Chrysler News

[MoparDan]

http://www.allpar.com/news/index.php...asset-auction/

Chrysler seeks quick asset auction

May 3rd, 2009
by Bill Cawthon
On Monday, May 4, Chrysler LLC will file a motion to sell most of its assets to a new company managed by Fiat SpA.
In a bid to keep its time in bankruptcy short, the Detroit automaker will ask the U.S. Bankruptcy Court in Manhattan to approve an alliance with Fiat and schedule an auction within three weeks. The company hopes Judge Arthur Gonzales will require objections be filed by May 11 so the auction can be scheduled for May 22.
The new company would bid $2 billion for most of Chrysler’s assets and assume some liabilities. The remainder of Chrysler’s assets, including an estimated eight plants, would be sold off through traditional Chapter 11 channels. Fiat CEO Sergio Marchionne is reported to be reviewing all of Chrysler’s assets, looking for “white elephants� to unload.
The new company will be owned by the UAW’s Voluntary Employee Beneficiary Association [[VEBA), Fiat and the U.S. and Canadian governments. Cerberus Capital Management will not have any stake and, contrary to many statements, the United Auto Workers union will not have any direct ownership of the new company as the VEBA is an entirely separate organization with an independent board of directors.
President Obama has given Chrysler 60 days to complete an alliance with Fiat.
Chrysler’s holdout creditors still could present a challenge to the quick exit plans by objecting to the auction but it is not certain they would prevail, considering the pre-auction Treasury offers of about $0.33 cents on the dollar for Chrysler’s $6.9 billion debt.

[MoparDan]

Released this morning.

http://www.allpar.com/news/
Chrysler cash from stock sale?

May 4th, 2009
by DaveAdmin
Fiat has answered the question of how the company planned to finance its takeover of Opel at the same time it would presumably need to invest funds into Chrysler. The company now plans to take over GM Europe and create a new corporation, which would be listed on a yet-unspecified stock exchange, combining Fiat, Opel, Saab, Vauxhall, and its share of Chrysler. In return for keeping most of GM Europe’s plants running, Fiat has asked for around $7-9 billion in financing from countries with Opel and Fiat plants. The new company would keep GM as a minority shareholder, and would help to counter the flood of imports from Japan, Korea, and, eventually, China. However, it would take over Opel without taking on Opel’s debts.
Fiat Group would retain Ferrari and Maserati. [[information from Automotive News)
Obstinate creditors seek secrecy

May 4th, 2009
by DaveAdmin
Chrysler creditors who are seeking to avoid the quick sale of the “good assets� are now trying to keep their companies’ names secret, with an attorney claiming that he has received death threats, according to the Detroit News. Perhaps more to the point, some investors have already started pulling their funds from the companies that helped send Chrysler into bankruptcy, with Oppenheimer Funds being the most visible. Michigan’s legislature has decreed that the state will divest from the three lead funds that held out for more cash, angrily claiming that retirees and auto workers were being put ahead of banks and hedge funds. Presumably, if the names of all the creditors now challenging the Treasury plan were exposed, they could also face financial repercussions.

And the beat goes on!

[FlyingJ]

Thanks for the headache, MoparDan. Doesn't Granholm & Obama realizes who owns these hedge funds? Yup, retirees & pension plans! Death Threats? This is Calico Cat eating Gingham Dog type stuff & Won't End Well, I'd bet a Coney on it.

[MoparDan]

Thanks for the headache, MoparDan. Doesn't Granholm & Obama realizes who owns these hedge funds? Yup, retirees & pension plans! Death Threats? This is Calico Cat eating Gingham Dog type stuff & Won't End Well, I'd bet a Coney on it.

No problem! I'll keep postin' 'em as long as they keep writin' 'em!

[4real]

Probably union goons.

Who will loan money in the future to these companies?

Who will risk their investment money when the Marxists in the government
decide to screw the legal process and decide who gets money and who doesn't.

Granholm and her fuckhead comments about the hedge funds will definitely slow investment into this state.

