"Operationally Bankrupt"

[Ponch ®]

 Chrysler CEO: We're 'operationally' bankrupt

Automaker scrambling to sell assets just months after private equity buyout as credit crunch deepens - report

December 21 2007: 7:26 AM EST

NEW YORK (CNNMoney.com) -- Chrysler Corp., the troubled automaker bought by private equity just four months ago, is scrambling to sell assets amid indications of huge losses, as access to cash becomes increasinglly
scarce, according to a published report Friday.


"Someone asked me, 'Are we bankrupt?'" the Wall Street Journal quoted Chrysler boss Robert Nardelli telling employees at a meeting earlier this month. "Technically, no. Operationally, yes. The only thing that keeps us from going into bankruptcy is the $10 billion investors entrusted us with."
To raise money, Chrysler is looking to sell over $1 billion in land, old factories, and other holdings, even if it has to let those properties go for under book value, the Journal said.
In an interview with the Journal, Nardelli confirmed the comments and declined to give a financial forecast for 2008, saying only that Chrysler "will make a pretty significant improvement" over the $1.6 billion the company is set to lose this year. The Journal said Nardelli originally hoped to turn a profit in 2008.
The rush to raise capital comes amid constricting access to money as more banks and other lenders face heavy losses related to subprime mortgages.
Chrysler's owner, Cerberus Capital Management, is now facing serious subprime-related losses from GMAC Financial Services, which it bought from General Motors (GM, Fortune 500) for $12 billion, and is also trying to walk away from a now pricey deal to buy United Rentals Inc., (URI) the Journal said.
Cerberus bought Chrysler from German automaker Daimler in a deal that closed in August.
In the arrangement, Daimler (DAI) essentially paid Cerberus to take the automaker, which fell to No. 4 in U.S. sales behind Toyota Motor (TM) in 2006, in an effort to get out from under a $1.5 billion loss from last year, along with continued obligations to union members and retirees.

http://money.cnn.com/2007/12/21/news/companies/chrysler/index.htm?postversion=2007122107

[Ponch ®]

I think it's all bull's fault due to his incessant bad mouthing of the company's products.

[bull]

I think it's all bull's fault due to his incessant bad mouthing of the company's products.

If they had only listened to me they'd be in the black.

[TruckDriver]

I hope I'm wrong, but all the same, it wouldn't suprize me if they are totally gone in the next couple of years.

[Ghoste]

I agree with Bull.   

[70charginglizard]

I think it's all bull's fault due to his incessant bad mouthing of the company's products.

If they had only listened to me they'd be in the black.

Listen to the very last line in this video-
http://www.youtube.com/watch?v=JkA1uAJlbzU&NR=1

[moparstuart]

I think it's all bull's fault due to his incessant bad mouthing of the company's products.

If they had only listened to me they'd be in the black.

Listen to the very last line in this video-
http://www.youtube.com/watch?v=JkA1uAJlbzU&NR=1

yeah negitive input from charger , so the made it more retro

[Ponch ®]

I think it's all bull's fault due to his incessant bad mouthing of the company's products.

If they had only listened to me they'd be in the black.

Listen to the very last line in this video-
http://www.youtube.com/watch?v=JkA1uAJlbzU&NR=1

yeah negitive input from charger , so the made it more retro

Say what you will about the hated "Abomination", but along with the 300 and the Magnum, it's probably the reason why the company is still around at all.  God knows nobody (except car rental companies and Brock) was buying those underpowered and stylistically uninspired FWD Intrepids, 300M's, Stratuses, and LHS.

[Highbanked Hauler]

I hope I'm wrong, but all the same, it wouldn't suprize me if they are totally gone in the next couple of years.

  Na,   They will be the first to come out with the first   personal flying platform,  that will replace cars all together,  gotta look to the future

[dukeboy_318]

I hope I'm wrong, but all the same, it wouldn't suprize me if they are totally gone in the next couple of years.

i sure hope not but i wouldnt be surprised either

[bull]

I think it's all bull's fault due to his incessant bad mouthing of the company's products.

If they had only listened to me they'd be in the black.

Listen to the very last line in this video-
http://www.youtube.com/watch?v=JkA1uAJlbzU&NR=1

  yeah negitive input from charger , so the made it more retro

Say what you will about the hated "Abomination", but along with the 300 and the Magnum, it's probably the reason why the company is still around at all.  God knows nobody (except car rental companies and Brock) was buying those underpowered and stylistically uninspired FWD Intrepids, 300M's, Stratuses, and LHS.

