Latest Chrysler News

[MoparDan]

It's a go!

http://www.allpar.com/news/index.php...-this-morning/

Chrysler sale to take place this morning

June 10th, 2009
by Bill Cawthon
With the last legal obstacle overcome, Chrysler plans to close the sale of its “good� assets to NewCarCo Acquisition LLC by 9:00 AM Eastern Time today, clearing the way for it to exit bankruptcy.
To finalize the deal, Chrysler first must transfer $2 billion supplied by the Treasury to its creditors. The Supreme Court’s decision rejecting the challenges by the Indiana pension funds and consumer groups came after the deadline for making the necessary wire transfers had passed, requiring the sale to be put off until today.

[MoparDan]

From AllPar.
http://www.allpar.com/cars/adopted/f...-alliance.html

Chrysler-Fiat Alliance: Chrysler Group Reborn
by David Zatz, Organizational Change Consultant
The new Chrysler Group

Chrysler Group LLC now exists, 55% owned by a pension fund, 20% by Fiat, the rest by the U.S. Treasury and Canadian government. Contrary to published reports, Fiat will not own more than 20% of Chrysler at first, and will receive a maximum of 35% of equity unless they choose to buy more on the open market. The pension fund, which has no voting rights, plans to sell their equity as soon as it is economically feasible. These facts must be emphasized due to unreliable pundits’ hysteria over “union to control Chrysler� and “tax dollars spent to give Chrysler to Fiat.�
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That was the opening paragraph. More information in the article after that.

[MoparDan]

http://www.allpar.com/news/index.php...ion-announced/

MultiAir system production announced

June 15th, 2009
by DaveAdmin
Fiat will be fitting the Romeo MiTo with MultiAir engines and a start-stop system to increase gas mileage by shutting the fuel supply to the engine when the car is stopped, and seamlessly restarting the engine when needed. The 1.4 liter engine will be available in 105, 135, and 170 horsepower versions.
MultiAir engines have 10% more horsepower and 15% more torque than standard gasoline engines of the same design; they also reduce particulates and nitrides of oxygen dramatically.
MultiAir is a trademark for an electro-hydraulic valve control system currently used on gasoline engines, and planned for Fiat diesel engines.
Fiat is planning to share key technologies with Chrysler in the near term, and MultiAir is very likely to make it to mid-sized Chrysler Group vehicles as well as Fiats sold in the US [[regardless of branding).

[MoparDan]

http://www.allpar.com/cars/adopted/fiat/fiat-cars.html

Fiat Cars: Making Small Big Again

"Automotive News learned that Chrysler plans to use six Fiat models. One is the Fiat Panda Cross, a 1.3-liter-diesel powered off-road vehicle that gets nearly 40 mpg and would likely be sold as a Jeep in 2011 with a 1.2 or 1.4 liter gasoline engine."
================================================== ==
More information plus pics in the article.

[MoparDan]

http://www.allpar.com/news/index.php...loans-quickly/

Iacocca to Chrysler: Repay loans quickly

June 22nd, 2009
by Bill Cawthon
Lee Iacocca, Chrysler’s CEO the last time it needed financial help from Washington, says the new Chrysler needs to repay billions of dollars in federal loans as fast as it can.

Iacocca, now 84 and living in California, was not happy to see Chrysler under government control again, but admitted the alternative was probably liquidation. He said the government’s intervention and new influence should be a powerful motivator to get the loans repaid.
“They’re on you day and night. Their oversight is just too extreme,� Iacocca told the Associated Press. “That’s why our 10-year loan, we paid it back in three years. We couldn’t stand the government. The bureaucracy kills you.�
Iacocca went on to say he has faith in Sergio Marchionne, the new CEO of Chrysler Group and Fiat SpA, and he’s glad to see Ford, another of his previous employers, getting by without government aid. He added that he would invest in Chrysler if the stock was available and would invest in Ford, but he has reservations about General Motors. Iacocca says GM has more serious problems than Chrysler did.

