Remember Bob Nardelli – the ex CEO of Chrysler. Well, Nardelli thinks that the Obama administration didn’t need to give Chrysler over to Italian automaker Fiat SpA in order to save the Auburn Hills automaker. Apparently, Nardelli believes that his private equity firm Cerberus Capital would have done a better job in bringing Chrysler back from death.

Nardelli, who stepped down from his CEO position at Chrysler in 2009, says he ‘laments all the time’ that private equity firm Cerberus, for which he still works, is no longer running Chrysler.

“If the government gave us the deal they gave Fiat, we’d be doing just fine — really,” Nardelli said in an interview with The Detroit News. “There was no reason for the government to give Chrysler away.”

He said that Chrysler would be faring “just as well, maybe better” under Cerberus.

Back in March 2009, the U.S. government rejected Cerberus turnaround bid for Chrysler and its request for $5 billion in aid. It then forced Chrysler to team up with Fiat, which now holds a controlling stake.

We think Chrysler is doing just wonderful right now.

- By: Omar Rana

Source: Detroit News

Chrysler Group LLC Headquarters

In his tell-all book due out this fall, former Car Czar Steven Rattner reveals how Chrysler came within a hair of going the way of Lehman Brothers, and being allowed to fail. A majority if the auto task force actually voted against offering aid to Chrysler, and it was only after a tense meeting with the president that Chrysler was offered federal aid.

The story goes back to October of 2008, when after the Senate refused to help Chrysler, then CEO Bob Nardelli tried to urge the Treasury to force GM to acquire Chrysler, but GM hadn”t wanted to get involved in such a deal as they saw the overlap in business of the two companies to be too cumbersome and inefficient. When the merger made no progress, Rattner reports that Steve Feinberg of Cerberus Capital, Chrysler’s owner, called Treasury Secretary Henry Paulson at 2 a.m. on December 19th with an offer to turn Chrysler over to the U.S. government for $1.

It was finally determined that Chrysler was worth much more as an entity alive than it was dead, despite the reluctance of Rahm Emanual and other White House staff to aid the company.

Regardless the case, the book offers tremendous insight into the opinions of high level officials with regard to the bailouts and the unions, and promises to reveal some interesting facts.

- By: Stephen Calogera

Source: CNN

Former Chairman and CEO Bob Nardelli, who will be returning to his duties at Cerberus Capital Management, sent the following farewell letter to Chrysler employees:

Dear Employees,

Congratulations!

I am pleased to report that we have closed the alliance agreement between Chrysler Group LLC and Fiat S.p.A. and have emerged from bankruptcy in record time. Chrysler Group now is a leaner, healthier and more robust company ready to compete in the challenging economy as an important player in the global automotive industry.

As I announced on April 30, the completion of this alliance agreement is an appropriate time for me to step aside and return to Cerberus Capital Management. But in leaving, I want to share some parting thoughts with you and express my everlasting appreciation for the work you have done, the sacrifices you have made and the support you have shown me during my time as Chairman and CEO of Chrysler LLC.

This is my farewell message to you.

When I joined Chrysler 20 months ago, I was immediately impressed by the deep intellect of Chrysler people, by your dedication and loyalty to the company and by your passion for innovation, design and great products. All of my experiences since then have reinforced those initial impressions.

What I have learned along the way is that Chrysler people also have the resolute heart of a scrappy underdog. This is a company that has been knocked down many times, but never knocked out. The global economic downturn and the credit crisis have severely tested Chrysler’s ability to survive. But our employees, retirees, the UAW, CAW, dealers, suppliers, lenders, our owners Cerberus and Daimler, and other stakeholders have rallied together and made the sacrifices necessary to restructure and reposition Chrysler and give it a new lease on life and the opportunity for long-term success. No one should ever doubt the tenacity of the Chrysler spirit and its rich legacy.

During the darkest hour of the American Revolution, Thomas Paine wrote of the “sunshine patriot” who disappears when the going gets tough. I have found there are no sunshine patriots at Chrysler-just men and women who stand tall and persevere, who never lose hope or faith despite adversity and the negativism from this great industry’s detractors. You are men and women who believe in the company, in each other and in a better future.

During my 38 years in business, I’ve never faced a tougher challenge. Even with our early and aggressive restructuring efforts, we could not offset the negative impact of the financial crisis and the severe economic recession. However, because of those efforts, we gained credibility and the support of the U.S. Treasury, which provided funds to assist us through this transitional period. The global automotive industry is fiercely competitive, and international economic forces have left even the largest automakers awash in red ink. At Chrysler, we have had to take significant restructuring actions to adjust to the new market realities. From August of 2007 through May 2008, we saw the impact of the declining SAAR on our current market share result in the loss of 610,000 units of production, or about $14 billion in revenue.

