benz Australia/Pacific headquarters in Mulgrave, east of Melbourne, to the Fiat-owned factory-run Iveco Trucks Australia head office in nearby Dandenong.

Chrysler Australia has also been holding discussions with Fiat-owned Case New Holland.

The latest developments are in line with Chrysler’s intention to sever sales and marketing operations, financial services and back office support services with former alliance partner Daimler across the globe. Instead, it will leverage the Fiat Group’s distribution infrastructure and resources, integrating into this parts distribution and logistics.

Mr Jenkins told GoAuto that Iveco Trucks Australia, whom he described as “great comrades”, had welcomed Chrysler Australia “with open arms”.

“We’re pretty certain that we’re going to be able to move in with Iveco eventually, and they can give us a lot of support for back-office functions, such as IT and parts logistics and things like that – the things that are really invisible to both dealers and customers,” Mr Jenkins told GoAuto.

“From an operational point of view, that goes a long way for me. It’s something that I don’t have to spend money on, that I can put money elsewhere on. It’s just good business. So we’re going to continue to look at ways that we can fully leverage the partnership with the Fiat Group.

“We’re not competing brands with Iveco so it works really, really well. There’s a lot of background (activities) – distribution, our vehicle logistics – where we can pool all of our volumes and just get better deals in the marketplace.

“The best one, of course, is parts. We sell roughly $40 million worth of parts every year – I don’t know what they do, but they probably do twice that – so by adding our volume to the basket, it allows them to grow and get a better deal with their suppliers.

“It’s just win-win everywhere you look. It’s just very, very positive and very beneficial, so we’re quite eager to move on.

“The partnership with Mercedes has been absolutely excellent. For us, it’s been great. But let’s move on now – it’s time to get on to something else.”

Mr Jenkins described the situation in New Zealand as a “different scenario” where the market was too small to justify running a full factory-backed operation. As a result, Chrysler decided to find an independent distributor, and Sime Darby was seen as the ideal partner.

“We started discussing and looking at opportunities within New Zealand and beyond, and they became very interested in the business because not only did they have three retail outlets, but those three retail outlets represented like 65 per cent of the retail volume for us in New Zealand,” Mr Jenkins said.

“So it seemed like a natural situation, where they have a wholesale (arrangement) – they already do a wholesale for Peugeot, and some other manufacturers on the truck side – so it just seemed like a perfect situation.”

Chrysler last week revealed in Detroit that it planned to increase its sales outside North America from 144,000 forecast this year to no fewer than 500,000 units by 2014. Australia’s part in this is still to be specified, although Mr Jenkins identified its short-term target as 12,000 sales a year for the Chrysler, Dodge and Jeep brands combined.

It will not achieve that this year, with Chrysler sales down 30.6 per cent year-to-date, Jeep down 29.9 per cent and Dodge down 1.1 per cent. The three brands achieved 10,000 sales combined in 2008.

Nonetheless, Mr Jenkins said the Australian sales volume – unlike New Zealand – was high enough for Chrysler Australia to maintain its status as a factory-backed operation.

“It’s a different scenario in Australia where our target is to get to 1000 a month – that’s where our volume needs to travel, and we’re really set off in that way from both a wholesale and retail perspective,” he said. “We’ve got just under 50 people (at head office) and we’ve got about 60 dealers across the country, so it’s totally a different scenario where I can generate sufficient volume to amortise my overhead cost.

“So the final record is obviously we’re going to grow the business here in Australia, added to what we now call an NSC – a national sales centre/office.

“I’m always interested in reducing my costs, but I have sufficient volume here in Australia to justify an NSC and we feel that is strategically where the company wants to go.”

Chrysler Australia’s marketing and product general manager Craig Bradshaw told GoAuto last month that the company was eager to take on the Fiat and Alfa Romeo brands from Ateco should they become available.

However, Mr Jenkins said he did not see a change in the status quo, at least in the short-term.

