Chrysler's U.S. sales up 10%, Ford flat, GM down 1.2%

Chrysler today reported U.S. sales of 115,363, a 10% increase compared with sales a year ago. Ford saw sales remain flat, down .1%, while General Motors' vehicle sales dropped 1.2%.Chrysler's U.S. sales up 10%, Ford flat, GM down 1.2%

Chrysler's New 2011 300, Wow

Sergio speaks: Chrysler's future will be better

New Chrysler CEO Sergio Marchionne hasn’t been talking much since the company emerged from bankruptcy on June 2. While rival General Motors has come out with an aggressive advertising campaign that attempts to get skeptics to look at its new cars, Chrysler has stayed under wraps. But Marchionne did take the microphone after sales came out on Oct. 1 and showed that he has a realistic view of Chrysler’s place in the world.

Chyrsler 200c

The question is, what will built that future? The company has only the Jeep Grand Cherokee and Chrysler 300 sedan coming in the near future. Both look good but neither of them are game changers. In 18 months or so, Fiat will have some of its cars coming. We’ll see how those cars do. Americans know little about Fiat cars and too few consumers shop Chrysler and Dodge dealerships for compact cars and family sedans. To show a better tomorrow, Marchionne will have to reveal some real surprises with his November plan.....More

Chrysler's Creditors Sue Daimler Over Transfers Before 2007 Sale

David McLaughlin

Chrysler's creditors say German auto maker Daimler AG intentionally defrauded them through a restructuring of Chrysler on the eve of its 2007 sale.

In a new lawsuit filed against Daimler, the creditors offer new details about their claims that Daimler stripped Chrysler of billions of dollars in assets for its own benefit before unloading the struggling U.S. auto maker.


"These exchanges enriched Daimler at the expense of the many Chrysler creditors who now are unable to look to these assets to satisfy their claims," the creditors said in the complaint.

The lawsuit, filed with the U.S. Bankruptcy Court in Manhattan Monday, comes after a judge ruled last Thursday that committee representing Chrysler's unsecured creditors could sue Daimler in an effort to increase their recovery from Chrysler's bankruptcy case.

A Daimler spokeswoman, Julia Engelhardt, said the claims in the lawsuit "are without merit."

"We will vigorously defend ourselves against these claims, which we believe are completely baseless," she said.

Creditors say that in early 2007, as Chrysler struggled under a heavy debt load and falling auto sales, Daimler faced the risk that it could be on the hook for billions of dollars in Chrysler obligations, including $17.5 billion for retiree health benefits and $5 billion in unfunded pension costs.

To avoid this risk, Daimler decided to unload Chrysler, which it bought in 1998. But before doing that, creditors say, it orchestrated the restructuring plan in the spring of 2007.

Under the plan, Daimler transferred valuable Chrysler assets to other Daimler-controlled entities. It also left assets in the group of Chrysler companies but separated them so they were no longer subject to claims from creditors, making them more valuable.

The lawsuit says the "most egregious" of these steps came when Daimler transferred Chrysler's most valuable business - its U.S. and Canadian financing subsidiaries - to a new Chrysler holding company.

By becoming a sister company of Chrysler rather than a subsidiary, the finance arm escaped potential creditor claims, according to the lawsuit. As a result, Daimler got a "substantially better price" for Chrysler when it sold an 80% stake to Cerberus Capital Management in 2007 for $7.4 billion.

After filing for bankruptcy in April, the bulk of Chrysler assets were sold to a new company owned by Fiat SpA, the U.S. and Canadian governments and the United Auto Workers union.

Besides Daimler, the lawsuit names four former members of Chrysler's board of directors. The complaint seeks unspecified damages.

Lawyers for the creditors committee say any proceeds from the lawsuit would go to paying off creditors, a group that includes the U.S. government and secured lenders that received $2 billion from the bankruptcy sale, giving them a recovery of about 29 cents on the dollar.

Chrysler's new deal-Different owners and Marchionne-led management team

Different owners, a new board of directors and maybe a Marchionne-led management team

TURIN, Italy — As Chrysler LLC negotiates an alliance with Fiat S.p.A. that would satisfy the Obama administration, sources say the companies are discussing a revised ownership structure, a new board and possibly a different management team for Chrysler.

Among the options being discussed is a direct role in Chrysler's operations for Fiat CEO Sergio Marchionne — possibly even the chief executive's job.