At the same time, we continued to invest in the restructuring of the company, including $7 billion in 2008 alone. We took important steps to improve quality, which resulted in the lowest warranty cost in the company’s history and the lowest recall rate in the industry in 2008. These efforts will pay off even more in the years to come. We strengthened our commitment to a customer-focused culture. We maintained our commitment to a strong product pipeline, with 24 new vehicles planned during a period of 48 months. For 2009, 73 percent of our product lineup offers greater fuel economy than last year’s models and, going forward, our robust electric-vehicle strategy will help meet national concerns about energy security and climate change.

The newly signed alliance with Fiat is a direct result of our strategy to pursue partnerships to drive growth. Chrysler and Fiat will be an excellent fit in terms of product, geographical strengths and culture. Using Fiat’s distribution system, Chrysler will be able to substantially increase the global reach for the Chrysler, Dodge and iconic Jeep® brands in markets outside of North America. Fiat will bring vitally important small platforms and advanced powertrain technology, broadening our portfolio of offerings and providing customers with exciting fuel-efficient products that they will want to buy. This alliance also will significantly enhance our ability to compete and comply with the new CAFE standards.

I want to express my deep gratitude to my staff at Chrysler as well as to our owners at Cerberus and Daimler, who provided steady and unstinting support throughout our efforts to revitalize the company and enable it to survive. I’d also like to thank President Obama’s administration, the U.S. Treasury Department, the President’s Automotive Task Force, the Canadian government and the province of Ontario, as well as our partners at the UAW and the CAW, for their continuing support in helping us complete this alliance. Their efforts will help to protect the livelihoods of many thousands of people in the Chrysler work force and the many others who depend upon those workers.

With the appointment of a new board of directors and the selection of Bob Kidder as Chairman and Sergio Marchionne as CEO, I am confident that Chrysler will continue to build on its proud 85-year heritage and remain an integral part of American life for many years to come. The road ahead will always have hurdles, but I strongly believe that Chrysler will meet every challenge and will build a bright future as part of a vibrant new company.

It has been my privilege to share in the rich Chrysler legacy and to serve as your Chairman and CEO. I’ve never been involved with a more talented, passionate and committed group of men and women. The dedication you have shown to your company and to each another has been truly remarkable.

I also want to express my deep appreciation to the entire Detroit-area community for welcoming and accepting me during my time with Chrysler. In my many years in business, I have worked in 14 different cities. Detroit and the auto industry have done so much to shape our country’s history, and I feel tremendously proud to have been a part of this dynamic community and a company so committed to its revitalization.

I thank you from my heart, and I hope that the coming years bring good fortune and prosperity to each of you, your families and to everyone associated with the great Chrysler team.

Sincerely,

Bob

- By: The Daily Auto Editor

Source: Free Press

As reported last night, the Supreme Court approved the sale of Chrysler LLC to Fiat SpA after the process faced delays earlier this week. Today, Chrysler completed the sale of its strongest assets to Fiat SpA into a new company known as Chrysler Group LLC. The new company will begin operations immediately.

Fiat CEO Sergio Marchionne will now become CEO of Chrysler and former CEO Bob Nardelli will return to his former position at Cerberus Capital Management.

Fiat currently owns a 20 percent stake in Chrysler Group LLC and will increase its stake to 35 percent when certain milestones mandated by the agreement are achieved.

Fiat cannot obtain majority control of Chrysler until all taxpayer funds are repaid.

55 percent of Chrysler Group LLC is owned by a UAW retiree health care trust fund, 8 percent is owned by the U.S. Treasury and 2 percent is owned by the Canadian government.

- By: Omar Rana

Source: Reuters

Last month when Chrysler listed most of its $2 billion assets in bankruptcy court, the Auburn Hills automaker said that it didn’t have any firm offers for its Viper brand, which was put up for sale last August. The only offer that Chrysler listed was a $5.5 billion bid by Devon Motors Works.

Now there is a new twist to the Viper story. A California congressman asked former CEO Bob Nardelli to disclose information on a $35 million bid for Viper. He said that the offer hand been hidden from Chrysler’s bankruptcy filing.

In a letter to Bob Nardelli, Rep. Darrell Issa, Calif. said that the lack of disclosure about the information on the bid suggests that Chrysler’s bankruptcy was mishandled. He said that Chrysler must provide proof that Fiat SpA was not trying to get rid of Viper altogether in order to eliminate a rival to its Ferrari unit.