“I don’t know how that’s going to pan out,” he said. “I know that Turin seems to be very happy with them (Ateco), and I don’t see anything in the short-term coming with regards to Ateco and us.

“Fiat’s intent is to continue to run the business here in Australia through Ateco, which I respect, and so be it. If something changes in the future, we’ll certainly look at it but there is absolutely nothing planned at this point.

“They’re going to remain in Sydney, and run their business through their network, and we’re going to do our business as we currently do today through our network. We do not have one dealer in common at this point, but it will be interesting.

“We’ll keep in the loop, though, if something does materialise over the next two or three years.”

Sime Darby took control of Chrysler distribution in New Zealand last month. It represents the Chrysler, Jeep, Dodge and Mopar brands “in their entirety in New Zealand with a seamless continuation of new vehicle supply, parts supply and warranty/technical support”.

[vztrt]

http://www.caradvice.com.au/50408/ce...hin-two-years/

CEO to quit Fiat or Chrysler within two years

December 9, 2009 by Matt Brogan

Running both Fiat and Chrysler is proving a massive responsibility for the CEO of both manufacturers, Mr Sergio Marchionne. Speaking yesterday in Washington DC, Mr Marchionne said he plans to resign from one of the two positions sometime within the next 24 months.

Though not set in concrete, Mr Marchionne did strongly hint which company would soldier on without his leadership.

“This cannot go on forever,” said Mr Marchionne. “Certainly within the next 24 months, we’ll find a more permanent solution, either there (in Italy) or here. I’m not threatening the Italian side with a departure from Italy, but we need to find a solution.”

Mr Marchionne said that his primary focus is on turning Chrysler around in order to pay back American taxpayers. Chrysler received significant low-interest loans from the US Treasury earlier this year.

“We are not planning miracles at Chrysler,” he said. “We deliver what we promise.”

[Wally]

Looks like Phil Edmonston is having his usual say:

http://www.vancouversun.com/cars/Chr...624/story.html

[vztrt]

Fiat slides back into the red

http://www.goauto.com.au/mellor/mell...2576B70006BE66

Marchionne pleads for more scrappage schemes as Fiat Group loses $1.3 billion

26 January 2010

By JAMES STANFORD

FIAT Group SpA posted a net loss of €281 million ($A440m) in the fourth quarter of 2009 which contributed to an €848 million ($A1.3b) loss for the full year.

It was the first loss for the Italian company since chief executive Sergio Marchionne pushed it back to profit in 2005 after four straight years in the red.

Fiat said its car brands performed well, but its commercial vehicles, truck and agricultural and construction manufacturing divisions were hit hard by the global financial downturn.

The company attributed €699 million ($A1.09b) to restructuring charges which included its “strategic realignment with Chrysler” under which it acquired a 20 per cent stake in the US giant last June, with separation packages for 8300 workers across the group.

The company forecast a return to profit in 2010, but said this could hinge on continued European government incentives that encourage the purchase of environmentally friendly vehicles, such as scrappage schemes.

Mr Marchionne told analysts in a conference call this week that this year “is probably the wrong year to abandon the scrappage schemes”.

“I think it will have a pretty drastic impact on demand on the European side,” he said.

Mr Marchionne, who has been appointed chief executive of Chrysler Group in addition to his role at Fiat, has announced plans to quickly take advantage of the new set-up, with Chrysler to begin producing Fiat engines in Michigan late this year and start building the Fiat 500 small car from 2011.

As GoAuto reported last week, Fiat also plans to streamline its engine strategy across the Fiat and Chrysler brands and expand the Chrysler range with rebadged Lancia small cars in a range of markets including Australia.

While the tie-up with the struggling American giant had an impact of Fiat’s 2009 results, Mr Marchionne told GoAuto at the Detroit motor show that he was pleased with the way the Fiat and Chrysler Group alignment was playing out. “The alliance is working is probably the best way to describe the state of affairs,” he said.