[MoparDan]

Chrysler Labs Website back up & running
http://www.chryslertestservices.com/

Chrysler Scientific Labs and Proving Grounds is an industry leader in engineering, validation and testing services. With vast experience in automotive testing, we are uniquely positioned to understand and meet your specific requirements with an overall turn-key approach. Our highly skilled and experienced staff of engineers, mechanics and technicians, combined with state of the art testing facilities, offer unsurpassed capabilities allowing us to offer you premium customer service in engine and powertrain dynamometer testing, stress and durability development, energy management development, hybrid and electric vehicle battery testing, full scale aero-acoustic wind tunnel analysis and emission and fuel economy testing, in addition to more than 7,500 acres of proving grounds with over 150 "lane miles" of road.

Scientific Labs offers you:

• "One stop shopping" for virtually any testing need
• Secure, world-class facilities
• State of the art equipment
• Dedicated, experienced, and knowledgeable personnel
• Complete understanding of customer needs and requirements

[ccbatson]

Bankruptcy courts modify contracts...yes, in a controlled fashion determined by precedent and established legal pecking orders as to who is first in line and etc. Obama is trying to circumvent this process...in other words to circumvent the rule of law.

[MoparDan]

http://finance.yahoo.com/news/Judge-...2&asset=&ccode=

Judge OKs sale of most Chrysler assets to Fiat
NEW YORK [[AP) -- A federal bankruptcy judge late Sunday approved the sale of most of Chrysler's assets to Italy's Fiat, moving the American automaker a step closer to its goal of a quick exit from court protection.

Judge Arthur Gonzalez said in his ruling that a speedy sale -- the centerpiece of a restructuring plan backed by President Barack Obama's automotive task force -- was needed to keep the value of Chrysler from deteriorating and would provide a better return for the company's stakeholders than if it had chosen to liquidate.
"Any material delay would result in substantial costs in several areas, including the amounts required to restart the operations, loss of skilled workers, loss of suppliers and dealers who could be forced to go out of business in the interim, and the erosion of consumer confidence," Gonzalez wrote in his opinion.
"In addition, delay may vitiate several vital agreements negotiated amongst the debtors and various constituents."
As a result, the proposed sale must be approved in order to preserve the value of Chrysler's business and what is ultimately left for its stakeholders, Gonzalez said.
Chrysler has maintained that selling the bulk of its assets to Fiat Group SpA is the only way it can avoid selling itself off piece by piece. If a deal does not close by June 15, the Italian automaker has the option of pulling out.
But a trio of Indiana state pension and constructions funds, which own $42.5 million of Chrysler's $6.9 billion in secured debt, aggressively objected to the sale, saying that it does not provide a big enough return for secured debt holders, while paying off unsecured stakeholders, such as the United Auto Workers union.
The Indiana funds bought their debt in July 2008 for 43 cents on the dollar. Their attorneys have said they would appeal the decision to U.S. District Court if Gonzalez approved the sale.
As part of Chrysler's government-backed restructuring plan, a UAW trust that will provide health care for hourly Chrysler retirees will receive a 55 percent stake in the new company, while Fiat will get a 20 percent stake that can ultimately grow to 35 percent. The remaining 10 percent of the company will be owned by the U.S. and Canadian governments.
In the days leading up to Chrysler's Chapter 11 filing, the automaker struck a deal with the majority of secured lenders to give them $2 billion in cash, or 29 cents on the dollar, to erase the $6.9 billion in debt. But some of the debtholders balked and the automaker was forced to file for bankruptcy protection on April 30.
Besides the Indiana funds, a group of over 300 Chrysler dealers slated to lose their franchises under the company's restructuring also objected to the sale. A separate hearing to address Chrysler motion to terminate 789 franchises is scheduled for Wednesday.
Objections were also filed by the automaker's suppliers, former employees and people with product-related claims against the company.