Whachutalkinbout Willis? Those things are everywhere. And you don't think there are about 600,000 '06 "Charger" taxis, rental cars and cop cars? Don't you find it curious that Chrysler was doing quite well before the Germans took over (pre-'06 "Charger") and promptly ran the company into the ground after that model was released. I'm not simplistic enough to believe the '06 is the reason but I do think DCX's general design philosophy during that time did them absolutely no good. I'd say the downhill slide began late in '03 (with models like the '04 Durango) and snowballed thereafter. If you click on Lizard's youtube link you'll hear the actual Chrysler designers talking about the backlash created by the new "Charger" and how it reshaped their design philosophy. Too little too late though I'm afraid.

[Ghoste]

I also wouldn't be too quick to include the Magnum in a list of cars that are keeping the company afloat.  Poor sales numbers are the reason it's being dropped after all.

[greenpigs]

Guess I better go buy a Ford..at least they will have dealerships 5 years from now.

[Ghoste]

Or maybe the Big Three will merge into the "New American Motors" corp and try to stop the Japanese juggernaut. 

[Mike DC]

 
There's too much capacity in the worldwide auto industry these days.  Somebody American is gonna go under sooner or later.  The problem is that it will likely be Chrysler when it should have been GM. 


I'm not just saying that as a Mopar fan either.  I think GM's still less healthy than Mopar in the big picture.  GM has been a mess for the last 30 years, but they've been able to coast this long because of a combination of reasons.

   

[Ghoste]

I can't help wondering if Toyota will succumb to the same kind of ills that plague GM today as they grow.  (complacency being the first of them)

[BigBlackDodge]

I think it's all bull's fault due to his incessant bad mouthing of the company's products.

If they had only listened to me they'd be in the black.

Listen to the very last line in this video-
http://www.youtube.com/watch?v=JkA1uAJlbzU&NR=1

  yeah negitive input from charger , so the made it more retro

Say what you will about the hated "Abomination", but along with the 300 and the Magnum, it's probably the reason why the company is still around at all.  God knows nobody (except car rental companies and Brock) was buying those underpowered and stylistically uninspired FWD Intrepids, 300M's, Stratuses, and LHS.

On the contrary, I've talked with several salesmen who miss those cars because they sold very well. You can also add my name to Brocks as an LH owner.

BBD

[70charginglizard]

I think it's all bull's fault due to his incessant bad mouthing of the company's products.

If they had only listened to me they'd be in the black.

Listen to the very last line in this video-
http://www.youtube.com/watch?v=JkA1uAJlbzU&NR=1

  yeah negitive input from charger , so the made it more retro

No...Id say they are revamping the new charger this time to "making" it more close to retro because of the input from the classic mopar owners stating that is what they should have done from the beginning.

The test of time (being when the challenger comes out) and it's sales in direct comparison to the new chargers sales in the beginning should tell the tale as to what the public truely wants to see in a new age classic mopar muscle car.

No judging should start before that point.

[T3/RT]

QUOTE (Chrysler)
Robert Nardelli Responds to Media Reports

Posted Dec 21, 2007, 05:33 PM by Robert Nardelli

Chrysler Chairman and CEO Expresses Confidence in Chrysler's Operations, Products, Finances and Employees

* Long-term support from Cerberus Capital Management, L.P. and Daimler AG

Auburn Hills, Mich. - "There have been several recent media reports that have painted an inaccurate picture of Chrysler LLC's current financial position. Therefore, the management of Chrysler and our parent company, Cerberus Capital Management, L.P., felt it imperative to correct the record since such misinterpretations and misperceptions are misleading and could leave the wrong impression in the minds of investors and other interested parties.

First and foremost, it is important to note that Chrysler is not only meeting, but, in many cases, exceeding its financial targets heading into 2008.

Importantly, Chrysler has ample liquidity. We are fully funded with working capital to meet our present and future needs and objectives. We are doing what any other prudent company is doing during this challenging economic environment. We are trying to instill a sense of urgency throughout the workforce, putting our capital to work effectively and efficiently, streamlining inventory, improving current products and developing new and innovative vehicles. Our dealer body is quite pleased that our inventory of vehicles was down another 4 percent in November.