Issa said that a group of investors had been exploring to buy Chrysler’s Viper business in March and April. He said that the group had spoken to Louisiana officials and that the office has a record of a sales agreement that was never signed.

“If it is the case that Fiat used its ‘hard-fought’ superior bargaining position to establish as a condition of the merger a requirement that Chrysler allow the Viper brand to disappear in order to reduce competition for Ferrari, this too must be presented to the court, said Issa.”

All we can say is – Sergio Marchionne may have been threatened with the Dodge Viper SRT10 ACR’s 7:22.1 Nurburgring lap.

- By: Omar Rana

Source: Free Press

Chrysler’s CEO Bob Nardelli said today that he expects the sale of the automaker’s assets to a new company to be completed by Friday. He said that regulatory approvals will be finalized and he will step down as the company’s CEO.

Nardelli said that he plans on returning to his former post at Cerberus Capital Management on Monday morning. Nardelli, who worked for Cerberus until July 2007, was asked to run Chrysler in August 2007.

He went onto explain that Chrysler’s financial troubles started late last year and put the company in a ”situation of not having enough liquidity to keep the doors open.”

He wrapped up his hearing saying that he favored keeping Chrysler independent, as opposed to the partnership with Fiat SpA.

Fiat will take a 35 percent share in Chrysler and will change the name of the new company to Chrysler Group LLC.

- By: The Daily Auto Editor

Source: Detroit News

Chrysler officially announced today that C. Robert Kidder, former Chairman of Borden Chemical Inc. and Duracell International Inc., will become Chairman and CEO of Chrysler LLC once it completes its global alliance with Fiat SpA. He will replace current CEO Bob (Robert) Nardelli.

“I am pleased to join Chrysler at a time when Chrysler is poised to launch an exciting new era,” said Kidder. “I am confident that Chrysler will emerge from Chapter 11 a lean and powerful competitor, combining its own rich history of innovation with Fiat’s technology and expertise to invigorate the American car market and to challenge other car companies around the globe.”

Shall we call him Bob Kidder?

Click through for the official statement from Chrysler.

Press Release:

C. Robert Kidder to Become Chairman of Chrysler Group LLC

Auburn Hills, Mich., May 20, 2009 - Chrysler LLC today announced that C. Robert Kidder, former Chairman of Borden Chemical Inc. and of Duracell International Inc., will become Chairman of Chrysler Group LLC, once it completes its acquisition of the operating assets of Chrysler LLC and completes a global alliance with Fiat SpA. He will succeed Robert L. Nardelli.

“We are most fortunate that Bob Kidder will lead the new company through its transformation,” said Nardelli. “My number one priority has been to preserve Chrysler and the livelihoods of thousands of people who depend on its success. With his broad expertise serving on numerous world-class boards and his accomplished business background, Bob will provide the leadership and strategic counsel that will help to create a strong global competitor moving forward.”

With more than 40 years of experience, Kidder currently serves on the boards of Morgan Stanley, where he is the lead director, Schering-Plough Corporation, and Microvi Biotech Inc. He previously has served as Chairman and Chief Executive Officer of both Duracell International Inc. and Borden Chemical Inc. and as director of such companies as Electronic Data Systems Corporation and General Signal Corporation. During his tenure with McKinsey and Co. Inc., Bob worked with a major OEM client in the automotive industry. Bob currently is Chairman and CEO of 3Stone Advisors LLC, an investment firm that focuses on clean-tech companies. He holds an M.S., Industrial Economics from Iowa State University and a B.S., Industrial Engineering from the University of Michigan. He resides with his family in Columbus, Ohio.

“I am pleased to join Chrysler at a time when Chrysler is poised to launch an exciting new era,” said Kidder. “I am confident that Chrysler will emerge from Chapter 11 a lean and powerful competitor, combining its own rich history of innovation with Fiat’s technology and expertise to invigorate the American car market and to challenge other car companies around the globe.”

Chrysler LLC announced on April 30, 2009, that, as a result of the comprehensive restructuring plan agreed to by many of its stakeholders, it had reached an agreement in principle to establish a global strategic alliance with Fiat to form a vibrant new company.

On the same day, Chrysler LLC and 24 of its wholly-owned U.S. subsidiaries also filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the Southern District of New York. Chrysler also filed a motion under Section 363 of the Bankruptcy Code requesting the swift approval by the Court of the agreement with Fiat and the sale of Chrysler’s principal assets to the new company. The benefit of this type of filing is speed. It will allow a leaner new company to emerge in less than 60 days from the time of filing, well positioned for long-term viability.

