This afternoon, Chrysler submitted to Congress an 18-page overview and a full 120-page plan detailing our plans for future viability as part of our request for a federal bridge loan to help us get through the current economic crisis and continue our transformation of Chrysler.
The plan addresses all the points spelled out in the letter we received from House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. I will appear on your behalf before the Senate Banking Committee on Thursday and the House Financial Services Committee on Friday to discuss our plans and answer questions from the committees. I will drive one of the company’s fuel-efficient hybrid vehicles to get there.
The plans we submitted to Congress answer the questions we’ve heard most often over the past few weeks, and I’d like to share a brief overview with you.
What changes has Chrysler made to help itself?
Since Chrysler became an independent company in 2007 and started our recovery and transformation to return to profitability: • We eliminated 1.2 million units of capacity, or 30 percent • We reduced fixed costs by $2.4 billion and separated more than 32,000 employees
And at the same time: • We invested in product improvement, including a half a billion dollars in our first 60 days • We improved our latest J.D. Power quality scores and reduced our warranty claims by 29 percent • We began transforming our business model through alliances and partnerships—including cooperative manufacturing agreements with VW and Nissan
As a result of the changes we made, Chrysler met or exceeded our operating plan through the first six months of the year, ending the first half with $9.4 billion in unrestricted cash.
In addition, as part of the shared sacrifice at all levels required of the plan, we are suspending the company match of 401(k) contributions. This is an action that we have taken before during tough times, and it is one we regrettably are forced to re-enact now
Why does Chrysler need the funding?
We need to address the unprecedented drop in vehicle sales caused by the financial crisis that interrupted our business transformation. U.S. sales are down from a 17 million unit selling rate in early 2007 to an annual selling rate of 11 units million for the fourth quarter in 2008—a 38 percent decline. We lost 20 percent of our sales virtually overnight when the financial market crisis forced us out of the consumer lease business. With customers not buying, with dealers not ordering, with our plants not producing, Chrysler’s cash inflow has suffered.
How will the bridge loan be used?
Cash will support ongoing operations as we continue to restructure the business, including in the first quarter alone: • $8 billion in payments to parts suppliers • $1.7 billion for other suppliers • $900 million in wages • $500 million in health care and legacy costs • $500 million in capital expenditures
Without an immediate working capital bridge, Chrysler’s liquidity could fall below the level appropriate to ensure ordinary operations by the first quarter of 2009.
Who is contributing to saving Chrysler?
First and foremost, Chrysler and its extended enterprise will. That starts with me. I receive a salary of $1 a year. I have no employment contract, no change of control agreement, no “golden parachute” and receive no health care or life insurance benefits from the company.
The suspension of the 401(k) match is part of this shared sacrifice. In addition, we are committed to negotiate concessions from all our constituents. In total, we’ve identified more than $8 billion in potential savings over the four-year period. Conservatively, only half of that is included in our projections.
How does Chrysler plan to build cars and trucks that consumers want to buy and that support the country’s energy security and environmental goals?
Our product plan features 24 major launches from 2009 through 2012. For the 2009 model year, 73 percent of our products offer improved fuel economy compared with the 2008 models. We’re also launching new smaller, fuel-efficient vehicles in conjunction with business partners.
ENVI is our breakthrough family of all-electric and range-extended electric vehicles. Our first electric-drive vehicle is planned for 2010, with three additional models by 2013. Chrysler’s product plan also includes the introduction of the Ram Hybrid in 2010.
Does Chrysler have a viable plan?
With federal assistance, we absolutely have a viable plan. I also believe that further partnership, restructuring and consolidation would make the U.S. auto industry more viable and competitive in the long run. Further opportunities for technology sharing would provide fuel-efficient cars and trucks more cost effectively, and with greater speed to market.
The three-company alliance that developed the dual-mode hybrid is a good example. As a country, we should not trade our dependence on foreign oil for a new dependence on foreign technologies.
When will Chrysler pay back this loan?