In a 13-hour meeting this week with the Cerberus board of directors, Cerberus praised and was highly complimentary of Chrysler's progress to date and unanimously approved our 2008 plan. We have a solid strategic direction to return the company to long-term profitability. We are on target and have the unwavering support of Cerberus, as well as our other key partner, Daimler AG.

Cerberus met with its investors last Thursday to share the progress that has been made and to convey to these investors that the company was meeting – and in many cases – exceeding – its targets. The report was well received.

Like many companies in today's uncertain economic environment, Chrysler is moving aggressively to improve its business. We recognized in advance the increasingly competitive vehicle market heading into 2008. With that, we have been moving aggressively to make our company leaner. The steps we are taking include previously announced volume-related reductions at several North American assembly and powertrain plants and the elimination of four products from our lineup, which is very customary in the auto industry.

However, we are very excited about the new products coming in 2008. These include the legendary Dodge Ram pickup truck, the Dodge Journey crossover, the relaunch of the historic Dodge Challenger – which has already generated 8,851 customer orders – and two, all-new, large hybrid SUVs, the Chrysler Aspen and the Dodge Durango, demonstrating our support for the environment and more fuel-efficient vehicles.

For our current vehicle line-up we have already approved more than 260 line item improvements to enhance our products – most for the 2008 calendar year.

The recently completed national labor agreement with the United Auto Workers – which includes the establishment of an independent retiree health care trust – provides a framework to improve the long-term competitiveness of the company.

Since August and the first day of the new company, the management team has been working to improve Chrysler's working capital, disposing of non-core (or non-earning) assets and reinvesting this cash into product development, new technology and new innovations for our customers."


The following related statement can be attributed to Mark Neporent, Chief Operating Officer and General Counsel of Cerberus Capital Management L.P.:

"We remain extremely enthusiastic about our investment in Chrysler. Our underwriting assumed, and fully planned, that Chrysler would incur losses in the near term. Under the leadership of Bob Nardelli, Tom LaSorda and Jim Press, Chrysler is already on track to exceed its multi-year restructuring and recovery plan on virtually all key metrics. We met with the management team this week and fully endorse their strategic direction and their plan to meet the challenges of the current environment. We are confident that Bob, Jim and Tom are taking the right steps to bring Chrysler to profitability. Our mutual resolve to restore Chrysler to its leadership position as an iconic brand is unwavering."

[Ghoste]

In other words, the earlier report on poor cash in hand was really meant as a softener for some decision that we are about to announce that we know will upset somebody.

[70charginglizard]

"However, we are very excited about the new products coming in 2008. These include the legendary Dodge Ram pickup truck, the Dodge Journey crossover, the relaunch of the historic Dodge Challenger"

[hemihead]

I know a way they can save some cash . Get rid of some of the overpriced white collar dead weight and slash the overpriced salaries, benefit packages and stock options. Oh , instead this is were they want to rape the blue collar guys .

[68charger383]

Sounds like Ford just before they started closing some of the US plants and had major layoffs. Chrysler has some nice profitable subsidies...could be the set up to allow them to sell off some of these subsidies for some quick cash...

[hemihead]

On a side note -  So many of you people hate   DCX ( me included ) and the Charger / Magnum but you drool all over the new Challenger ? It is the same car just dressed up. A pig is still a pig in my book. I'll wait until a couple years until the American designed Mopars come out.

[J-440]

  Didn't the UAW pretty much screw GM and Chrysler all to hell?  From what I've been hearing, when they all re-negotiated a few years back, the employees got a ridiculous settlement contract that basically screwed the companies that they were working for.  I'm not too keen on the details but bought contracts, outrageous health benefits and basically money for nothing in certain instances were part of the deal.  Now I'm all for paying a worker a fair salary for a fair day's work but how much should a guy make working on an assembly line tightening the same nut over and over.  It might be the white collar corporate greed or the UAW that is forcing the Big 3 to assemble their cars in Mexico, Canada, and other places abroad. 
  I do know that the Japanese laugh at our business practices when we fire or hire someone.  Take for instance that nice lady CEO for Hewlitt-Packard that was let go a couple years back.  She started off making a ridiculous salary, got fired within 3 years and was prompty rewarded with $20 million and stock options.  What the hell kind of business are they running?  Anyway, we need to get back to the America of old and start whooping some ass again.  Our country is going into the toilet because of this crap.