Post Tagged with: "Chrysler"

Chrysler crowns new King – Marchionne confirmed as post-bankruptcy Chrysler CEO;

May 7, 2009 at 12:51 pm

(Source: Autoblog via The Detroit News)

After weeks of speculation, Fiat confirmed today that its CEO, Sergio Marchionne, will assume the same role with Chrysler once it exits bankruptcy. According to statements from the Obama administration, Chrysler could emerge from “surgical bankruptcy” in as little as 30 to 60 days, after which Chrysler’s current chief executive Bob Nardelli will step down and Marchionne will step in. 

A dual Canadian and Italian citizen, the Ontario-educated Marchionne is credited with turning the Fiat Group around from a money-losing enterprise into one of the largest and most successful automakers in the industry. After taking over the helm at Fiat five years ago, Marchionne said he would need to double its sales to 5.5 million units annually in order to make the company financially viable. His vision for separating Fiat, Lancia and Alfa Romeo out of their parent company and into a new auto group together with Chrysler (and potentially with GM’s European and Latin America.

Read more Comments Off

Fiat woos German ministers in attempt to take control of Opel

May 3, 2009 at 9:53 pm

(Source: Timesonline, UK)

Fiat last night set out its blueprint to reshape the global car industry, outlining plans to spin off a new company that will include General Motors’ European business and Chrysler.

 The Italian car manufacturer meets German ministers today to set out a plan that would bring GM’s Vauxhall, Saab and Opel into a company with Fiat’s core car marques, including Fiat, Alfa Romeo and Ferrari.

The company said last night that the possible new company, which would be floated, would have revenues of €80 billion (£71 billion) and an output of between six million and seven millon vehicles a year, which Fiat believes will give it the necessary scale to weather the crisis besetting the automotive industry. The proposed company would be the second largest car group in the world.

In Britain, unions have hinted that a Fiat takeover of Vauxhall would put at risk 5,000 jobs at Luton and in Cheshire. GM employs 300,000 workers worldwide.

GM has struggled to find a buyer for its non-core businesses as it seeks to avoid following Chrysler into bankruptcy. But Fiat faces some German opposition over its ownership of Opel, GM’s German subsidiary.

Sergio Marchionne, the chief executive of Fiat, will today meet the Economy Minister and the Foreign Minister of Germany. Karl-Theodor zu Guttenberg, the Economy Minister, warned that the German Government required a long-term strategy.

In an interview with a German newspaper, he said: “We will not enter into any financial adventure with taxpayer money. The concept must clearly show that Opel plants in Europe that are to be kept open will be secured over the long term.”

Angela Merkel, the German Chancellor, has suggested the German Government could offer loan gaurantees to help safeguard jobs at Opel.

Fiat wants to acquire Opel after its eleventh-hour deal last Thursday to buy an initial 20 per cent of Chrysler. The company believes that it needs a partner to reach the scale of production necessary to weather the crisis besetting the motor industry.

Fiat’s overtures to Opel quickly follow its agreement to enter a partnership with Chrysler after it emerges from bankruptcy. Fiat will share its fuel-efficient technology in return for gaining a stake that will eventually turn into a majority holding in the company. Chrysler filed for bankruptcy after creditors refused to accept a restructuring deal.

In its desperation to avoid following Chrysler into administration, GM has been attempting to offload its unprofitable, non-core assets.

Read more Comments Off

Chrysler to File for Bankruptcy Following Collapse of Negotiations; President Obama to address the nation

April 30, 2009 at 9:45 am

(Source: Washington Post)

Chrysler, one of the three pillars of the American auto industry, will file for bankruptcy today after last-minute negotiations between the government and the automaker’s creditors broke down last night, an Obama administration official said.

 U.S. officials had offered Chrysler’s secured lenders $2.25 billion in cash if they would agree to writedown the $6.9 in secured debt that the company owed. But a small group of hedge funds refused the 11th-hour deal, forcing an imminent bankruptcy.

An administration official this morning expressed disappointment, saying the holdouts had failed to “do the right thing,” but that “their failure to act in either their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat and its stakeholders, nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward.”

President Obama is scheduled to address the issue at noon today at the White House.

As talks broke down late last night, it became near certainty that the Obama administration would send Chrysler into bankruptcy under a plan that would replace chief executive Robert L. Nardelli and pump billions of dollars more into the effort, all in hopes that the company could emerge from court proceedings as a re-energized competitor in the global economy.

The U.S. government’s attempt to save the automaker amounts to another extraordinary intervention in the economy and a landmark event in the history of the American auto industry.