Nardelli, Chrysler’s Chairman and CEO since August 2007, announced on April 30 his plan to leave the company following the completion of the transactions. He will return to Cerberus Capital Management LP as an advisor. He said that it was “an appropriate time to let others take the lead in the transformation of Chrysler with Fiat, and I will work closely with all of our stakeholders to see that this new company swiftly emerges with a successful closing of the alliance.”

As stated in the terms of agreement, upon successful completion of the alliance, a board of directors for the new company will be appointed. The majority of the directors will be independent (not employees of Chrysler or Fiat). The board will select a CEO with Fiat’s concurrence.

- By: Omar Rana

On April 30th, Chrysler’s CEO Bob Nardelli said that he will be stepping down after Chrysler emerges from bankruptcy. He said that following Chapt. 11 hearings, the U.S. government will select six board members, while Fiat will select three. That new board would select a new CEO for the new company, Nardelli said. Well, Chrysler may already have a new CEO.

In an interview with Bloomberg yesterday, Fiat CEO Sergio Marchionne said that he will head Chrysler LLC (if it is still called that after bankruptcy) once it emerges from Chapter 11 bankruptcy.

“Chrysler is on track to re-emerge from bankruptcy in 60 days,” Marchionne said. “I will become Chrysler CEO after that.” The idea has been discussed in meetings with the U.S. Treasury, he told Bloomberg.

- By: Kap Shah

Source: Reuters

So you think you have what it takes to become Chairman and CEO of Chrysler LLC and replace the soon-to-be-former CEO Bob Nardelli. Well, you better be ready to have your salary capped without the likeliness of receiving any additional compensation.

Whoever replaces Bob Nardelli will have the tough job of rebuilding Chrysler with Fiat technology, U.S. government money and a salary that may be capped at $500,000.

The $8.08 billion in aid being given to Chrysler for its bankruptcy and recovery efforts by the U.S. government is one of the first to fall under the U.S. Department of Treasury’s tougher rules for executive compensation.

The rules, set by Treasury Secretary Timothy Geithner, would cap the new CEO’s salary at $500,000 and since Chrysler will be privately held for years to come (by Fiat, the UAW retiree health-car and the U.S. and Canadian governments) there is no chance of any shares being made available for additional compensation.

Nardelli will be leaving the company as soon as Chrysler comes out of bankruptcy. He had agreed to a $1 a year salary as CEO of Chrysler.

- By: Omar Rana

Source: Free Press

During our live blogging session earlier this morning, Chrysler CEO Bob Nardelli said that he will be stepping down from his position after the company emerges from bankruptcy. He made it clear that the decision was his own and that the U.S. Treasury had not asked him to resign.

According to AutoObserver, Nardelli will return as an advisor to private equity firm Cerberus Capital Management, which owned Chrysler before the Fiat deal was announced earlier today.

Former CEO Tom LaSorda, who is currently vice chairman and president, said that he will be retiring. While LaSorda did not provide an official date, he said that he will not stick around and watch Chrysler go through Chapter 11 bankruptcy.

Chrysler’s President Jim Press said that he has had no discussion regarding his future role in Chrysler. 

Earlier this morning we learned that following Chapt. 11, the U.S. government will select six board members, while Fiat will select three. The new board will then select a new CEO for the new alliance.

- By: Omar Rana

Source: AutoObserver

Just for those of you that love reading press releases, Chrysler has officially released a statement regarding its new partnership with Fiat SpA. 

“This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages,” said Bob Nardelli, Chairman and CEO of Chrysler, who said he will be stepping down once Chrysler is done going through Chap. 11 bankruptcy.

Chrysler said it will also file a motion under Section 363 of the Bankruptcy Code requesting approval by the Court with Fiat and the sale of the company’s principal assets to Fiat. Chrysler said that a “leaner new company” should emerge in the matter of 30 to 60 days.

Click through for the press release.

Press Release:

Chrysler LLC and Fiat Group Announce Global Strategic Alliance to Form a Vibrant New Company

Auburn Hills, Mich., Apr 30, 2009 – Chrysler LLC today announced that, as a result of the comprehensive restructuring plan agreed to by many of its stakeholders, it has reached an agreement in principle to establish a global strategic alliance with Fiat SpA to form a vibrant new company. It will allow Chrysler and Fiat to fully optimize their respective manufacturing footprints and the global supplier base, while providing each with access to additional markets. Fiat powertrains and components will also be produced at Chrysler manufacturing sites.