“I think that we have accomplished what we wanted to accomplish in terms of the dissemination of the technology of Fiat onto Chrysler. All those processes are underway. “The fact that we will be manufacturing the 1.4-litre engine in Dundee (Michigan) in the third quarter of this year, which is 12 months after we signed the agreement, is an indication of how quickly things are moving.”

Mr Marchionne said the initial phase of what he called Chrysler’s cleansing process had not been easy. “Seven months have gone by, they have been long and hard months, but I think we have set all the posts for what is going to be a fruitful long-term relationship,” he said.

Mr Marchionne said Chrysler was in a very different position to the Fiat group: “We are at different stages of the recovery pattern. Fiat fixed its problems.

“Chrysler needs to now do its recovery. Our objective here is to really assist Chrysler in coming back. It’s not easy; you have seen the competition out there.”

In a frank admission, Mr Marchionne said the Chrysler line-up was not as strong its rivals.

“There are a lot of people who have started this process a lot earlier than we have. On a relative basis they probably have a stronger portfolio than we do,” he said.

Mr Marchionne was asked when Chrysler sales would hit ‘rock bottom’.

“I think we did. If you are talking about market share, the numbers we have seen in the last two or three months indicate the natural capacity of the system, without inducing it with crazy incentives, without trying to bribe customers with cheques,” he said.

“This is natural capacity of the house and it tells you about what happened in terms of the equity of these brands. We have allowed other people to occupy the space so we need to claw that space back and we need to fight really hard.”

Despite describing rebuilding Chrysler sales as a “huge” job, Mr Marchionne said one of the most important points was that the company was not “burning cash” to close sales and would not be concerned if it lost some sales in the short term as a result.

“We know we are not depending on an unnatural sales organisation to try and keep this thing afloat,” he said.

“The first four months of 2009 were absolutely doped. The incentives that were going out of here were incredible. We will not repeat this.”

[vztrt]

http://www.autoblog.com/2010/03/30/m...-even-in-2010/

Marchionne: Chrysler will break even in 2010

by Chris Shunk (RSS feed) on Mar 30th 2010 at 4:59PM

Think Chrysler is having a banner 2010? A quick glance at the sales charts shows a company in dire need of new product, better quality and a Hail Mary on the showroom floor. But as bad as the situation is right now in Auburn Hills, MI, it appears the company could just about be done bleeding cash.

The Detroit News reports that Chrysler/Fiat CEO Sergio Marchionne told a group of reporters that he was committed to breaking even, adding that the company won't lose money on an operations basis this year. Is Sergio being optimistic or is he basing his numbers on cold, hard facts? Who knows, but when asked if there was a chance Team Pentastar could pull of an actual 2010 profit, he reportedly answered "who knows?"

Marchionne also told reporters that Chrysler had $5 billion in cash at the end of 2009, the 2011 Jeep Grand Cherokee was on schedule to hit production on May 3, and that 50 percent of all Chrysler Group vehicles will be riding on Fiat platforms by 2014. The Fiat/Chrysler CEO also reiterated his stance that Chrysler would sell 1.1 million vehicles this year and that U.S. auto sales would crest 11 million units in 2010.

It's only fair that Marchionne gave us a state of The Pentastar update given the fact that today marks the one-year anniversary of when the Obama Administration gave Chrysler 30 days of working capital to work out an official tie-up with Fiat.

[Source: The Detroit News]

[russellw]

Sergio Marchionne
Chief Executive Officer, Chrysler Group LLC
"A Year of Transformation"
NADA/IHS Global Insight Automotive Forum 2010 Keynote Speech
Marriott Marquis Hotel on Times Square
New York, New York
March 30, 2010

--------------------------------------------------------------------------------

I very much appreciate the invitation to come and address you today and to have the opportunity to share some of my thoughts on the significance of what the auto industry is currently going through and the enormous challenges we have ahead of us.