Under the administration’s detailed plan for a “surgical bankruptcy,” ownership of Chrysler would be dramatically reorganized, the leadership of Italian automaker Fiat would take over company management and the U.S. and Canadian governments would contribute more than $10 billion in additional funding.

Negotiations between the government and the company’s stakeholders — Chrysler’s lenders, the union and proposed merger partner Fiat — went well into the night, as dealmakers rushed to meet President Obama’s April 30 deadline.

Last night, the United Auto Workers union overwhelmingly ratified the administration proposal to give its retiree health fund the 55 percent equity stake in Chrysler. In exchange, the health fund must give up its claim to much of the $10 billion that Chrysler owes it. Eighty-two percent of production workers and 80 percent of skilled-trades workers voted for the agreement.

While four of Chrysler’s major creditors — J.P. Morgan Chase, Citigroup, Goldman Sachs and Morgan Stanley — have agreed to the Treasury’s plan, other lenders, mainly hedge funds, had held out. The holdouts included Oppenheimer Funds, Perella Weinberg Partners and Stairway Capital, two sources said. The last two have funds that invest in “distressed” companies. It is not known what companies ultimately failed to reach agreement with the government.

The hedge funds likely think they could get a better return in a bankruptcy filing or in a sale of Chrysler’s assets, said Sheldon Stone, a turnaround expert at Amherst Partners. The government offer made yesterday would represent a recovery of about 32 cents on the dollar. A recent Standard & Poor’s analysis said the lenders could recover 30 to 50 cents on the dollar.

Read more Comments Off

Put a fork in it? Obama planning to announce Chrysler bankruptcy tomorrow

April 29, 2009 at 6:35 pm
According to a report by Bloomberg citing the usual unnamed sources, President Obama will announce tomorrow that Chrysler will file for Chapter 11 bankruptcy while continuing to work on its alliance with Fiat.

Bloomberg‘s source made it clear that the there are still several loose ends and the plan “is not finished yet,” but it will likely involve Chrysler’s strongest assets being bundled and sold to a new entity. In that scenario, Fiat would become a 20% owner of the Auburn Hills-based automaker, the UAW retiree health-care trust would take a 55% percent stake and the government would gobble up the rest. Essentially, it’s the same out-of-court deal initially proposed, but now, with all the benefits (and hurdles) of bankruptcy protection. 

As part of ongoing negotiations, the U.S. Treasury raised its offer to Chrysler’s lenders, offering them $2.25 billion in cash to forgive $6.9 billion in secured debt, two other people familiar with the matter said. The previous offer had been for $2 billion in cash.

One issue remaining is the U.S. government’s effort to combine Chrysler Financial and GMAC LLC, the lending units affiliated with Chrysler and General Motors Corp.

The idea is to ensure that Chrysler has a well-capitalized credit arm, as required by Obama’s automotive task force, said people familiar with the situation.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., has expressed concern that such a combination would involve her agency guaranteeing its debt, according to two people familiar with her views.

(Source: Bloomberg & Autoblog)

Read more Comments Off

Breaking News: Chrysler and Union Agree to Deal Before Federal Deadline

April 27, 2009 at 12:31 am

(Source: New York Times)

Union leaders said Sunday that they had reached an agreement with Chrysler that meets federal requirements for the automaker to receive more financing.

The deal includes Fiat, the Italian automaker with which Chrysler was ordered by the government to form an alliance before Thursday.

Neither the United Automobile Workers union nor the company released details of the tentative agreement, which would modify the union’s 2007 contract and reduce the amount of money Chrysler must pay into a new health fund for retirees.

Image: New York Times

The union plans to have its 26,000 Chrysler workers vote on the deal by Wednesday.

Chrysler said the agreement, reached during marathon negotiations over the weekend, satisfied the requirements laid out by the Obama administration for a deal by an April 30 deadline.

Even with the agreement, Chrysler is expected to seek Chapter 11 protection, in a case mapped out by the government in advance, including safeguards meant to protect worker benefits, people with knowledge of the company’s plans said Sunday night.

A new company would be set up with the best assets of Chrysler, these people said. Fiat of Italy would own 20 percent to 35 percent of the new Chrysler, they said, with the government also holding a stake. Some of the equity in the new company would also be given to Chrysler’s creditors as repayment.

These people spoke on condition of anonymity because the deals had not been finalized.

The Treasury Department has also reached an agreement with Daimler of Germany, the former owner of Chrysler, to settle tax and other claims left over from its sale of Chrysler in 2007 to Cerberus Capital Management, the private equity firm.