“This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages,” said Bob Nardelli, Chairman and CEO of Chrysler. “It enables us to better serve our customers and dealers with a broader and more competitive line-up of environmentally friendly, fuel-efficient high-quality vehicles. Benefits to the new company include access to exciting products that complement our current portfolio, technology cooperation and stronger global distribution.”

Chrysler initiated discussions with Fiat more than a year ago to develop plans for a global product alliance. Over the past several months, these discussions have evolved and expanded. Chrysler and many of its stakeholders worked tirelessly to agree upon concessions that will result in a significantly lower cost base and enable fulfillment of a broader strategic alliance.

“We want to personally assure everyone that the new company will produce and support quality vehicles under the Jeep®, Dodge and Chrysler brands as well as parts under the Mopar® brand. Chrysler employees will become employees of the new company. Chrysler dealerships remain open for business serving our customers. All vehicle warranties will be honored without interruption and consumers can continue to purchase our vehicles with complete confidence,” explained Nardelli.

Despite substantial progress on many fronts, Chrysler was not able to obtain the necessary concessions from all of its lenders, which would have avoided the need for a bankruptcy proceeding. As a result, under the direction of the U.S. Treasury, Chrysler LLC and 24 of its wholly owned U.S. subsidiaries today filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the Southern District of New York.

“Even though total agreement was not possible, I am truly grateful for all that has been sacrificed, on the part of many of Chrysler’s stakeholders to reach an agreement in principle with Fiat,” said Nardelli. “My number one priority has been to preserve Chrysler and the thousands of people who depend on its success. While I am excited about the creation of the global alliance, I am personally disappointed that today Chrysler has filed for Chapter 11. This was not my first choice. ”

Chrysler also will file a motion under Section 363 of the Bankruptcy Code requesting the swift approval by the Court of the agreement with Fiat and the sale of Chrysler’s principal assets to the new company. The benefit of this type of filing is speed. It should allow a leaner new company to emerge in a matter of 30 to 60 days, well positioned for long-term viability.

Nardelli, who has been leading Chrysler since August 2007, also announced to Chrysler LLC’s Board of Management and the U.S. Treasury his plan to leave the company following the emergence of the new company from Chapter 11 and the completion of the alliance with Fiat. He will return to Cerberus Capital Management LP as an advisor. “Now is an appropriate time to let others take the lead in the transformation of Chrysler with Fiat,” said Nardelli. “I will work closely with all of our stakeholders to see that this new company swiftly emerges with a successful closing of the alliance.”

During the restructuring process, the government will provide sufficient debtor-in-possession (DIP) financing to allow continuation of “business as usual.” The company will seamlessly honor warranty claims, pay suppliers and keep our dealer body operating to continue to serve our valued customers.

“To create this vibrant new company, we are using this structured bankruptcy to rapidly implement tough but necessary changes, including: the agreed upon wage and benefit structure for active and retired employees that is competitive with those of transplant manufacturers; a reduction of debt and interest expense; the disposition of idle assets; a rationalized and more efficient dealer network; and sound agreements with our suppliers,” said Nardelli.

Chrysler’s Mexican, Canadian and other international operations are not part of any bankruptcy filing.

As part of the restructuring and with the backing of the U.S. Treasury, we have reached an agreement in principle with GMAC to become the preferred lender for Chrysler dealer and consumer business. GMAC will be able to offer the best long-term finance options for Chrysler dealers and customers with standard rate installment products.

When the transaction is completed, the Voluntary Employee Beneficiary Association (VEBA) will own 55 percent of the new company and the U.S. and Canadian governments will own proportionate shares of a 10 percent stake. Fiat will initially hold a 20 percent ownership stake in Chrysler. Fiat will have the right to increase its ownership stake an additional 15 percent in three increments as it meets the following criteria: 5 percent for bringing a 40 mpg vehicle platform to Chrysler to be produced in the U.S.; 5 percent for providing a fuel-efficient engine family to be produced in the U.S. for use in Chrysler vehicles; and 5 percent for providing Chrysler access to its vast global distribution network to facilitate the export of Chrysler vehicles. Fiat cannot become a majority owner until after all U.S. government loans have been completely repaid.

As a part of the restructuring, most manufacturing operations will be temporarily idled effective Monday, May 4, 2009. Normal production schedules will resume when the transaction is completed, which is anticipated within 30 to 60 days.