We will be well positioned to begin repayment of the federal loans in 2012. We recognize that this is a significant amount of public money. However, this is the least costly alternative considering the depth of the economic crisis and the options we face.
In this critical time for the company, the industry and for America, we continue to ask for your help. The e-mail sent yesterday details how you can contact your senators and representatives at GrabDemocracyByTheHorns.com and how you can send letters and videos for posting to GrabDemocracy*gmail.com. In addition, you can get on Chrysler’s **** at VoicesofChrysler.com and post your support for our company.
More than ever, this is the time to make your voice heard! I will be proud to share that voice with our members of Congress on Thursday and Friday. Please continue to visit The Scoop and Video Scoop all this week for on-going updates on our activities in Washington, D.C.
If you’d like to know more details about what we submitted to Congress, the entire plan is available for you to read at: (http://www.thescoop-cg.com/2008/12/02/chryslers-plan-for-short-term-and-long-te rm-viability/)
Bob
Posts: 2367 | From: Detroit | Registered: Mar 2005
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This is all just a really big joke being perpetrated on the American people. Does anyone really think that our idiot representatives (that gave Wall Street Fatcats $700 Billion with no strings attached) will refuse to bail out the Big 3 and the union employees that work for the Big 3? The bailout is on the way and $34 Billion is just the first installment. It may last until early spring! Then, on to round 2.
I am against ALL the bailouts. However, if we are going to bailout banks, insurance, states, deadbeat homeowners, credit card companies, etc, etc, etc - why not bail out the auto industry? That hardly seems fair.
Posts: 1577 | From: Ohio | Registered: Oct 2007
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quote:Originally posted by Propertymanager: This is all just a really big joke being perpetrated on the American people. Does anyone really think that our idiot representatives (that gave Wall Street Fatcats $700 Billion with no strings attached) will refuse to bail out the Big 3 and the union employees that work for the Big 3? The bailout is on the way and $34 Billion is just the first installment. It may last until early spring! Then, on to round 2.
I am against ALL the bailouts. However, if we are going to bailout banks, insurance, states, deadbeat homeowners, credit card companies, etc, etc, etc - why not bail out the auto industry? That hardly seems fair.
Just more quasi-cut-and-past righ-wing blather.
"I am against ALL the bailouts."
Of course you are. Sean Hanity, in his quest to destroy anything that can be considered a union and toward his love of destroying the middle class (each of which could resist a march toward that goal he desires), so as to generate a Fascist States of America, has told you to be.
Posts: 11304 | From: Fort Worth, Texas | Registered: Mar 2005
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I don't care about fair when it comes to protecting taxpayer money but I too am against all bailouts using public funds.
-------------------- No longer eligible for government service due to lack of tax issues. Posts: 5178 | From: Up North | Registered: Dec 2005
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posted
what is so hard to understand (for some people) is that the bailouts to everybody but the (now defunct) brokerage/commercial banks have been FORCED by traders.
or maybe i should say Traitors.
the "bailouts" would not be be needed by the auto industry if the financial industry had not collapsed.
there is nobody else to lend the auot industry the money they need. they need the money due to the extreme finacial absurditites we've seen over the last year.
it is not the the big three's fualt. it's not the fault of individual homeowners either,
it is the fault of the lenders that made the worst possible policy decisions for the last five years.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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"the "bailouts" would not be be needed by the auto industry if the financial industry had not collapsed."
YES INDEED!
And if we allow the auto industry in the U.S. to fail, then there will be no heavy industry left that the Nation can turn to in a true fight to the death. It, almost entirely, is what amounted to the overwhelming superiority that created the overpowering ability to wage war by the Allies in the two great wars. Without our industrial strength (read that auto industry), there would have been no victorys at Stalingrad or in North Africa or in the South Pacific or the Battle of Britain ........ and the trench war in Europe would have fallen to Germany long before our own entrance into the Great War.
With that in mind, assessing blame for their current financial status ceases to be important or even pragmatic. The U. S. must, as a matter of national defense (Wall Street's assessment of the financial worth or lack thereof of the auto industry be damned) keep them viable. Blame doesn't count when survival or absolute destruction of the Nation becomes the alternatives.
