Chrysler Fiat News:Fiat CEO says Chrysler concessions needed for deal

Fiat CEO says Chrysler concessions needed for deal

Fiat CEO Sergio Marchionne said he is optimistic that Chrysler can be turned around quickly. But Marchionne stressed that for the Fiat’s relationship with the Auburn Hills automaker to work, all of Chrysler’s stakeholders will have to make concessions....More

U.S. $3 billion loan part of Chrysler-Fiat deal

DETROIT (Reuters) – Chrysler LLC's deal with Fiat SpA (FIA.MI) depends on the U.S. automaker receiving an additional $3 billion emergency loan from the U.S. government, the company's product development chief said on Wednesday.

"I think that is part of the deal," Frank Klegon said when asked if the automaker needed the additional $3 billion for the Fiat deal to be completed. "That is part of the process. The expectation is that that is an important part of it."

Chrysler, which had asked for $7 billion, received $4 billion U.S. emergency loan on January 2. The automaker has said it is counting on getting the rest of the money to keep operating.

Klegon believed the $3 billion of additional government aid was part of a term sheet Chrysler had with Fiat on the alliance. Chrysler has been calling the request for additional support a second tranche, or the second half of the original $7 billion of aid it sought late last year.

Chrysler, owned by private equity firm Cerberus Capital Management, announced on Monday an alliance with Fiat that would give the Italian automaker a 35 percent stake in Chrysler in exchange for access to its technology and overseas markets.

Fiat would help Chrysler put together the restructuring plan Chrysler has to submit to the U.S. government by February 17.

Klegon said the U.S. Treasury had been alerted to the deal and he hoped it would approve of the agreement.

Klegon said discussions had been going on with Fiat on the product side for some time.

"I had no knowledge there was a bigger discussion going on," he said, adding the deal does not bar the automaker from other alliances.

Klegon said Chrysler's alliance with Nissan Motor Co Ltd (7201.T) that would provide small cars to Chrysler and large trucks to Nissan was still going forward, as was Chrysler's minivan production for Volkswagen AG (VOWG.DE).

Klegon did not know if Chrysler would keep all three brands, but, ultimately, that would not be the product development chief's call.

"Cerberus are the guys making the deals. They are the ones who at the end of the day negotiate with Fiat," he said. "We are obviously engaged as the operating side and the product side, but the actual deal is under Cerberus leadership."

Under the terms of the deal, which has to be approved by the U.S. government, Fiat would not pay cash for its stake in Chrysler.

Chrysler's sales tumbled 30 percent in 2008 and it ended the year with only $2 billion in cash and reliant on a government bailout to stay afloat.

Chrysler, which owns the Jeep, Dodge and Chrysler brands, is 80.1 percent owned by Cerberus, which paid $7.4 billion for its stake in 2007. Former Chrysler parent Daimler AG (DAIGn.DE) holds the rest of Chrysler and is looking to sell its stake.

Daimler has written down the value of its remaining 19.9 percent stake in Chrysler to zero.

Fiat has said it could raise its stake beyond the initial 35 percent, but that step would depend on the success of Chrysler's restructuring.

(Reporting by Poornima Gupta and David Bailey; Editing by Andre Grenon)

Mixed reviews in Congress for Fiat-Chrysler deal

WASHINGTON – Fiat's proposed deal to take a 35 percent stake in Chrysler in exchange for access to a lineup of more fuel-efficient cars received mixed reviews in Congress on Wednesday, with one lawmaker suggesting it could raise questions among taxpayers.

Sen. Bob Corker, R-Tenn., said the proposed alliance involving Chrysler, whose majority owner is New York-based private equity firm Cerberus Capital Management LP, creates "an interesting dilemma for U.S. taxpayers" in which they would essentially finance a partnership between Chrysler and a foreign automaker.

The Bush administration gave Chrysler LLC a $4 billion loan earlier this month and the automaker's finance arm received a separate $1.5 billion infusion last week to expand its lending practices. Chrysler could receive another $3 billion in loans if the Obama administration approves a restructuring plan expected to be submitted in mid-February.

"Cerberus made a bad investment and in order for them to get that investment out of their portfolio of holdings, U.S. taxpayers have had to write an $8.5 billion check to Fiat," said Corker, who urged General Motors Corp. and Chrysler to seek concessions from unions and bondholders in exchange for government financing.