[ccbatson]

Wouldn't surprise me for a Statist like Obama to target the opposition party.

[MoparDan]

And now, back to the news.
This from AllPar.
http://www.allpar.com/news/index.php...-drops-planes/

Dealers get another day to prepare; Chrysler drops planes

June 3rd, 2009
by DaveAdmin
Judge Arthur Gonzalez has delayed a hearing on Chrysler’s request to terminate 789 of its dealers until Thursday, to give dealers more preparation time; the Senate Commerce Committee is questioning Jim Press and Fritz Henderson about Chrysler and GM’s dealer-dropping plans today. While Chrysler plans to terminate 789 dealers’ franchise agreements, GM is planning to drop around 2,000 dealers in upcoming years.
Judge Gonzalez granted Chrysler’s request to cancel its leases on two Gulfstream aircraft, which are based near Auburn Hills. The leases were signed in 2007.

[ccbatson]

That's nice of the State....having second thoughts on the last election yet libs?

[MoparDan]

More on the dealership situation from Yahoo.
http://finance.yahoo.com/news/GM-Chr...3&asset=&ccode=

GM, Chrysler say slashing dealerships necessary

Chiefs of GM, Chrysler say they regret wholesale closing of dealerships, but had no choice

• Ken Thomas and Tom Raum, Associated Press Writers
• On Wednesday June 3, 2009, 8:52 pm EDT

WASHINGTON [[AP) -- Partners no more, bankrupt automakers and small-town car dealers who are being stripped of their livelihood brought the anguish of their sinking fortunes into the halls of Congress on Wednesday and sparred over the companies' plans to slash franchises nationwide.