Wait until the suppliers are out of business.
Will all the parts be shipped in from mexico and china?
Nightmare for suppliers: Chrysler shutdowns, Chapter 11 hit hard

20 companies are owed over 340 million! thats only 20.
Another five years and SE Mich may recover from this.
http://www.crainsdetroit.com/article/20090503/FREE/30503996

[raptor56]

I was wondering how on earth Fiat, who nearly went under 2 years ago, is suddenly able to rapidly expand like this, knowing they don't have much money in the bank, and Chrysler alone is going to require substantial dumpings of cash money to keep its nose above water. Now I think I have it figured out. Fiat has Chrysler go into a quick bankruptcy. The parts Fiat needs becoems NewCo and the rest, including debt, sticks with OldCo. This way, when the companies merge or partner [[whatever they call it now), Chrysler is devoid of any debt, and only owns the plants it needs to survive. Once this happens, Fiat only needs to pay operating expenses and not debt expenses, which are a heck of allot cheaper. Next they try to buy GM Europe\Opel for a bargain basement price, and "encourage" Euro countries to give them $9 billion dollars or they'll move plants to Mexico [[despite the swine flu). If this all works out for Fiat, they could potentially jump way up on the Fortune 500 list. However, given the current world economy, and the very luke warm sales a new Chrysler is going to start off with [[consumer fears of the company and the car warranty going under), there is still a huge risk in this project if Fiat's pockets are as shallow as everyone believes. You're either going to see the birth of a major automaker, or the excruciatingly painful and fiery death of Chrysler, Fiat, Saab, Opel, and possibly the rest of the Fiat Group.

[MoparDan]

I have no sympathy for hedge funds whose primary purpose appears to be shorting companies into bankruptcy. In addition, they're usually only open to a certain number of wealthy investors, IE, not you or me. To top it off, regulating their activities is non-existent. So, they can all burn in hell for all I care.

[MoparDan]

http://www.allpar.com/news/

New 2010 and 2011 models will be delayed
May 4th, 2009
by Bill Cawthon
Bankruptcy and balky suppliers are likely to delay the introduction of new models for the 2010 and 2011 model years.
Testifying at a bankruptcy hearing in Manhattan, Frank J. Ewasyshyn, Chrysler’s executive vice president of manufacturing, said model break will be delayed when production is resumed to allow the completion of vehicles on the lines at idled plants. Model break, when equipment is changed over for the new model year, normally happens in July, which is about when the new Chrysler hopes to emerge from bankruptcy.
Ewasyshyn also said some suppliers are reluctant to send the tooling and parts that must be validated for the 2011 model year. The company has received approval to pay the majority of supplier invoices which hopefully will quieten some supplier anxieties.
The new models affected include the 2010 Dodge Ram heavy-duty trucks and the 2011 Jeep Grand Cherokee, possibly the most important introduction on the Chrysler calendar.

Court okays Chrysler payments to dealers and suppliers

May 4, 2009
by Bill Cawthon
Judge Arthur Gonzales approved $4.6 billion in debtor-in-possession financing allowing Chrysler to pay its dealers and suppliers and to give Chrysler time to finalize its alliance with Fiat.
The U.S. Treasury will supply $4.1 billion of the funding with another $400 million coming from New York banks that already banks hold about $4 billion in Chrysler debt. The balance will be realized from the sale of inventory on hand at Mopar.
Chrysler will use $1.49 billion to pay suppliers for components delivered ahead of the automaker’s bankruptcy filing. That will cover the majority of the $1,71 billion currently owed. An additional $753 million will be used to pay for sales incentives owed to dealers for sales prior the filing.
A minority group of investors, accounting for about $3 billion in Chrysler debt, strongly opposed the decision claiming the company’s net worth would be diminished if the alliance fails to be sealed.
competition in Edmunds testing