"For the U.S. taxpayer, they have to be scratching their head a little bit," he said.

Despite the concerns, Corker said the agreement could strengthen Chrysler's viability plan and be "the best thing that could happen with Chrysler."

Chrysler and Fiat Group SpA announced Tuesday a nonbinding agreement to establish a global strategic alliance that would help Chrysler bring badly needed small cars to its showrooms while helping the maker of Fiat, Lancia and Alfa Romeo vehicles re-enter the American market.

Analysts noted Fiat would not be required to provide cash in the deal, but its willingness to partner with Chrysler could provide assurances to Washington about the company's long-term prospects.

The agreement "will significantly improve the chances of Chrysler paying that money back," said Rebecca Lindland, an auto industry analyst with the consulting firm IHS Global Insight.

Lindland said the deal would could give Chrysler access to markets in Russia and Brazil and help the company develop smaller, fuel-efficient cars to compliment its truck lineup.

Sen. Tom Carper, D-Del., said the deal could raise concerns among lawmakers but he noted that Chrysler already shares technology with German automaker Daimler AG, which owns 19.9 percent of the company.

"The idea of a partnership, not an ownership situation, but a partnership which allows Chrysler to enjoy and receive some technology input in return for building small cars in this country .... that may be a good idea," Carper said.

Sen. Debbie Stabenow, D-Mich., said she had not received details from Chrysler, which employs thousands of workers in her home state. "The most important thing is how are they going to structure it and will we keep jobs in the United States?" she asked.

The alliance with Fiat would be included in a viability plan to the Treasury Department, which is due by Feb. 17, and could help the company convince the government to provide an additional $3 billion in loans.

"The nonbinding term sheet with Fiat is consistent with the U.S. Treasury's requirements," Chrysler said in statement late Wednesday. "Chrysler will seek U.S. Treasury approval for this transaction under its loan agreement, as well as customary regulatory approvals."

If Chrysler fails to achieve viability by March 31, the new Obama administration could call back the $4 billion in loans, essentially pushing the company into bankruptcy.

Fiat spokesman Gualberto Ranieri said the alliance was contingent upon regulatory approvals by the Treasury Department.

Chrysler product development chief Frank Klegon told reporters in Detroit at the Automotive News World Congress that he expected an additional $3 billion in government financing to be an important part of the process for the potential alliance.

AP Auto Writer Tom Krisher in Detroit and Associated Press Writer Ariel David in Rome contributed to this report.

Chrysler And Fiat Merger

From Forbes Jerry Flint

The announced deal between Chrysler and Fiat has benefits for both, but it is not a game changer--not yet.

The alignment between Fiat of Italy and Chrysler does not exactly save Chrysler, but it gives Fiat an entry into the U.S. In short, Fiat is to get 35% of Chrysler, will not pay any cash for the stake, and it will give Chrysler access to its technology.

Fiat (nyse: FIA - news - people ) had publicly said it wanted a production base in North America for its Alfa Romeo brand--and presumably the Fiat brand, too. Through its 35% interest that it is getting in Chrysler, it would presumably have access to a U.S. plant to build its cars.

The chief executive of Fiat, Sergio Marchionne, has also worried that his company was not big enough to survive in today's world. Marchionne was born in Italy in 1952 but built his early career in Canada and has dual Canadian and Italian citizenship. Chrysler has some Canadian plants, and the Canadian autoworkers union, separated from the American UAW, has been quite cooperative in working with the industry in recent years.

So at no cash cost, Fiat may have its production base on this continent. What about Chrysler? The company has been weak technically and does not have enough money to finance the kind of new vehicle programs that Chrysler needs to stay competitive in this market.

Fiat is strong in small cars and in their engines and transmissions, as well as in luxury cars and diesel engines. Getting the technology could be a huge help for Chrysler, but the American company will still need the money and ability to create new cars even with Fiat technology.

The alliance might help Chrysler if it needs to get more money from the American government in its battle to survive.