Today is the anniversary of what represents a turning point in the history of the U.S. auto industry and of Chrysler. It was exactly one year ago today that President Obama publicly rejected the turnaround plans submitted by Chrysler and GM. Not only did he reject those plans but he also set conditions — and a strict deadline — for both to work with creditors, unions and other stakeholders to come up with a turnaround plan that would justify investing additional tax dollars and give the American public confidence in the long-term prospects for success.

On that day, President Obama gave us a second chance. In the judgment of the Administration, Chrysler was too small to survive. President Obama committed to providing Chrysler working capital for 30 days — allowing time to obtain a number of stakeholder concessions and to complete a partnership deal that would enable it to remain viable. He also mooted the possibility of a fast-track bankruptcy proceeding to facilitate a restructuring.

And, as you all know, the company did go through Chapter 11, and emerged in June as a new entity — Chrysler Group LLC — with Fiat as its alliance partner. This change has affected many lives on both sides of the Atlantic, including mine.

I have discovered that if I travel at night in both directions, it doesn’t interfere with working hours. An efficient solution even if it sometimes plays havoc with my metabolism. But personal considerations aside, at a company and industry level, this past year has been devoted to acting to transform our business with a sense of urgency. We didn’t really need a Presidential panel to point out how imperative it was to step up the pace of change.

Before setting off in a new direction, it was important to take a clear-eyed look at what happened to the auto industry in 2009 — and why. In the U.S., the drop in vehicle sales was of epic proportions. With credit frozen, consumer confidence faltering and unemployment rising, 2009 sales were the worst in nearly three decades.

What we lived through in 2009 was one of the most challenging and destabilising experiences that an industry could possibly go through. Somewhat like swimming in the ocean and never knowing when you will be able to touch bottom as the sands constantly shift beneath you. Two American automakers that between them had 180 years of history were forced into Chapter 11, emerging only after a painful process in which every constituent — management, unions, suppliers, debtors and shareholders alike — had made deep concessions.

It would be remiss of me not to acknowledge that Chrysler Group LLC owes a deep debt of gratitude to taxpayers in the U.S. and Canada for the loans that have enabled a new, restructured company to take life. This government assistance, as we all know, was not universally popular. Some economists subscribe devoutly to the theory of “creative destruction,” a belief that progress depends on sweeping away the existing order to create a new and more efficient one. Alan Greenspan, in fact, referred to creative destruction as “the central dynamic of capitalism.”
This concept accepts the loss of jobs and the extinction of companies as the necessary “collateral damage” that happens along the way.

And I have to admit, that I am a supporter of the theory of the Austrian economist, Schumpeter. In my speeches, I have often made public reference to the gales of creative destruction that he heralded as the key ingredient of capitalism, whereby new market entrants are incessantly nurtured with the sole objective of destroying the old, established and inefficient ones. This creative destruction is the ultimate engine of growth, of progress, of innovation.

But if an enterprise as large and as interconnected as a major automaker fails, particularly at a time when financial markets are in turmoil and effectively closed, the effects are amplified from ripples into a tsunami that eventually crashes to shore many miles or even oceans away from where it began. The fallout spreads far beyond the company’s employees and its retirees and eventually engulfs employees, retirees and families of suppliers, dealers and other connected businesses.

A desire to prevent the potential damage, at a time when the financial system was unable to digest a creative destruction on such a scale, was the prime reason that the U.S. and Canadian governments have been so “hands on” with the auto industry. Nowhere else in the world has such commitment and courage been shown. All of this was done with the extraordinary vision and clarity of those who don’t hide problems under the rug, but tackle them head on to resolve them at the very core. In this, the United States has been a unique example of a will to pick oneself up, reinvent oneself and change course, laying a new foundation for the future. A new model is being created because there has been a true rethinking of the system.

We at Chrysler can testify to the extraordinary determination and the profound sense of responsibility exhibited by all of the players involved in this process. Each one has played their part in transforming the effects of the recession from an obstacle into an extraordinary opportunity.