“We want to recognize the Administration, the U.S. Treasury, President’s Auto Task Force, as well as Members of Congress and representatives at the state and community level and Canadian Federal and Ontario Provincial governments for their energy and efforts in helping to move this new company forward,” Nardelli said. “It is also important to acknowledge Cerberus and Daimler, which provided the foundation for the alliance as well as Chrysler’s many other stakeholders including the UAW and CAW leadership, employees, dealers and suppliers. Without their deep sacrifices, unstinting loyalty and enduring belief in Chrysler, the alliance would not have been possible. We look forward to our new partnership with Fiat. To be sure, there will be many changes as we move forward to implement our plans. But today, from many great parts, we begin to build a vibrant new company with less debt, a stronger balance sheet, richer product portfolio, supported by a well-positioned finance company.”

- By: Omar Rana

The members of the United Auto Workers have ratified a contract with Chrysler on the eve of the government-imposed deadline for the Auburn Hills automaker to show its viability in the long-term.

82 percent of production workers and 80 percent of skilled-trades workers voted in agreement, while 90 percent of office and clerical workers voted in favor of the agreement. 94 percent of UAW-represented Chrysler engineers also voted for approval. The agreement includes “modifications to the union’s 2007 collective bargaining agreement with Chrysler and modifications to the Voluntary Employee Beneficiary Association (VEBA) trust.”

“This has been a challenging time filled with anxiety and uncertainty for our membership,” said UAW President Ron Gettelfinger in a statement. “Our members have responded by accepting an agreement that is painful for our active and retired workers, but which helps preserve U.S. manufacturing jobs and gives Chrysler a chance to survive.”

The UAW said that the concessionary settlement agreement will take effect on May 4 and meets the requirements set by the U.S. Treasury for Chrysler to get more government loans. It said that the agreement includes commitments from Fiat to produce a new small car in one of Chrysler’s U.S. facilities (we’re guessing that would be the Fiat 500).

Click through for Chrysler’s statement.

Chrysler LLC Statement in Response to UAW Ratification of Contract

Auburn Hills, Mich., Apr 29, 2009 - Chrysler LLC Statement in Response to UAW Ratification of Contract, Attributed to Tom LaSorda, Vice Chairman and President:

“We are thankful to the Chrysler UAW members for their support in ratifying this contract, especially during these challenging times. This was a necessary step as we move forward in revitalizing this great Company. Today’s vote enables us to continue our work to meet the conditions laid out by the U. S. Treasury Department. The entire Chrysler leadership team believes in and appreciates the men and women that make up our great workforce worldwide.”

- By: Omar Rana

Tomorrow is April 30th. To many it’s just another day on the calendar but to us and Chrysler, it is the deadline for the Aurburn Hills automaker set by the Obama administration to restructure and partner with Fiat.

Obama to announce Chrysler bankruptcy tomorrow:  Obama plans to announce tomorrow that Chrysler will be placed into Chapter 11 bankruptcy. A report by Bloomberg said that following a short bankruptcy, Chrysler will form an alliance with Fiat. – Bloomberg

Nardelli finally talks: The other day we were wondering why Chrysler’s CEO hasn’t spoken to the media with the April 30th deadline just around the corner. Today, Bob Nardelli told the Associated Press that Chrysler is progressing towards meeting the government’s restructuring requirements. Anyone else think Nardelli’s always political with his answers? – MSNBC

“I”m encouraged by this progress and I want you to know I deeply appreciate the sacrifices made by so many constituents to help us reach the restructuring targets established by the government.”

Tata Nano waiting list could stretch for years to come: Who would’ve thought that a waiting list for a 35-hp minicar could go head-to-head with the likes of Lamborghini, Ferrari and Aston Martin. Roughly 1 million customers throughout India have signed up to buy the $1,983 Nano. – Inside Line

Honda suspends business travel due to… you guessed it – Swine Flu: Honda has canned all global business trips for its employees. The suspension will be in place until May 6. – AutoCar

- By: Omar Rana

So it’s been a pretty crazy morning for the automotive industry with GM officially announcing the death of Pontiac. Of course many of you are wondering what’s going to happen to Pontiac’s product lineup. Well, we have some bad news for you.

CEO Fritz Henderson made it clear today no Pontiac car will be rebadged as Chevrolets – that includes the G8 and the Solstice. As for the Pontiac Vibe, Henderson said the vehicle could be built well into 2010, pending negotiations with manufacturing partner Toyota.

Should the Pontiac G8 become a rebadged Chevrolet Camaro SS Sedan? Straightline seems to think so. If there can be a BMW M3 sedan why not a four-door Camaro? They do have a point. – Straightline

GM may sell all of Opel: Henderson says that GM is in talks with several investors interested in buying Opel. – Detroit News

Today is the last day for Chrysler workers to choose to leave the automaker: Chrysler’s 26,000 hourly workers must decide whether to accept a buyout by today. – Free Press

Speaking of Chrysler – where the heck is Bob Nardelli? We think it’s about time he gave the media an update as to what’s going on inside his office at Auburn Hills. April 30th is only 4 days away Nardelli – speak up!