Chrysler's strength has been in sport utility vehicles, pickup trucks and minivans. We do not know Fiat's degree of interest in these businesses. Meanwhile, another foreign maker, Nissan (nasdaq: NSANY - news - people ) (which is part of the Renault/Nissan alliance) has an agreement with Chrysler whereby Nissan is to get a version of the Dodge Ram, a big pickup, and Nissan is to build small cars destined for Chrysler....More

Fiat Nears Stake in Chrysler That Could Lead to Takeover

By STACY MEICHTRY in Rome and JOHN STOLL in Detroit
In an attempt to revive two of the world's storied auto makers, Italy's Fiat SpA and Chrysler LLC are poised to announce a partnership as soon as today in which Fiat could take control of the U.S. company's operations, people familiar with the matter said.

Under terms of a pact that is being hammered out, Fiat is likely to take a 35% stake in Chrysler by the middle of this year. It would have the option of increasing that to as much as 55%, these people said.

Fiat, the stronger of the two, wouldn't immediately put cash into Chrysler. Instead it would obtain its stake mainly in exchange for covering the cost of retooling a Chrysler plant to produce one or more Fiat models to be sold in the U.S., these people said. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars, they said.

The deal is the latest maneuver by Fiat's chief, Sergio Marchionne, who has pulled the Italian company back from the brink collapse since taking over in 2004.

The partnership would provide each company with economies of scale and geographical reach at a time when both are struggling to compete with larger and more global rivals like Toyota Motor Corp., Volkswagen AG and the alliance of Renault SA and Nissan Motor Co.

Chrysler last year sold two million cars and trucks world-wide, with almost all of its sales in North America. Fiat sold 2.5 million vehicles and is heavily dependent on Europe -- particularly its home market in Italy.

While Fiat has a wider global reach than Chrysler, the two auto makers are smaller players compared to their global rivals. Toyota and General Motors, for instance, each have sold more than nine million vehicles annually...More

Chrysler News:Chrysler and Fiat sign merger agreement

Italian carmaker Fiat and US car concern Chrysler have signed an agreement to merge their companies, Chrysler disclosed.

Chrysler, at its Auburn Hills, Michigan headquarters, said that the agreement is still preliminary and not yet binding.

Further details were not immediately disclosed. Earlier on Tuesday, Fiat deputy chairman John Elkann said that the Turin-based carmaker is in talks with Chrysler amid reports of a possible purchase by the Italian company of a majority stake in the ailing US producer.

"It is no secret that we are talking. It has been a while that we are in talks," Elkann, a heir of the Agnelli family which controls Fiat, was quoted as saying by the ANSA news agency.

Elkann indicated more details on a possible deal would be available following a Fiat statement later on Tuesday and a meeting of the company's board scheduled for Thursday.

Earlier on Tuesday, Milan's Bourse announced trading in Fiat stocks had been suspended pending the statement's release.

The Wall Street Journal reported on Monday that Fiat was considering acquiring a 35 per cent ownership in Chrysler by mid-year as the first step towards the acquisition of a possible majority stake in the US company.

The deal would give Fiat long-sought access to the US market for its small and mid-sized cars, with the Fiat 500 and Alfa Romeo reported to be at the top of the list.

Under the deal, Fiat could build its own small cars in the US and use the Chrysler distribution network. In exchange, Chrysler would tap Fiat's expertise building small and medium-sized cars to advance its own plans for new, front-wheel-drive models with lower emissions.

As petrol prices soared and the economy stalled, sales of Chrysler's mostly large, fuel-inefficient cars and trucks fell 30 per cent in 2008.

With auto sales at a 27-year low, Chrysler has laid off tens of thousands of workers and had to beg for government rescue financing of $US5.5 billion ($A8.21 billion) just to stay afloat for the next few months.

The loan terms require Chrysler to deliver a credible survival strategy by March, and an alliance with Fiat would be a tangible new strategy.

Fiat, which exclusively makes small cars with narrow profit margins, is struggling to keep its own head above water in Europe's expensive labour market.

Chrysler News:Chrysler Says It Won't Sell Pieces of Company

DETROIT -- Chrysler LLC on Wednesday shot down fresh speculation the auto maker is considering selling off pieces of its operations amid increasing concern about its ability to survive.

In a hastily organized conference call, Chrysler President Tom LaSorda said reports the company was in talks about selling its Jeep brand and other key assets are "absolutely false."

Chrysler is "going to be around for a long time," he said. "We are not going under."