Sources close to the merger negotiations say that after completing the deal, the plan is to elect a seven-member Chrysler board that would include representatives from Fiat and possibly President Barack Obama's automotive task force.

But the companies face major obstacles in getting the deal done. The ownership of the future Chrysler is still subject to complex negotiations involving Cerberus Capital Management LP, Daimler AG, the UAW and the big banks that hold Chrysler's debt.

A person familiar with the negotiations said the new management structure would divide the roles of CEO and chairman between two executives. The job of Chrysler chairman would be held by an American, the source said.

Since 2007, Chrysler's chairman and CEO jobs have been held by Bob Nardelli, appointed by Cerberus.

On March 30, Obama gave Chrysler and Fiat until the end of April to prove their alliance is workable. The government then would grant Chrysler up to $6 billion in additional loans. Chrysler already has received $4 billion.

Obama impressed

Marchionne (mar-kee-OHN'-nay) — the energetic, chain-smoking architect of Fiat's turnaround — has led the Italian automaker since 2004. In his March 30 speech about the auto industry, Obama praised Marchionne and described Fiat as a company where "the current management team has executed an impressive turnaround."

Another source familiar with the negotiations said Obama's task force may even dictate that Marchionne be directly involved in running Chrysler.

It's unclear whether Marchionne would try to exert hands-on control of Chrysler in the style of Carlos Ghosn, the CEO of Renault and Nissan. But there is evidence that he might try. The 56-year-old executive already spends several days each month in the United States, usually at the offices of Fiat's Case New Holland subsidiary in suburban Chicago.

Every other Friday evening, Marchionne boards a chartered overnight flight, snatching a few hours of sleep and arriving Saturday morning in Chicago. After two days working in America, he catches the red-eye return flight on Sunday.

Marchionne, who speaks accent-free English, holds both Italian and Canadian citizenships and earned university degrees in Toronto and Windsor, Ontario. He spent a decade working in Canada.

Asked about possible changes, Chrysler spokesman Todd Goyer issued a statement: "Chrysler has no management changes to announce. The job of Chrysler's current management team is to get the company on a solid foundation moving forward."

Obstacles remain

Speaking last week at the New York auto show, Chrysler co-President Jim Press said he is optimistic that Fiat and Chrysler can meet the government's requirements and form an alliance.

But he cautioned that Chrysler is preparing for bankruptcy if the alliance does not work out. "We've got to be prepared to take care of the equity and the assets," he said.

Besides the negotiations over the ownership of the future automaker, Chrysler negotiators are in talks with UAW officials about reducing Chrysler's $10.6 billion obligation to the union's health care trust.

The Treasury Department also is negotiating with the major banks holding $6.9 billion in Chrysler debt, according to a Bloomberg News Service report. Bloomberg said the four largest lenders are JPMorgan Chase & Co., Citigroup, Goldman Sachs Group and Morgan Stanley.

Cerberus has offered to give up its stake in Chrysler. Cerberus Chairman Stephen Feinberg is involved in the negotiations. Cerberus also must iron out a dispute in its effort to acquire Daimler's 19.9 percent stake in Chrysler. Cerberus aims to consolidate its ownership as part of the overall plan to restructure the company.

Speaking at a shareholder meeting last week in Berlin, Daimler CEO Dieter Zetsche said Cerberus was making "unacceptable" demands in negotiations to acquire the remainder of Daimler's stake.

The two sides have been wrangling since November over a Cerberus request to acquire Daimler's stake. Daimler sold majority ownership of Chrysler to Cerberus in 2007.

The UAW Can No Longer Strike! If So All Bailout Money is to be returned.

GM, Chrysler's federal loan deals bar strikes

DETROIT – Provisions of General Motors' and Chrysler's $17.4 billion in federal loans automatically places them in default if union workers go on strike.

A General Motors Corp. filing this week with the Securities and Exchange Commission detailed the provision as part of its $13.4 billion in federal loans.

A person briefed on Chrysler LLC's $4 billion loan, who didn't want to be identified because the company is in talks with the United Auto Workers union about concessions, confirmed Thursday that the Chrysler deal also has a similar provision.

The UAW isn't a party to the deal and hasn't threatened a strike, its most potent weapon against the Detroit automakers.

The UAW and the automakers have a Feb. 17 deadline to agree to concessions to lower labor costs.