Ram tops competition in Edmunds testing
May 4th, 2009
by Bill Cawthon
The new Dodge Ram 1500 beat its full-size competitors from Ford, GM and Toyota in a head-to-head comparison set up by online auto resource Edmunds.com.
Edmunds said the field was filled with all-new trucks, making this a good time to see which one had the right stuff. Following two weeks of trailer towing, highway cruising, camping and off-road adventures, the Edmunds staff made their decision.
“After all the points were tallied, the Dodge Ram takes the win with a very well-rounded performance,� wrote Dan Edmunds, director of vehicle testing. “We knew from previous experience that the Ram’s coil-spring rear suspension works well when the truck is unloaded, but this time we found it has the chops to handle a trailer, too. The superior lateral stiffness of a five-link rear axle and a rear antiroll bar keep things from getting all swimmy while towing, even when we’re late for lunch and with a winding road between us and a burrito plate. Later, the burritos stayed down because the Ram 4×4 is best at smoothing out washboard tracks and putting the power down in sand, as you don’t get the insistent rear-axle hammering of leaf-spring rear suspensions.�
To read the entire article, check out Inside Line at Edmunds.com.

[Danny]

Chrysler is DEAD! Let us move on with the Big TWO. Oh! I've forget. General Motors is going to DEAD by June 1st 2009. Let us move on with the Big ONE.

This is truly THE END OF DETROIT!

[MoparDan]

Chrysler is DEAD! Let us move on with the Big TWO. Oh! I've forget. General Motors is going to DEAD by June 1st 2009. Let us move on with the Big ONE.

This is truly THE END OF DETROIT!

If you don't like the topic you're not obligated to read or participate, plain & simple.
Otherwise I'll post news as it comes up.

[mjs]

The model delay got me thinking of something they mentioned on a show I saw on fuel efficiency. One of the Managers from an automotive research center commented that there have been numerous achievements in engine efficiency, but that they don't improve gas mileage because they get used to make the engines more powerful. I can understand that the consumer cares if they have a V6 or a V8, but does it really matter to vehicle sales if the vehicle has 310 hp or 320 hp? Do most consumers even know the displacement or horsepower of their engine?

It matters because the more they change the engines the more it will cost to produce the vehicles. Is it really a necessary cost? Why can't they keep costs down by simply changing the appearance and use the savings to price the vehicle to improve market share? And didn't GM have a big drive to bring inventory and supplier costs down by making parts such as steering columns common between models? Why did that effort fail?

[MoparDan]

The model delay got me thinking of something they mentioned on a show I saw on fuel efficiency. One of the Managers from an automotive research center commented that there have been numerous achievements in engine efficiency, but that they don't improve gas mileage because they get used to make the engines more powerful. I can understand that the consumer cares if they have a V6 or a V8, but does it really matter to vehicle sales if the vehicle has 310 hp or 320 hp? Do most consumers even know the displacement or horsepower of their engine?

I seriously doubt the majority of consumers know any engine specifics to be quite honest. The difference of 10hp probably depends on the person. If most people understood torque numbers, that may influence purchases, particularly in the area of SUVs or Minivans. If a potential customer was told he/she could haul seven passengers or cargo with good acceleration merging into traffic because of the torque, I believe that would be one determining factor in a purchase. The adage of "Horsepower sells cars, torque wins races" comes to mind; HP numbers sound impressive because one can envision this huge team of horses hauling ass. Where consumers don't understand/care about torque, professionals fully grasp the importance of it. If they're hauling equipment or cargo for a living, they depend on it.

It matters because the more they change the engines the more it will cost to produce the vehicles. Is it really a necessary cost? Why can't they keep costs down by simply changing the appearance and use the savings to price the vehicle to improve market share? And didn't GM have a big drive to bring inventory and supplier costs down by making parts such as steering columns common between models? Why did that effort fail?

I don't recall that program by GM. We all know that interchangeable parts is nothing new, but it does appear there isn't much between model lines. It seems in the "old days" there was more of a conscientious effort for a certain amount of commonality among a maker's vehicles. From my experience with Dodge B-bodies, my Charger can use God knows how many parts of yrs 1971-74 from at least three other models including a certain amount of E-Bodies. It could be what we used to call the "Brother-in-Law effect" in the military: "Yeah, I can sell you this whiz bang system. But when it comes to replacing this special bolt, you'll need to see my brother-in-law because he's the only one who makes it". It was a way for both the primary & sub-contractor to make money well after the sale. That's just one angle.