Mr. LaSorda said he couldn't say if Chrysler's majority owner, Cerberus Capital Management LP, was considering selling the company as a whole.

It's time to buy back into American Vehicles!

GM UAW News On Concessions

The latest news reported by Fox 2 Detroit:

GM will not ask the UAW for wages concessions.

Probably due to the fact that the last contract in 2007 included wages concessions. The new UAW assembly employees will earn around $14 dollars an hour.
Remember the new car czar will have to approve the companies plan. More than likely the czar will demand pay cuts.

Chrysler News:Jeep To Renault-Nissan and Magna is Cerbrus Selling off Chrysler?

Another Chrysler sell off article!

Jeep To Renault-Nissan, Belvidere To Magna Steyr, PT Cruiser To China. Maybe

Chrysler has been - some say desperately - seeking to “sell key assets” for a while. The Nikkei (sub) now says that Chryler might be getting close. The usual “unnamed people with knowledge of the discussions” whispered that Chrysler is talking to Nissan-Renault and the Canadian auto supplier Magna. The topics of the discussion are the Jeep brand and Chrysler’s Belvidere plant. The Jeep brand would go to Renault-Nissan, Magna would take the plant.

The parties aren’t strangers.

Chrysler had announced an alliance with Nissan last April.

As for Magna, the interest probably stems from Magna’s subsidiary Magna Steyr, which is creating more and more auto contract manufacture business. Magna Steyr has produced the Chrysler Voyager from 2002 to 2007, and currently produces the Chrysler 300C, the Jeep Commander and Jeep Grand Cherokee. Magna was one of the bidders for Chrysler when it was sold by Daimler in 2007.

According to Reuters, Chrysler has been in talks with Chinese automakers Chery and Guangzhou Automobile Industry Group Co, to sell them the PT Cruiser “brand” and tooling.

Of course, nobody will officially confirm that anything is true. Reuters says that representatives of Chrysler, Cerberus, Magna, and Nissan declined to comment. A spokeswoman for Renault denied talks were under way.

Reuters say there is reason for secrecy and plausible deniability: Renault-Nissan is looking to see whether a deal to acquire Le Jeep would hurt access to U.S. government funding. Good thinking.

[For the uninitiated: an asset sale is when you sell what's owned by the company without selling the company-- and the liabilities that go with it.]

Chrysler News:Corker hopes Chrysler will merge

Senator says GM's debt load is too high

Rick Kranz
Automotive News

DETROIT -- Tennessee U.S. Senator Robert Corker came to the Detroit auto show today and said Chrysler LLC needs to find a merger partner and General Motors is carrying too much debt.

Corker, a freshman Republican, emerged as a point man in the automotive debate after he and a group of Southern lawmakers blocked auto-bailout legislation last month.

Leading a throng of reporters on the floor of the show, Corker said he came to Detroit in response to a plea by Michigan Attorney General Mike Cox. Cox asked lawmakers to visit the show in a column published in Tuesday's Washington Post.

Corker's visit underscored the attention the industry has drawn as the U.S. economy reels from the longest recession since the early 1980s. At the end of 2008, U.S. auto sales had plunged to levels not seen since 1982.

In response to a reporter's question about Chrysler, Coker said the automaker's best chance of survival is with a partner.

"Chrysler probably needs to merge with somebody, not necessarily go away from the standpoint of existence,'' he said. "It appears to me based on what I have looked at that they have not invested in technology and those kind of things necessary to be a standalone.

"My hope is they will in fact merge and be a viable part of Michigan and our country."......More

Chrysler News:Chrysler 200c EV concept offers social networking capabilities

The Chrysler 200c EV concept vehicle, revealed today at the North American International Auto Show in Detroit, would offer social networking capabilities that could wirelessly connect drivers to friends in other vehicles.

The vehicle's personalized profile system would interact with Web sites such as Facebook and Twitter, said Frank Klegon, Chrysler's executive vice president of product development. Passengers could surf the Internet, scroll through a library of songs or other media, and find traveling information.

Chrysler's vehicle would be able to travel 40 miles without using gasoline - the same fuel economy General Motors is promising with the Chevrolet Volt extended-range electric vehicle.


But the heavy emphasis on interior electronics and design illustrates an increasing focus in the industry on combining great design with alternative powertrain technology under the hood.

