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]

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.

[jiminnm]

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.

I think you misunderstand. The mediums [[pension funds, charities endowments, insurance companies, etc.) that I mentioned invest in hedge funds and represent about 60% of the investments in hedge funds. The remaining 40% are Accredited Investors. Look at the losers from the Bernie Madoff swindle and you'll find college endowment funds, pension funds, charitable organizations and more. It is not the other way around.

Hedge funds began in the late 1940s or early 1950s. Initially, investors were primarily Accredited Investors, but that quickly changed. Legacy wealth is irrelevant. Whoever has accredited status [[http://www.sec.gov/answers/accred.htm )can invest in a hedge fund. It's been estimated that 8-9% of US households would qualify as accredited.

[MoparDan]

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

Chrysler moves to eliminate 789 of 3,200 dealers

[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.

[MoparDan]

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.

No prob. I need to get out of the defensive mode due to the environment at times. But you're right about him. Couple that with the Daimler fiasco & it's a real barn burner with the current situation.

[MoparDan]

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.

[Novine]

"This is awfully creepy & stinks of Chicago Machine;"

Fake controversy. Most car dealers are Republicans and donated to Republican candidates. The majority of dealerships that are closing are going to be Republicans. People who actually understand statistics have analyzed the claims and called them phony.

http://www.fivethirtyeight.com/2009/...publicans.html

[econ expat]

fake controversy, yep
Advertising=sales
Dealerships=visibility
every dealer sign= visibility, the more the better
Car dealers flock to 'dealer rows' for that very reason[[ex.- former Livernois strip)
Cost to manufacturer for dealerships very little
The manufacturer mandates redesigns, etc to keep their 'advertising profile' modern and improved.
Pity the dealers that built all the new showrooms, hired large crews and suddenly are told they are not needed any more, good bye, you and your employees are out of luck.
That article did make one 'interesting phrase'- the real story is the dealers that will remain'
Think about it- look at the list of dealers around Detroit that are scheduled to close- then read between the lines. What dealers are remaining? And how many of those dealers do you really trust?
No need to mention names, but there are some reputable high volume dealers on the list to close and some that remain would never get my business.
Looking at the Detroit area closings, one can see who the 'politically powerful' dealers are, and it looks as if they may have had a little input.
Sales volume- ha! Why is neither dealer in Lapeer County on the list? A county that size with 2 dealers.

[MoparDan]

Update: Chrysler to exit bankruptcy on Friday

June 2nd, 2009
by Bill Cawthon
Chrysler has asked Judge Arthur Gonzalez to waive an automatic ten-day waiting period to allow the sale of its assets to NewCarCo Acquistions to proceed as quickly as possible and allow the new Fiat-led Chrysler Group LLC to commence operations.

“We are filing a request this afternoon to close the sale as early as Thursday afternoon,� said Chrysler spokeswoman Shawn Morgan. She added the company hopes to get a hearing “between now and Wednesday.�

Judge Gonzalez approved the sale on Sunday and there would normally be a statutory ten-day period between the approval and the actual sale. The waiver was granted on June 2 and Chrysler will exit bankruptcy on Friday.