Chrysler Sees 24 New Models, Isn’t Readying for Sale (Update1)
By Mike Ramsey
Jan. 11 (Bloomberg) -- Chrysler LLC, rescued from collapse by a $4 billion U.S. loan, will introduce 24 new models in the next 4 years and isn’t setting itself up to be acquired, Chief Executive Officer Robert Nardelli said.
The third-largest U.S. automaker is committed to being a “viable,” standalone company, Nardelli said in an interview today at the Detroit auto show. Cerberus Capital Management LP bought 80.1 percent of Chrysler from Daimler AG in August 2007.
“No one should read what we’re doing as if we are trying to position the company for sale,” Nardelli said. “Hibernation would be the furthest thing from the truth.”
After cutting 5,000 salaried jobs on Nov. 26, Chrysler is working to prove it intends to do more than use federal aid to keep operating while finding a buyer. Chrysler must demonstrate its viability to obtain the rest of a $7 billion loan request, Nardelli said. The company received $4 billion on Dec. 31.
Chrysler is working on a plan to cut its debt and negotiate concessions from the United Auto Workers union. Cash on hand fell to $2 billion to $2.5 billion at year’s end, from $6.1 billion on Sept. 30, Chief Financial Officer Ron Kolka said.
Advanced vehicles remain under development at the Auburn Hills, Michigan-based automaker even with the latest payroll cuts and executive departures including the purchasing and marketing chiefs and the leader of Chrysler’s parts division, President Tom LaSorda said.
“The stability of the leadership team is very, very solid,” LaSorda said in the interview at the North American International Auto Show in Detroit.
Chrysler may introduce three or four models this year that are either new or “redone,” LaSorda later told reporters at a news conference.
The company is “alive and well,” Nardelli said at the same event.
Chrysler’s sales fell 30 percent last year in the U.S., which accounts for almost three-fourths of global deliveries, and outpaced the 18 percent industrywide decline. To save money, Chrysler pared production capacity by 1.2 million vehicles and eliminated 32,000 jobs in 2008. Worldwide sales totaled 2 million.
All 30 Chrysler plants have been idled until at least Jan. 19 so dealers can thin inventories. The work stoppage further strains available cash in the month when revenue will be the lowest this year, Kolka said.
No GM Merger Talks
While Chrysler remains interested in mergers and alliances, especially those involving an exchange of products, there are no talks with General Motors Corp. about a merger, Nardelli said. GM ended negotiations on a possible strategic alliance in November.
“Those discussions are over,” Nardelli said.
The CEO said it’s “crazy” that GM, Ford Motor Co. and Chrysler haven’t had more product alliances and that Chrysler has “ongoing” discussions with the automakers about sharing technology.
Daimler hasn’t had any recent talks with New York-based Cerberus about disposing of its remaining 19.9 percent stake, Chief Executive Officer Dieter Zetsche said in a separate interview.
Daimler is open to restarting negotiations, Zetsche said today. The Stuttgart, Germany-based automaker said on Nov. 26 that Cerberus’s demands exceeded the value of the $7.2 billion the private-equity firm invested for its 80.1 percent stake.
To contact the reporter on this story: Mike Ramsey in Detroit at email@example.com