"This is our last chance to get it right," General Motors Corp. President Fritz Henderson warned testy lawmakers. Countering GM and Chrysler LLC executives in a Senate hearing room, two dealers who are soon to have their franchises wrenched away appealed for help.
"I am the face of GM and Chrysler in my town," said Peter Lopez, a Spencer, W.Va., dealer unlucky enough to be selling the brands of both fallen automakers.
Russell Whatley, a Chrysler-Dodge-Jeep dealer in Mineral Wells, Texas, said his grandfather opened the business in 1919. "A 90-year investment is just gone," he said. He called Chrysler's actions "wasteful and devastating."
Lawmakers expressed sympathy for the dealers and some impatience with the automakers. But retrenchment is inevitable as taxpayer-supported GM and Chrysler fight to stay afloat once they emerge from bankruptcy protection.
Chrysler President James Press told the hearing of the Senate Commerce Committee his company was "working hard to achieve a soft landing" for dealers. But if underperforming dealers aren't selling cars, the company can't return to profitability, he said.
"I think `soft landing' is wishful thinking," Sen. Frank Lautenberg, D-N.J., said as committee members channeled a multitude of complaints from homestate dealers spurned by GM and Chrysler.
Committee Chairman Jay Rockefeller, D-W.Va., suggested both companies were abandoning customers and dealers.
"I don't believe that companies should be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves with no real plan, no real notice and no real help," Rockefeller told the automakers. "That is just plain wrong."
Those dealers "are looking into a black hole right now," while companies seem to be implying "that the dealers themselves are responsible for the companies' problems," Rockefeller said.
Henderson told the committee that 500 dealers had appealed GM's decision to sever ties. As of now, GM has reversed itself on 11 of them, he said. More than 2,700 dealerships are in line to lose their franchises.
"It's unbelievable how we have been treated." Lopez said. He said he had met every financial obligation put forth by Chrysler and GM but still "they want to shut me down."
The auto executives said there are too many dealers, with many representing the same company often competing with each other for sales. Many dealerships date to the 1940s and 1950s, when motorists lived farther apart and Detroit automakers led the world in sales, they said.
After hemorrhaging customers for decades and losing market share to foreign competitors, the two automakers said their companies need to scale back all their operations to become leaner and return to profitability.
Chrysler is expected to emerge from bankruptcy protection within the next few days. GM filed for Chapter 11 protection on Monday and its officials said they hope to be able to emerge as a new company in 60-90 days.
To save money, GM, perennially one of the biggest spenders in Washington on lobbying, said it has terminated contracts with a dozen lobbying firms it has used to help make its case in Washington. The company reported spending $2.8 million on lobbying for the first three months of 2009, $500,000 of which went to outside lobbying firms, according to the nonpartisan Center for Responsive Politics.
GM spokesman Kerry Christopher said the company would retain its in-house lobbyists, who work on health care, tax, trade, safety, environmental and other issues.
A GM statement also said the company's political committee stopped making campaign contributions to federal candidates in January and plans to continue the freeze all year.
Lawmakers argued that the dealership closings will put thousands of people out of work and offer few savings to GM or Chrysler, which have received billions of dollars in federal aid. The industry, in response, says taxpayers' investment is best protected by shedding unprofitable operations and strengthening the bottom line as fast as possible.
"It's not our place to change your decision," Sen. Kay Bailey Hutchison, R-Texas, told the auto executives. "But it is our place ... to make sure that everyone is treated as well as can be in these circumstances."
Chrysler has identified 789 dealerships it plans to close next week, about a quarter of the company's dealership network. Dealers received only three weeks' notice.
General Motors told 1,100 dealerships it does not plan to renew their franchise agreements in late 2010 and expects to shed an additional 900 dealerships through attrition and by selling or discontinuing its Hummer, Pontiac, Saab and Saturn brands.
Chrysler says its departing dealerships have resold or redistributed about 90 percent of their inventory and parts through a company program. But dealers being let go want the Obama administration to give them more time.
"We have an eight-month supply of vehicles and only three weeks to clear them out," Whatley told the committee.
GM said the dealers it's not renewing are being given until October 2010 to close.
Meanwhile, a group of Republicans distressed by the Obama administration's temporary nationalization of GM is proposing that congressional approval be required before money from the Troubled Asset Relief Program is used to buy a stake in a company.
The lawmakers complained that Congress had no opportunity to review the Obama administration's decision to take a 60 percent ownership of GM.
"General Motors needed a real bankruptcy, not a political bankruptcy," said Sen. Jim DeMint, R-S.C.
"We end up owning 60 percent of the stock and not a single vote was cast on that plan," said Sen. Mike Johanns, R-Neb. Johanns said the amendment, which they hope to consider Thursday, would apply to any money provided after May 29.
The third Detroit automaker, Ford Motor Corp., has not filed for bankruptcy protection and has not taken any federal bailout money. It has also not announced widespread dealership closings.
Car dealers are a potent political force, contributing more than $9 million to federal candidates for the 2008 elections.
Associated Press writers Jim Kuhnhenn and Alan Fram contributed to this report.

[ccbatson]

Why is the automaker so involved in the dealership operation. Aren't they privately owned franchises?

[mjs]

Why is the automaker so involved in the dealership operation. Aren't they privately owned franchises?

I asked somone in the industry that question. Where's the savings to the manufacturer? Its because the manufacturer needs to service the dealerships. Twice as many dealerships means more people in billing, more people confirming warranty claims, more people settling dealer disputes, and more people assisting the dealership with repairs. I assume the decisions regarding who will be cut will depend heavily on volume, how well they get along with the manufacturer, and location.

[lilpup]

Dealerships are the local public face of the manufacturer. If the dealership provides poor customer service or is shady or underperforming it hurts the manufacturer.

[mjs]

Exactly. Its why they put so much into the dealer support and why they are looking for a way to reduce what they spend on it without reducing the value of the service. If a manufacturer has to show each shop how to fix a warranty issue, it will take half as many reps if there's half as many shops. They can also eliminate the bad reps and the shops that struggle with doing what the reps tell them to do.