We have been given the responsibility of achieving a “creative reconstruction.” Our task is to learn from experience and, without blowing the whole thing up, build a dynamic, future-looking enterprise. The challenge before us is to put what we have learned from this economic crisis to good use. We can — we must — regain the creative spark that propels companies … and industries…and economies forward.

Creative reconstruction begins with recognition of the fact that the former points of reference no longer exist. Traditional assumptions about the financial system, the economy and consumer behaviour have been swept away. We need to accept the fundamental, irreversible changes that have taken place … anticipate further future changes … and rethink everything we do. Otherwise we are destined to remain prisoners in Plato’s cave, with our gaze fixed on old “certainties” that are, in fact, only the shadows of reality.

The economic downturn has increased the pressure on all of us to reinvent ourselves — and to do so quickly. It brought front and centre certain structural problems that have plagued the auto sector for decades. The most major and fundamental of which is production overcapacity. This map illustrates clearly that, around the globe, automotive plants are operating
well below capacity. Notional production capacity worldwide is approximately 94 million cars per year, which is about 30 million more than the market would be able to digest normally. Approximately one-third of this capacity is located in Europe, where already low levels of capacity utilisation are destined to decline even further. The need for rationalisation is undeniable.

The other historic problem we face is the industry’s overall economic inefficiency. Some years ago the Financial Times’ “Lex Column” expressed, in a typical wry British manner, this view of the automobile industry:

“Choosing between carmakers is often like trying to pick the least flea-ridden dog.”

The history of our sector has, in fact, been anything but brilliant. Not only has it not generated acceptable returns, it has actually destroyed value.
With the exception of our competitors in the Far East, this severe underperformance has been characteristic of the entire industry. This graph tells the story. In past 30 years, European and American automakers have lost more than half of their value. And this does not even include the impact of the General Motors and Chrysler bankruptcies. In a normal world, in any other industry, if you saw charts like these the immediate reaction would be to say: “Give me the names of the guys who did this! I want them all out.”

Over the years, the auto industry has tried just about every trick in the book. We sold financial services, we bought financial services. We sold off suppliers; we brought suppliers back in-house again. Our industry has embarked on M&A sprees and excursions into other sectors. We have consolidated brands and consolidated companies and consolidated the consolidations. Yet most of these efforts were geared toward size alone, which is why they often failed. They made automakers into rambling ranch houses onto which one room after another was added with no rational architecture uniting the whole. Our industry got into businesses we did not know how to run and, in doing so; we created clumsy bureaucracies that impeded innovation in what should have been our core expertise: making cars that consumers want to buy.

But the tightening of credit, the closure of capital markets, and the storm that battered our industry directly have forced us to get smart and fix things before others do it for us. We have all been forced to face reality and the reality is that the conditions necessary to continue along the existing path
have changed fundamentally. Charting a better course demands that we rethink and redesign our business model around the central pillar of efficiency. And core to that model is the need to seek out new alliances. The transaction between Fiat and Chrysler was indisputably a response to these pressures. I believe our alliance is a perfect example of a profound transformation, in terms of both quantity and quality.

The primary benefit will be achievement of the critical mass necessary to produce adequate economies of scale. By increasing volumes for each architecture, in each main segment, we will be able to deliver economic returns that justify the levels of investment required. This in turn will enable us to expand geographically to take advantage of new market opportunities. From Fiat’s point of view, it was an incredible opportunity to come and participate in the North American market. The two businesses represent an ideal combination. The presence and experience of Fiat in the smaller car segments and of Chrysler in the medium and larger segments will enable the combined Group to offer a full range of products globally. The futures of Fiat and Chrysler are now inextricably intertwined, and both will reap enormous benefits from the relationship. By accessing Fiat’s pool of automotive architectures and powertrains, Chrysler will save months — realistically, even years — in development and testing, along with billions of dollars in investment. Fiat’s advanced fuel-saving technologies will give Chrysler a significant advantage toward meeting future regulatory requirements. By 2014, more than half of Chrysler vehicles will be built on Fiat-derived architectures. And over 40 percent of Chrysler will be fitted with powertrains which are either from Fiat or benefit from Fiat technology.