- By: Kap Shah

Sources familiar with the matter said that Fiat will move forward with a Chrysler LLC alliance even if the company is forced to enter bankruptcy. Insiders said that Fiat officials will continue to work with the U.S. Treasury Department to complete an agreement, reports Automotive News.

Chrysler has until this Thursday, April 30th, to complete a deal with Fiat and its stakeholders. If Chrysler cannot complete the deal with either party, it will be forced into bankruptcy. The Obama auto task force has said that Chrysler will get another $6 billion in federal loans if the company can secure a future with Fiat and stakeholders.

Over the weekend, the CAW ratified a deal with Chrysler that would save the struggling automaker $240 million a year. The UAW has also reached a deal with Chrysler on labor concessions subject to ratification.

“I see no reason why it cannot happen,” Fiat CEO told analysts and reports last week. “I can only confirm our unwavering commitment to get this transaction done. We see benefits to both Fiat and to Chrysler.

- By: The Daily Auto Edtior

Bruno Vitali, head of the automotive sector of the Fim-Cisl Italian union, said that he met with UAW President Ron Gettlefinger today. A reported by Italian wire service ANSA quoted Vitali saying that the “Fiat-Chrysler deal is ready and could be signed as soon as this afternoon.” According to Automotive News, the publication said that Vitali said that the deal was “90 percent done.”

Vitali said the UAW and CAW had both accepted Chrysler and Fiat’s requests.

Fiat later released a statement denying Vitali’s comments.

“No agreement has been concluded between Chrysler and trade unions in the U.S. and Canada and the assertion that the overall agreement has been 90% defined is untrue. The talks remain completely open and it is not currently possible to predict the timing or the outcome.”

Vitali later told Reuters that there had been “no agreement regarding the Chrysler issue. The UAW also released a statement quoting Gettlefinger saying that the talks are “ongoing.”

- By: Omar Rana

Chrysler’s CEO Bob Nardelli and president Tom LaSorda sent out a letter to Canadian employees on Friday, warning that if the 8,000 factory workers do not agree to pay cuts, Chrysler will no longer build vehicles in Canada.

Canadian Auto Workers (CAW) president Ken Lewenza responded to the letter calling it “an unprecedented and outrageous series of attacks on Canadian autoworkers and their union.”

You can read the letter after the jump and decide for yourself.

Click through for the full letter.

Dear Employees,

Today, we are at a crossroads in the history of Chrysler. Let’s take a look at what’s happened in the past few weeks.

On February 17 and February 20, Chrysler submitted its Viability Plan to the U.S. Treasury and U. S. Administration; and to the Canadian governments, respectively.

On March 30, U.S. President Barack Obama stated that Chrysler’s Viability Plan was unacceptable. “It’s with deep reluctance but also a clear-eyed recognition of the facts that we’ve determined, after careful review, that Chrysler needs a partner to remain viable.”

He went on to state: “I’m committed to doing all I can to see if a deal can be struck in a way that upholds the interests of American taxpayers. And that’s why we’ll give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement — and we will provide Chrysler with adequate capital to continue operating during that time. If they are able to come to a sound agreement that protects American taxpayers, we will consider lending up to $6 billion to help their plan succeed. But if they and their stakeholders are unable to reach such an agreement, and in the absence of any other viable partnership, we will not be able to justify investing additional tax dollars to keep Chrysler in business.”

U.S. President Obama has made it clear that our company must attain competitive labour rates: “Now, what we’re asking for is difficult. It will require hard choices by companies. It will require unions and workers who have already made extraordinarily painful concessions to do more … It will require efforts from a whole host of other stakeholders, including dealers and suppliers.”

Also on March 30, the Honourable Tony Clement, Minister of Industry, said, “While the restructuring plans represent progress, they do not go far enough to ensure the long-term viability of these companies. Therefore, we are not certifying their proposals. Together with our U.S. counterparts we believe that further fundamental changes are needed.”

Just this week, Fiat CEO Sergio Marchionne has made it clear that an alliance is contingent on the UAW and CAW meeting transplant all-in labour rates: “Absolutely, we are prepared to walk. There is no doubt in my mind,” Marchionne was quoted as saying. “We cannot commit to this organization unless we see light at the end of the tunnel.”