In order to persuade the union to back the sale to Cerberus, Daimler agreed to pay $1 billion to Chrysler if the company’s pension plans were terminated in a subsequent bankruptcy filing. Details of the Treasury’s deal with Daimler were not available.

Last week, the union reached an agreement in principle with the administration and Chrysler that would protect workers’ pensions in the event of a bankruptcy filing and provide for a change in the financing of a health care trust set up in 2007.

Click here to read the entire article.

Read more Comments Off

Scoopful of Chrysler News – April 25, 2009: Signs of life; ticking clock; debt reduction; Fiat magic; No love from Hyundai

April 25, 2009 at 12:34 am

(Source: CNN; TreeHugger; Jalopnik ; Autoblog ; AutoblogGreen)

Chrysler reaches key Canada labor accord Tentative agreement, aimed at cutting costs and keeping automaker out of bankruptcy, to be presented to workers for ratification.

 Time running out on Chrysler  The embattled automaker has one week to reach deals with Fiat, unions and banks, raising doubts it can avoid bankruptcy and a shutdown. 

Chrysler lenders will cut debt – source  The automaker’s first-lien lenders will reduce remaining debt to $3.75 billion from nearly $7 billion. 
Fiat Working on Advanced Hybrid Drivetrain for Small Cars…Technology with Chrysler According to an article in an Italian magazine (via our friends at ABG), Fiat is working on a hybrid drivetrain that could be fitted to its small cars, like the Fiat 500. But even more interesting for us North-Americans, Fiat would apparently be willing to share that hybrid technology with Chrysler, if the deal between t…

Fox Car Report Live: Ford Fiesta, Chrysler Bankruptcy [Official Car Pundit Drinking Game] …imaginary Chryslers on conservative cable channel website. [Fox Car Report Live]

PSA: In case you were wondering, Hyundai apparently has no interest in taking a stake in a bankrupt GM…Motors and Chrysler called off negotiations regarding a possible merger, news began circulating across the internet that Hyundai might be interested in snatching the Pentastar brand away from Cerberus. Those rumors were flatly denied by the Korean automaker.Now that things have gotten progressively worse for the two storied American companies, m…

Chrysler now taking orders for Peapod NEV, or so we hear …d think Chrysler wouldn’t want to limit any potential income sources these days, but what do I know about running a car company. We’ve put in a call to Peapod to see what the deal is and will let you know if we hear anything. For now, we can remind anyone who’s interested in plunking down $12,500 or so that the Peapod is a zero tailpipe emission…
Read more 1

Signs of life! Chrysler reaches key Canada labor accord

April 25, 2009 at 12:09 am

(SSource: Reuters via CNN)

Tentative agreement, aimed at cutting costs and keeping automaker out of bankruptcy, to be presented to workers for ratification.

Chrysler LLC and the Canadian Auto Workers (CAW) union reached a tentative agreement Friday on a new labor contract intended to cut costs and keep the struggling automaker from bankruptcy, the union said.

The deal, which will be put to CAW-represented workers for ratification this weekend, is one of several agreements that Chrysler needs to reach by next week to win new U.S. government aid and avoid liquidation.

“We were told by Chrysler that they still didn’t have entire deals done to avoid a bankruptcy filing. We urge all the stakeholders in the United States to make equal sacrifices,” CAW President Ken Lewenza told reporters.

Chrysler, which has been kept operating since the start of the year with $4 billion in U.S. government loans, has until the end of this month to clinch an alliance with Italy’s Fiat SpA and win concessions from its bank creditors and major unions or face a cutoff of its government funding.

“We are extremely grateful to the CAW leadership and to its hard-working members for their openness in this challenging environment to create a new strategy that will lead this company on a path to success,” Chrysler vice chairman Tom LaSorda said in a statement.

The tentative contract for Canadian autoworkers with the No. 3 U.S. automaker would leave hourly base pay intact but cut a range of benefits, including an annual Christmas bonus, and add flexibility to work rules that would make it easier for Chrysler to hire temporary workers.

Chrysler will also cut the third production shift at its Windsor, Ontario, minivan plant.

Taken together, the contract changes will save Chrysler an estimated C$240 million in annual labor costs, Lewenza said.

Click here to read the rest of the article.
Read more Comments Off

Michigan Attorney General pleads for automakers to declare bankruptcy in state

April 23, 2009 at 10:28 pm

 (Source: Autoblog & Detroit Free Press)

As in a basketball game when players are yanking on jerseys trying to block each other out under the basket, General Motors and Chrysler’s creditors have officially begun jockeying for position. 