In turn, Fiat will benefit from Chrysler’s product strengths in minivans, Jeep® sport-utility vehicles, Ram pickup trucks and HEMI-powered large sedans by turning over responsibility for development of all large vehicles in its product portfolio to Chrysler. Chrysler’s all-new, state-of-the-art Pentastar V-6 engine will be shared with Fiat. This family of engines is more refined, more powerful and more fuel efficient than the seven existing V-6 engines in the Chrysler line-up that it will replace. The very first Pentastar V-6 rolled off the line at our brand new Trenton South Engine Plant in Michigan earlier this month.

Last month, we gave another example of the many opportunities the two groups can offer each other with the signing of a joint venture agreement with the Russian automaker Sollers, which represents a springboard for both Fiat and Chrysler in the Russian market. As a result of this partnership, we will have the capability to produce up to 500,000 vehicles per year by 2016 and to sell nine new models, six of which will be based on the new Fiat-Chrysler platform. The deal represents an enormous step forward for us both and it will position us, within just a few years, as the No. 2 automaker in that market.

The alliance between Fiat and Chrysler is a partnership in the truest sense — forged in mutual opportunity. It is growth with a purpose — growth that will create real value rather than merely inflating numbers. On that point, I would like to add something that I feel very strongly about. Some maintain that a transatlantic alliance is destined to fail, that Chrysler won’t succeed in Americanising Fiat and that Fiat in turn won’t be able to take over Detroit.

And they might be right, if that were our intention. But the relationship is about partnering, not patronising. It’s about listening, not dictating. Any alliance forged across cultures must be — because attempting to impose answers across cultures doesn’t just fail. It antagonises. It builds higher walls. By contrast, tearing down walls — an imperative on which not just the future of Fiat and Chrysler but the survival of our entire industry depends — demands humility and patience, learning and listening. It requires that each partner put national pride aside and seek to gain a deeper understanding of the other’s culture, tastes and expectations. That approach doesn’t always yield immediate results. But the results that are achieved will be longer lasting. And that is what we aspire to with the Fiat-Chrysler partnership.

The quality of this integration will depend on the style of leadership that we adopt. I am talking about leadership built on respect, on listening to others and on mutual esteem. A style of management which doesn't take the approach of “master of the world” but rather seeks to establish the ideal conditions for a true sharing of values and knowledge. This is the real challenge for us as leaders and it is also the only way to obtain the best result, a result which benefits everyone involved.

The presentation of our plan in November last year was entitled "From Chapter 11 to Chapter 1," as it represents a new beginning for Chrysler. It is our road map for creative reconstruction. The plan was distilled through five months of intense dialogue and discovery within the Chrysler organisation. No stone was left unturned, in what, at times, were gut-wrenching evaluations of exactly where we were positioned in the automotive food chain. The key points of our plan are, first, to align the Chrysler and Fiat organisations; second, to develop a product portfolio that is relevant to the majority of the market; and third, to rebuild the equity of our brands and the relationship with our customers.

When we unveiled our plans, many observers were quick to express their doubts. But we’re no strangers to scepticism — either at Chrysler or at Fiat.
When I arrived at Fiat in 2004, industry experts wrote many articles predicting our inevitable and imminent demise. We were being told, over and over again, that our restructuring plan was as impractical as it was optimistic. And yet, in 2008, Fiat posted the highest trading profit in its 109-year history of almost $5 billion. So when the sceptics began expressing doubts about Chrysler’s five-year recovery plan after our November 4th presentation, it was a song we had heard before and we were not fazed.
We are absolutely confident that the restructuring plan we announced in November places Chrysler on track to meet highly ambitious, yet achievable goals. We forecast that we would finish 2009 with a cash balance of $5 billion dollars. We have maintained that commitment, and in fact, we ended the year slightly north of that mark.