The Canadian government has been very supportive of our viability, providing a loan of $1 billion (CDN, $750 million drawn to date), with an agreement to provide additional support in proportion to the loans received from the U.S. Treasury.

On April 14, the Canadian governments, both federal and provincial, invited the CAW and Chrysler to attend a meeting in Toronto where they laid out four specific guidelines that must be met for providing further financial support. Their “asks” were:
1. That labour costs be reduced to a level equal to those of Toyota Canada. We believe that a Canadian benchmark is the appropriate one for you to achieve. We ask that you jointly demonstrate to us that the agreement you reach attains this benchmark.
2. That Chrysler complete an alliance with Fiat that, in return for equity participation gives Chrysler access to Fiat management, Fiat technology, Fiat sales and distribution outside of NAFTA, and distribution of Fiat products inside NAFTA.
3. That Chrysler and Fiat submit revised plans to Canadian governments and U.S. Treasury based on appropriate assumptions that show clearly Canadian production, product mix, capital investment and R&D.
4. That Chrysler and Fiat commit to maintain Canada’s proportion of North American production and to invest over the medium term that same share of total capital investment and R&D expenditure in Canada.

Let’s keep in mind, the all-in labour costs at Chrysler Canada are $76 per hour while the Toyota Canada all-in rate is approximately $57 per hour.

While we have made some progress with the CAW, it falls significantly short of closing the $19 gap. And yet, as recent as Wednesday this week, the CAW continues to ignore this clear mandate from the government stating that they will not go any further. This unwillingness to work within the government’s guidelines jeopardizes the future of Chrysler and our operations in Canada.

We have made several proposals to the CAW to offset these costs, without affecting base wages and pensions. Some specific examples include:

Prescription drug dispensing fees, by eliminating the cap results in estimated savings of $2.16 per hour.

Elimination of out-of-province health care coverage (snowbirds), with employees and retirees assuming responsibility for any coverage results in a cost savings of $1.00 per hour.

The change from semi-private hospital room coverage to “ward” coverage saves an estimated tiny_XX.97 per hour.

Elimination of life insurance for current and future employees results in a cost savings of $1.54 per hour.

The reduction of shift premiums to 2.5 percent results in a cost savings of $.80 per hour.

By increasing health care premiums would save an estimated $1.04 per hour.

The elimination of non-traditional benefits such as child care, legal services, tuition reimbursement, dependant scholarships and extended health care coverage (chiropractic services, massage therapy, naturopath, orthotics, etc.) results in a cost savings of tiny_XX.73 per hour.

Unfortunately, the CAW has been opposed to these solutions – however, we are open to alternative ideas. Next week, we plan to meet with the CAW to attempt to reach an agreement that is acceptable to Fiat and the Canadian government.

The clock is running. Without labour concessions, Chrysler Canada’s manufacturing operations will not survive long-term. Thousands of good-paying jobs are in jeopardy, as well as the economic health of communities such as Windsor and Brampton.

Canada has always been an important manufacturing and sales market for Chrysler LLC. It represents the largest vehicle sales market for Chrysler outside of the U.S. and no other vehicle manufacturer has a larger portion of its total manufacturing in Canada than Chrysler.

However, these are not normal business circumstances and all Chrysler constituents have been asked to “break pattern” – employees, retirees, dealers, suppliers and others.

Time is very short. We have only two weeks before a final decision must be made. Let me be clear, our negotiations are about saving Chrysler Canada. We are coming down to the wire in the fight for our company’s survival – and we need your support.

Bob Nardelli
Tom LaSorda

- By: Omar Rana

Earlier this month, we’re briefly touched on the subject of Chrysler’s board being shuffled around if a proposed partnership with Fiat goes through. However, today we’ll just say what may soon become inevitable. Chrysler’s current boss Bob Nardelli may be asked to step down by Fiat and the U.S. Treasury as the two will select a new round of board of directors, seeing Chrysler and Fiat do partner-up by the April 30th deadline.

In an e-mail to employees today, Nardelli said that he didn’t know what this means for him, but raises the possibility of Fiat’s CEO Sergio Marchionne taking over the steering wheel in Auburn Hills. Earlier this week, Marchionne said he would do whatever it takes to revive Chrysler, even takeover as CEO of the struggling automaker.

The biggest obstacle remaining between proceeding with the deal are the talks with the Canadian Auto Workers. Marchionne said earlier this week that Fiat would walk away from the proposed partnership if the CAW failed to erase a $19 gap between Chrysler’s hourly labor in Ontario and what Japanese automakers pay their Canadian workers. Talks will resume on Monday

- By: Omar Rana

Source: Free Press