[MoparDan]

Dealerships are the local public face of the manufacturer. If the dealership provides poor customer service or is shady or underperforming it hurts the manufacturer.

I want to say my source was from an article on AllPar:
It basically stated that "too many dealerships competing for the same customers usually leads to the high pressure approach by sales personnel."

My own take is I can see where it would; at the same time, most people I know who are in sales of any sort usually have an "in-your-face" attitude on everything.
And quoting from a message I posted yesterday:
"The 25% of dealers being dropped accounted for 14% of Chrysler’s overall sales; but sales are not the entire story, because many of the dealers are competing directly with other Chrysler [[e.g. a Dodge dealer literally across the street from a Chrysler dealer). Much of this is a legacy of the days when Chrysler-Plymouth, Dodge, and, in particular, AMC/Jeep sold largely unique product lines."

We're going to see a lot of politicans & idealogues trying to play both sides of the fence on this:
They're going to complain that both GM & Chrysler need to trim down in order to be competitive; then they're going to complain when both of the companies actually do it. They'll wet their panties with glee when union workers take a hit but have a rash when non-union workers do.

There is no real cut & dried approach to this situation. And I hate to say a lot of good people are going to be out of jobs.

[ccbatson]

Competition done right results in better service at lower costs, not the opposite

[4real]

breaking news, sale blocked
Supreme Court makes the right decision to hold off on sale to Fiat
The country hasn't totally turned into socialism yet. A win for investors

[MoparDan]

http://online.wsj.com/article/BT-CO-...08-708555.html

Chrysler: Indiana Funds Will Lose Only $5M If Fiat Deal Approved


DETROIT [[Dow Jones)--The Indiana pension funds objecting to Chrysler LLC's acquisition by Fiat SpA [[FIATY) would lose about $5 million if the deal is completed.
The funds, which stalled the deal after appealing to the U.S. Supreme Court, would receive $12.2 million once the merger takes place, Chrysler disclosed in a filing. The funds spent $17 million to buy the auto maker's distressed debt.
Chrysler wants the Supreme Court to reject an emergency motion from the pension fund group to stop Chrysler from transferring its assets to a new company operated by Fiat.
The auto maker said it would be forced to liquidate if the deal is delayed beyond June 15.
Currently, the merger is on hold until 4 p.m. EDT to give the Supreme Court an opportunity to review the case. The court could issue a decision before then or let the deadline pass without a ruling. In that instance, the appeals court stay would expire and the sale could close late Monday.
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Chances are, if Chrysler is liquidated, they'll get nothing in the end. Then they'll want to sue someone. It's the American Way.

[MoparDan]

http://finance.yahoo.com/news/High-c...n&asset=&ccode=

High court blocks Chrysler sale to Fiat
Justice Ginsburg delays Chrysler sale to Fiat

WASHINGTON [[AP) -- Supreme Court Justice Ruth Bader Ginsburg has temporarily delayed Chrysler's sale to Fiat.

Ginsburg says in an order Monday that the sale is "stayed pending further order."
The action indicates that the delay may only be temporary.
Chrysler has said a delay could scuttle the deal.
A federal appeals court in New York had earlier approved the sale, but gave opponents some time to file an appeal with the Supreme Court.
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Note the statement, "The action indicates that the delay may only be temporary." This is window dressing as the sale will go through. Feasibility & practicality will win the day.

[ccbatson]

Pesky rule of law...it will take Obama and his cronies some time to break them and get away with it.

[mjs]

Pesky rule of law.

Alex, What is the phrase heard most often in the Bush White House?

[mjs]

Pesky rule of law...it will take Obama and his cronies some time to break them and get away with it.

Not if they use the attorneys that Bush and Cheney carefully selected from thousands of entries.

[MoparDan]

http://finance.yahoo.com/news/Fiat-c...n&asset=&ccode=

Fiat commits to Chrysler deal despite court delay

Fiat says it won't walk away from Chrysler deal despite US Supreme Court delays