[MoparDan]

http://www.allpar.com/news/

Next Chrysler CEO faces pay cap

May 6th, 2009
by Bill Cawthon
Under U.S. Treasury rules governing the loans made to auto companies, the next Chrysler CEO may be limited to $500,000 in total annual compensation and will be eligible for stock awards that can be transferred only after the new automaker repays all government loans.
That’s still a $499,999 raise compared to the dollar a year that was being paid to current CEO Bob Nardelli but it’s just a fraction of the millions that were paid to Tom LaSorda, Ford CEO Alan Mullaly and former GM CEO Rick Wagoner, not to mention the fortunes paid to those Wall Street financiers who got $750 billion from the government with minimal oversight.
The new CEO won’t be the only one on short rations; the top 25 executives will also have to agree to pay limits and waive their rights to sue over the reduced compensation.


New Chrysler incentives delayed

May 6th, 2009
by Bill Cawthon
Chrysler has had to delay a new incentive program and the kickoff of a new marketing campaign.
The incentives, which were to replace the Employee Pricing Plus Plus program that ended yesterday, could be announced as soon as next week and the new “Come see what we’re building for you� campaign could get underway at the same time if Chrysler can get approval from the bankruptcy courts.


Laid-off workers lose severance pay

May 6th, 2009
by Bill Cawthon
The Detroit News is reporting that salaried Chrysler workers who were laid off in the restructuring before the company filed for bankruptcy protection have lost their severance pay. Workers who accepted lump-sum buyouts are not affected.
Chrysler spokesman Mike Palese said the money allocated for severance payments is considered part of the company’s assets and therefore must be paid to creditors.


Michigan files objection to Chrysler sale

May 6th, 2009
by Bill Cawthon
Late yesterday, the Michigan Workers’ Compensation Agency and Funds Administration attempted to stop Chrysler from selling its assets. In a legal brief, Mike Cox, the state’s attorney general, said Chrysler’s plan to abandon its $140 million obligation could bankrupt the fund that supports employees who are injured on the job.
Chrysler, like most large companies, does not have outside workers’ compensation insurance. It is self-insured. Should the company become unable or unwilling to meet its obligations, the state fund could become insolvent, leaving injured workers without resources.
Corinne Ball, Chrysler’s lead attorney in its bankruptcy case, said the automaker is committed to operating within the law and wants to honor its obligations. A Chrysler spokeswoman said the company is already working with the state agency but did not give any specifics.
Judge Arthur J. Gonzalez said he would rule later on the state’s objection but declined to postpone the May 27 approval date for the sale.



Chrysler sale approved

May 6th, 2009
by Bill Cawthon
Judge Arthur J. Gonzalez approved bidding procedures for the rapid sale of Chrysler assets late last night. Saying “there is an urgent need for the deal to be consumated,� he overruled objections from a group of lenders who termed the speeded-up process an “absurdity.�
Chrysler had asked for permission to have a quick sale of most of its assets to a new company held by Fiat SpA, the United Auto Workers’ Voluntary Employee Beneficiary Association, and the U.S. and Canadian governments. The lenders had sought to delay the sale or make the bidding more competitive. They claimed the approved procedures will prevent anyone but the government from submitting a successful bid.
Gonazales denied the lenders’ motions, ruling that courtroom testimony had shown the procedures were designed to “encourage bidding from any interested party.�
Potential “interested parties� did get an additional five days to submit bids. Judge Gonzalez set a deadline of May 20 for submission and set a May 27 hearing date for approval. Chrysler had originally asked for a May 22 approval date. Bidders must include a 10 percent deposit with their bid.
The judge also approved a $35 million breakup fee to be paid to Fiat if a better offer for the Chrysler assets emerges.

[MoparDan]