We intend to break even on an operating basis in 2010, with operating profit increasing steadily to $5 billion by 2014. During the same five-year period, we plan to approximately double our global sales to a total of 2.8 million units.
And when this rebuilding period is complete, we will have paid back every penny that Chrysler Group LLC has borrowed from the American and Canadian governments.

We have five years to reach these goals, which have been designed to put Chrysler on a sustainable path. Five years is the same amount of time that separated Fiat’s premature obituaries from a record-breaking resurgence. We’re moving rapidly to execute the Chrysler plan. Seventy-five percent of our vehicle line-up will be all-new or renewed by the end of 2010. For those who are keeping count, that’s 16 vehicles! And 100 percent of our line-up will be refreshed or renewed by the end of 2012.

The first tangible results of our historic alliance will be visible to the public as soon as December of this year, when the Fiat Cinquecento takes to American roads. This vehicle — which will be on display at our stand at the New York Auto Show — heralds the return of the Fiat brand to the United States after an absence of more than 25 years. It also heralds a new vision of technology’s role in the achievement of sustainable mobility. With its low fuel consumption and CO2 emissions, it is an ambassador of a genuine
concern for the environment and an approach to ecological responsibility whose time has come. We’ll make the Cinquecento even more environmentally friendly in 2012, when Chrysler begins production of a pure electric version for the U.S. market. Chrysler Group is the centre of expertise for electric technologies and the Cinquecento provides a perfect platform for integrating electric-vehicle technology. Yet another example of Chrysler and Fiat combining efforts for mutual benefit.

The importance of the role of dealers in this reconstruction process cannot be overstated. The development of a quality distribution network was a key element in the turnaround at Fiat. Chrysler also is making a major commitment to strengthening relationships with its dealers. Dealers are the ambassadors of our brands, and are crucial to the effort to re-establish links with our customers. We have redefined — and raised — the standards expected of our dealers, but we are also working with them to thoroughly implement those standards and support them in improving performance.

Our plan is to invest over $500 million dollars in the network over the next five
years. The ultimate goal is to turn more of our customers into loyal, repeat buyers, and promoters of our products and of our dealers. We are intent on protecting the health of our existing dealer network through the defined arbitration process. Accordingly, in an effort to move forward with a strong sales organisation, Chrysler Group offered letters of intent to 50 dealers to rejoin our network and sell Chrysler, Jeep, Dodge and Ram vehicles. These 50 dealerships are in locations that will benefit our customers, but not have an adverse effect on existing partners in our network. Reaching agreement will save both the dealers and the company the expense of arbitration. When we balanced the effects on our dealer network with the resources required by the arbitration process, these resolutions made sense.

Coupled with actions already taken, this step brings the number of dealers we’ve invited to be part of Chrysler’s future to 86. In total, this represents nearly 25 percent of the dealers who chose to arbitrate Old Chrysler’s decision to resize its dealer network to meet the market, an action that was affirmed by the federal courts as a reasonable exercise of the company’s business judgment.

I am well aware that the pride, sense of partnership, and desire to be a better performer that drives a dealer’s commitment to its customers depend heavily on knowing that their partner is solid and resourceful enough to execute on its commitments. And that is one reason why we have worked with such commitment to ensure Chrysler can move forward on a solid footing. At the same time, we recognise that a dealership is much more than merely a sales organisation. Our dealers are the face our customers see. They are the guarantors of our credibility, our representatives in both image and substance. It is indispensable, therefore, that we share our goals and a determination to pursue a course of continuous change. We need strong, competitive dealers that can work with us to enhance the reputation of our brands and make customer satisfaction a priority.

We’re in this battle together. We must put our trust in each other and make a true, full-faith effort. Collectively, we have learned from the past. But now is not the time to look in the rear-view mirror. Rather, we must focus on the road ahead.