Klegon said the 200c EV would present a "seamless, harmonious link between the vehicle and the home or your office."...More

Hyundai Genesis, Ford F-150 named top vehicles

Richard Truett
Automotive News
January 11, 2009

DETROIT -- The 2009 Hyundai Genesis today was named the North American Car of the Year by a panel of 50 of the nation's top automotive journalists. The redesigned 2009 Ford F-150 hauled away Truck of the Year honors

The Genesis defeated the Volkswagen Jetta TDI and Ford Flex. The F-150 came out on top over the redesigned Dodge Ram and Mercedes-Benz ML320 Bluetec.

The awards are given to the vehicles that get the most points by the panel of journalists. Each category had a total of 500 points this year, 10 points per judge.


"This award tells people that Hyundai maybe is a different car company than what they think," said John Krafcik, acting COO of Hyundai Motor America. "It signals that these guys have arrived."

The Genesis earned 189 points, just ahead of the Flex with 180 points. The Jetta TDI finished third with 131 points.

This was the third time Ford Motor Co.'s signature pickup truck has won the award. It also took the top honor in 1996 and 2004. This year, the F-150 took 259 points while the Ram garnered 167 and the ML320 Bluetec earned 74.

This year was the first time that two diesel-powered vehicles, the Jetta TDI and the ML320 Bluetec, made the list of finalists. It was also the first time a Korean vehicle, the Genesis, has been a finalist.

Voting started in September from a list of 14 new or substantially revamped cars and 12 new or redesigned pickups and SUVs. Cars that didn't make the final cut include the Dodge Challenger coupe, the Honda Fit and the Toyota Venza crossover. On the truck side, the Chevrolet Traverse, Volkswagen Tiguan and Subaru Forester didn't make the list of finalists.

UAW supporters rally outside Detroit Auto Show

Louis Aguilar / The Detroit News
Dozens of United Auto Workers and their supporters are rallying outside the North American International Auto Show to defend their wages, which could be cut under current terms of the federal loans to General Motors Corp. and Chrysler LLC.

Carrying placards with such slogans as "I'm not a foreign auto worker", UAW workers like Tony Browning, a 34-year-Chrysler veteran, say many hourly workers will not accept deep wage cuts.

"This whole thing about we make so much more than foreign competitors is a lie," Browning said, who works on the line at Chrysler's Sterling Assembly plant. "We work damn hard for our money and I don't see a whole lot of people who are going to vote to cut our paychecks in half.".......More

Lauer Interviews GM's CEO, UAW President

UAW, Automaker Contract Negotiations Set For Monday

DETROIT - TODAY Show's Matt Lauer interviewed General Motors Corp.'s CEO Rick Wagoner and United Auto Worker President Ron Gettlefinger at the GM Tech Center in Warren Thursday.

The interview came days before union and automaker leaders are scheduled to begin contract negotiations Monday as a required stipulation under Washington's billion-dollar bridge loan to the GM, Chrysler LLC and Ford Motor Company.

The $13.4 billion federal loan package granted to GM last month requires that the UAW make concessions and also demands that GM submit a restructuring plan to the government by March 31....More

The UAW Meltdown | The End Of The UAW

We are looking at the end of the UAW, they can no longer strike against the auto companies and that was their only strength.

As the UAW GM Concession talks begin, the future grows bleaker for UAW members. We now know that Ron Gettelfinger cut a deal, he agreed to never strike again to get the auto rescue loans for GM and Chrysler.

If the UAW strikes all the rescue loan must be paid back to the government. Which means any of the money that would be used for retirees and benefits (VEBA) would be at risk. The UAW is locked in for the ride.

If this was a condition set by George Bush or the Treasury, why did Ron Gettelfinger agree and didn't inform the Union members?

If the Government and auto companies are going to dictate what the wages and benefits are going to be, why does the auto worker have to pay a union?

The transplant auto companies are paying more pre hour and they have medical benefits, Why should the UAW worker make less than the southern workers and less benefits?

The Government will be in partial control of the auto companies and the UAW has no bargaining power.

Why would the new age auto worker want to be in the UAW if he or she is only making $14 an hour with no pension???

Good Luck UAW Members!
J.E.
GMCHRYSLERNEWS