http://www.allpar.com/news/index.php...clarification/

Chrysler plant clarification

May 6th, 2009 by DaveAdmin
Chrysler has sent out a new communication regarding the status of its various factories, headed by a sort of apology to those who discovered the status of their plants via court papers. The letter pointed out that the original standalone plan had not been made public because they did not know whether it would be approved, and because the UAW had not been consulted. This plan was rejected and a new plan based on a Fiat alliance was made, which considered changes in customer demand over the coming decade. Among other issues is presumably the assumption that when the economy recovers, fuel prices will also resume their climb.
While most of this information was previously released, there was some news in the clarification, including an end date for the Conner Avenue plant, which went from making spark plugs to making Vipers. The closure of the plant does not necessarily mean the end of the Viper, since Vipers were originally made in a different facility.
Sterling Heights will be closed after December 2010. This plant makes the Avenger and Sebring, which have proven to be unpopular; it has been operating at well under its capacity.
The Kenosha Engine plant will be idled in December 2010 due to “unprecedented reduction in volume and demand for products.�
Detroit Axle was already slated for closure as a new Marysville, Michigan facility came online; it will be idled in December 2010.
Twinsburg Stamping:work will be moved to Warren and Sterling stamping plants in March 2010.
Conner Avenue Assembly Plant: The site is scheduled to idle December 2009.
St. Louis North Assembly Plant: RamBox production will be moved to Warren Truck Assembly Plant in the third quarter of 2009, and the plant closed.
Newark Assembly Plant and St. Louis South Assembly Plant are already closed.
The letter claimed that manufacturing was temporarily idled to reduce dealer inventory, not as a result of the bankruptcy following, and that “virtually all employees associated with these facilities will be offered employment with the new company.� Some may be transferred to Jefferson North when a second shift is added to build the 2011 Grand Cherokee.

[MoparDan]

Hedge Funds cave in!!
http://www.allpar.com/news/
Chrysler creditor group throws in the towel

May 8th, 2009
by Bill Cawthon
The Chrysler Non-TARP Lenders Group has disbanded. The small group of creditors that had been objecting to Chrysler’s merger with Fiat and quick exit from bankruptcy has given up its challenge after rising defections and declining influence meant “it wasn’t sensible to proceed� in the words Glenn Kurtz of White & Case, the group’s attorneys.
The dissolution of the group ends the most serious challenge to Chrysler’s completing its bankruptcy plan within the original 30- to 60-day period originally envisioned.

[Lorax]

Thanks for the updates, MoparDan- great to see these Sludge Funders finally taking the dunk.

It looks good for the pension fund as well, so perhaps retirees can take a breather- for the moment.

The dirty little secret in all of this- I mean from the sub-prime meltdown, to wall street collapsing, to the auto industry as well, is the fact that class warfare has been foisted on the American public, with little media attention thus far.

Those with means, such as hedge fund managers, those who buy into them, wall streeters, corporation and bank heads, and the fascist right wing media elites such as Caftan Warlord Rush Limbaugh with their annual 40 million dollar contracts, are the ones responsible for fomenting this contempt for the average American citizen.

Never has there been such a systematic divide and conquer of the hearts and minds of what really makes this country work- the middle class.

We need a robust manufacturing base, a tariff based economy, a 90% tax rate for income over 5 million, which would retard legacy wealth, which has proven to be a detriment to our economy, stiff penalties for setting up off-shore tax havens in the effort to evade corporate tax, a single payer health care system made out of Medicare so all Americans have free health care as a birthright, outlaw lobbying in Washington, specifically foreign interests, big pharma, insurance, among others.

Never forget that the design is to make the middle class pay for any and all loans, bailouts, giveaways, etc. Banks even now are carping about having to limit executive pay, eventhough they've been greedily drinking from the public well.

Let's hope they are quick to repay the public coffers so they can again go ahead and start overpaying their fiscally brain-dead CEO's.

Always remember you must keep your elected officials' feet held to the fire 24 hours a day, less they forget whom they work for.

[MoparDan]

http://news.yahoo.com/s/ap/us_chrysler_dealers

Chrysler moves to eliminate 789 of 3,200 dealers

[mjs]

Who will risk their investment money when the Marxists in the government
decide to screw the legal process and decide who gets money and who doesn't.

Granholm and her fuckhead comments about the hedge funds will definitely slow investment into this state.

You do realize that hedge funds do not initiate investments or produce jobs or tangible products. They simply bet on things and buy and sell control of things that alter the bet's outcome. Think of it as a mob boss that bets on a race, then buys one of the horses and changes the jockey and drugs the horse a few minutes before the start. Its not really an investment and it really screws the horse, the jockey, the other betters, and the sport. Even though it brought money into the area, I think we're better off without the mob boss's investment.