Of course, it takes much more than just a good plan to guarantee success.
A company’s culture must enable it to adapt to survive turbulent times — and that starts with embracing the idea of constant and creative change. Bruce Springsteen showed us the power of change. Until “The Boss” came along and showed us a new way, almost every performer clung to a rather rigid structure. For more than a century, most forms of popular music relied on the same format: verse, chorus, bridge. Verse, chorus, bridge. Springsteen shunned this traditional structure. His approach was more fluid — form following function, the same philosophy Frank Lloyd Wright pursued in his architecture. To get a sense of the cultural transformation he brought us, you just need to listen to one of the great rock songs of all time “Thunder Road”, where Springsteen travels uncharted musical paths in a song fuelled by hope and the lure of the open road — somewhat appropriate to our own situation.
“We got one last chance to make it real,” Springsteen wrote. That sums up the urgency of where we are today.

The challenges faced by the auto sector are far from over. And the greatest of those challenges, which also happens to be the greatest of ironies, may be the fact that a recovery is approaching — and it could remove our industry’s foremost imperative for change while restoring our foremost excuse for inaction. This crisis has caused too much suffering for too many people not to be greeted with some celebration. I welcome the signs of macroeconomic recovery — stabilising incomes, loosening credit, consumer confidence that may be inching upward, or whose free-fall has at least ceased. But recovery, with apologies to Karl Marx, is the opiate of dysfunctional industries. What remains unclear is whether our industry will in fact survive. The grave danger of this moment is that we retreat into denial once more — that we mistake a better economic climate for better business models.

If we succumb to that delusion, the tragedy will be a double one — for not only will we hasten the automotive industry’s decline, we will also deprive the substantial suffering our industry has endured of any purpose. The philosopher Friedrich Nietzsche once said that “what really arouses indignation against suffering is not suffering as such, but the senselessness of suffering …”. And a crisis that does not result in enduring change, in fundamental change, will have been very senseless indeed.

I believe history will look to this moment, here and now, as the decisive one — the moment when we chose, finally, to remake ourselves as a muscular, viable, independent industry or when we were content to relax as a macroeconomic recovery concealed, for what would likely be the last time, deep and unsustainable structural flaws. The crisis has compelled us toward a path of creative reconstruction and transformation and if we persist, I am convinced it will be a path of rebirth as well.

Let me conclude with this thought.

It rarely happens in life that we are given a second chance. The crisis that battered the auto sector has already claimed some noteworthy victims. The shortcoming of several automakers is that they failed to react — out of either inability or apathy — to a world which has changed completely. Their failing was not having the resources or the courage to tackle problems at their core. Unfortunately, their day of reckoning arrived.

At Chrysler things have gone differently. Today — thanks to the alliance with Fiat — we have a second chance. We have the opportunity and determination to rebuild a strong industrial base. And we have broad enough shoulders to acknowledge and put right the structural handicaps which have shackled this industry for far too long. We have the will and the means to embark on a course of transformation and creative reconstruction. We can create an organisation whose future is not dependent on emergency intervention. An organisation which is solid and sustainable, upon which a viable future can be crafted. We have no intention of wasting this opportunity.

In my office in Auburn Hills, I have a poster with an excerpt from the President’s speech on April 30th last year, announcing the partnership between Fiat and Chrysler. It contains the words President Obama used to underscore Chrysler’s place in the American identity and to commit, in front of the entire nation, to giving it a new lease on life.

That poster and the words on it provide me with a daily reminder of the immense effort that the U.S. government has made and I am constantly mindful of the responsibility that we have. Personally, I am convinced that the commitment and energy that a challenge of this kind inspires, the passion that comes from knowing we are part of an historic undertaking, do more than compel us to maintain every one of our promises. They also cause us to grow as leaders and individuals and they give deeper meaning to our lives.

Thank you all.

[big_landau]

sound like they are doing ok,hopfully they get it together and start going ahead.id realy love to see chrysler the brand to take up v8 supercars i think that would be great and a much better option than toyota or nissan but that probably wont happen.