Michigan’s Attorney General, Mike Cox, has sent letters to the CEOs at both companies to ask that, if they file for bankruptcy, they do it in Michigan. Why? Because that would be more convenient to the creditors that GM and Chrysler have in Michigan.

“I am gravely concerned about the impact of any bankruptcy filing in a jurisdiction outside Michigan,” Cox wrote in separate letters to GM CEO Fritz Henderson and Chrysler CEO Bob Nardelli. 

Cox goes on to say that the financial health of both companies and Michigan have been intertwined for decades.

The state is a significant creditor for each of the troubled automakers through the Michigan Business and Single Business Tax obligations, workers’ compensation claims, unemployment insurance and environmental regulations. 

“The costs for many of these creditors (in Michigan) to participate in a New York or Delaware bankruptcy is overwhelming and would undoubtedly lead to unjust bills,” Cox said.

While Cox does not say that either company should file for bankruptcy, neither does he acknowledge that they might not need to if they meet certain criteria set by the U.S. Treasury Department.

“If you ultimately decide to choose bankruptcy as the vehicle to a stronger (company), I respectfully ask that you and your representatives meet with me before any filing is made,” the letter concludes. “Please feel free to contact me at any time, day or night, to discuss this matter.”

Here is the AG’s letter to GM.  A similar letter was delivered to Chrysler. 

Read more Comments Off

Sources: Chrysler Financial Refused Government Loan Over Limits on Executive Pay

April 20, 2009 at 4:35 pm

(Source: Washington Post)

Top officials at Chrysler Financial turned away a $750 million government loan because executives didn’t want to abide by new federal limits on pay, sources familiar with the matter say.

The government had been offering the loan earlier this month as part of its efforts to prop up the ailing auto industry, including Chrysler, which is racing to avoid bankruptcy. Chrysler Financial is a vital lender to Chrysler dealerships and customers.

In forgoing the loan, Chrysler Financial opted to use more expensive financing from private banks, adding to the burdens of the already fragile automaker and its financing company.

Chrysler Financial denied in a statement that its executives had refused to accept new limits on their pay.

The company’s decision comes amid a firestorm on Capitol Hill and elsewhere over the lavish pay of executives at companies being aided by government money. The uproar has made companies skittish about taking federal aid and hindered the Obama administration’s effort to revive lending by replenishing the coffers of the nation’s financial firms.

The Treasury Department previously had loaned Chrysler Financial $1.5 billion, when less stringent requirements on executive compensation were in place for recipients of federal bailout money. Since that first loan was announced on January 16, the Obama administration and Congress have toughened the rules.

During March, when it seemed that the first loan would run out, the Obama administration began working on a deal to lend the company another $750 million.

Click here to read the entire article.
Read more Comments Off

Chrysler enters the Electric Vehicle fray with sizzling hot Dodge Circuit

April 16, 2009 at 4:36 pm

(Source: AutoBlogGreen, CNNMoney)

Dodge Circuit, a two-seat roadster, could be Chrysler’s first step into electric cars, provided the company survives.

A battery-powered 268-horsepower two-seat sports car is in line to become Chrysler LLC’s first electric car, provided the carmaker lives to see another day.   

To survive, help is needed from Italy’s Fiat but, as negotiations with the Italian automaker bog down and the two week deadline to hammer out a partnership approaches, the company’s future – as well as its aspirations for an electric hot rod – are increasingly in doubt.

Chrysler’s first electric car, set to be introduced late next year around the same time as General Motors’ Chevrolet Volt, will be a sports car with a zero-to-60 time of under five seconds and a top speed of 120 miles hour.

It looks like the Dodge Circuit EV may have won the “who wants to be the first electric Chrysler concept to go into production” contest. Although they still haven’t officially made an announcement, Chrysler’s viability plan did list an “EV Roadster” as part of their 2010 product line. Based on the lightweight Lotus Europa and using drivetrain parts pilfered from UQM, the concept drew some fairly positive responses when it took on the newDodge Challenger in an impromptu drag race and later, when it got its crosshair makeover. Its 150 to 200 mile range is significantly higher than many other electric vehicles in the works and should add to its appeal.

“To be able to meet a 2010 timeline, you have to be pretty far along in development, and right now we are,” said Lou Rhodes, head of Chrysler’s electric car program, in a recent CNNMoney.com interview.

The Circuit is similar to the Tesla Roadster, a $109,000 sports car produced by a small California company. Pricing for the Circuit has not been announced but will likely undercut the Tesla.

Read more 1
1 2 3