[Lorax]

Probably union goons.

Who will loan money in the future to these companies?

Who will risk their investment money when the Marxists in the government
decide to screw the legal process and decide who gets money and who doesn't.

Granholm and her fuckhead comments about the hedge funds will definitely slow investment into this state.

Wait until the suppliers are out of business.
Will all the parts be shipped in from mexico and china?
Nightmare for suppliers: Chrysler shutdowns, Chapter 11 hit hard

20 companies are owed over 340 million! thats only 20.
Another five years and SE Mich may recover from this.
http://www.crainsdetroit.com/article.../FREE/30503996

Problem with your take on things, is that it's the elitist sludge fund owners who need to take a bath- they're gambling with excess legacy wealth, sitting by the pool with their laptops, spending daddy's money.

They don't contribute ONE CENT to the general welfare of this nation. Just a bunch of super rich gamblers who CAN AFFORD TO LOSE every cent they gamble with.

The rest of us don't have that luxury. I hope these fascist elitist fukfaces get it in the neck.

[jiminnm]

Lorax, you continue to demonize hedge funds and their investors without ever referencing any facts. About 60% of hedge fund investors are NOT individuals [[who represent only about 40%).
The majority of hedge fund investors are pension funds, endowments [[university and other), charities, insurance companies, and other such groups. Before you condemn them all to hellfire and damnation, understand who they are.

[Lorax]

I understand what you're saying, but the initial creation of these funds were through legacy wealth- unless you are part of that class, they you don't get to play.

The sludge funds INVEST in the mediums you mention, which in better days was forbidden, due to the tenuous nature of who they represent. They were designed for quick in and out profits, and through the dereugulation of the markets, they were allowed to blossom.

Not to minimize the effect their failure would have on the economy, but again, they shouldn't have been allowed to exist in the first place.

[MoparDan]

http://www.allpar.com/news/

Toyota picking up GM, Chrysler dealers?

May 15th, 2009 by DaveAdmin
Dealers that are having their franchises revoked are getting special attention from Toyota, according to an inside source. Toyota personnel are traveling the country and recruiting former Chrylser and soon-to-be-former GM dealerships, offering them the opportunity to switch franchises. They will not be reimbursed for the cars and parts they have, which are to be sold to other dealerships or the public, but may get special deals and financing for carrying the Toyota brand. Other automakers are also likely to take advantage of the opportunity to spread their brands.
While many areas may have had more Chrysler than they could support, given the company’s current sales, they were not within close range of the world’s largest, Toyota, which has far fewer dealerships in the U.S. than Chrysler did.



Nardelli: no loophole for higher salaries

May 15th, 2009 by DaveAdmin
Bob Nardelli wrote today: “Several news reports have stated that Chrysler executives ‘found a loophole’ for executive compensation. I want to assure you that these reports are absolutely, positively incorrect. Chrysler understands the limitations on compensation for senior executives during the term of the government loans. Chrysler has and will continue to fully comply with all conditions and legal requirements as it relates to executive compensation matters.�


Press: Chrysler dealer cuts are final

May 15th, 2009 by Bill Cawthon
According to Chrysler Vice Chairman [[and only member of the ruling triad who hasn’t announced he’s leaving) Jim Press, the dealer cuts are a done deal and become effective on June 9.
Press said Chrysler will not review its decisions and there will be no appeals process. The terminated dealers will not be offered settlements. He also said Chrysler not buy any inventory but will help affected dealers sell their stocks of vehicles and parts to other dealers, a process he estimated would take about six weeks.

[mjs]

As long as the guy who left Home Depot with $210 million says there's no executive hanky panky going on, I feel relieved.

http://www.washingtonpost.com/wp-dyn...010300553.html

[MoparDan]

As long as the guy who left Home Depot with $210 million says there's no executive hanky panky going on, I feel relieved.

http://www.washingtonpost.com/wp-dyn...010300553.html

I just posted it as an FYI. I know what his performance[[or lack thereof) at Home Depot was.

[mjs]

Didn't mean it as an attack on you or the reporting. I appreciate your updates and figured you'd know the background of the Chrysler CEO. I meant it as a criticism of him and background on why for those that didn't already know it.