To hell with the free market's desires or goals! We are talking survival of America.
The great lesson to be learned from the New Deal is that, until political pressures allowed Roosevelt to demand that the auto industry turn its production capabilities to goals other than output of cars, complete recovery from financially created crises was impossible.
Not only must the auto industry be saved, so that we can have the necessary heavy industry to turn to in time of real danger, that industry must be required to participate in more than simply crafting stylish and economical vehicles......diversification and competition in other markets, even if that means doing so under the direction of the government. (green stuff?) The auto industry needn't and shouldn't be allowed to remain just "The American Auto Industry".
(The same workers and factories that design and construct SUVs can manufacture the construction equipment and parts that would be that new electricity grid and production machines that feed that grid. Those engineers that are now styling new body shapes and paints and computers to manage the operation of the internal combustion engines of those SUVs can concentrate on fuel cells and batteries and dynamic breaking and suspension in absolutely green transportation options, including highway safety and design.)
Posts: 11304 | From: Fort Worth, Texas | Registered: Mar 2005
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quote:it is the fault of the lenders that made the worst possible policy decisions for the last five years.
Which is why we should have let the fail, claim bankruptcy, create a panel in each state that goes through the mortgages of any pre-foreclosures and fix the paper if it was unreasonable, and then sell the loans to a responsible lender.
Then go through the rest of their papers and close any and all quasi-legal shelters that they cooked up like they did with the rail car deal.
There should also be a headhunter party out right now looking for the heads of those who defrauded the public, the industry, and the government.
We will not get investors back into the mortgage bond sector until they are sure the junk is out of the system and the lender network is trustworthy. If things were running normal right now a 30 yr mortgage would be running under 5% right now with where the bonds are at currently. And where we at is only because fannie is artificially creating this environment. If individuals were actually participating in that market like they used to the coupon price would be even higher and rates would be even lower.
-------------------- No longer eligible for government service due to lack of tax issues. Posts: 5178 | From: Up North | Registered: Dec 2005
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quote:it's not the fault of individual homeowners either
RIDICULOUS! Of course it is. If a homeowner borrowed more than they could afford, it's their fault! If a homeowner borrowed using ridiculous gimmick introductory rates - it's their fault! If a homeowner refinanced over and over and is now upside down on their loans - it's their fault! They should be foreclosed upon and their house taken away. Likewise, any lender that made these loans and investors who bought this worthless paper are also responsible for their stupidity and they should be also allowed to fail!
Posts: 1577 | From: Ohio | Registered: Oct 2007
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quote:it's not the fault of individual homeowners either
RIDICULOUS! Of course it is. If a homeowner borrowed more than they could afford, it's their fault! If a homeowner borrowed using ridiculous gimmick introductory rates - it's their fault! If a homeowner refinanced over and over and is now upside down on their loans - it's their fault! They should be foreclosed upon and their house taken away. Likewise, any lender that made these loans and investors who bought this worthless paper are also responsible for their stupidity and they should be also allowed to fail!
people with money to lend are supposed to protect their/our money. that's why they get the big paychecks. they didn't protect it. so they went to Bush and told him they had to have more or the depression was coming, cuz it was.
you think in two dimensions and you make it clear with every post that you cannot penetrate the veil of illusion that your propagandists have spun for you.
we've been robbed. not just of cash, but of a way of life that the country shared.
in your hate-filled mind? you see poor lazy slobs everywhere, that's the life you chose for yourself.
i see honest hard-working people everywhere that are struggling to earn enough to buy their kids christmas presents, and spend all their spare time trying to help them get athletic scholarships to college cuz that's the only way they are going to get out of labor positions.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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I agree with PM. No bailouts! The auto industry will not disappear if GM goes into chapter 11, they will have to reorganize just like any other company with a poor plan.
What our government is doing now is weaking us for future generations.
-------------------- Let's Go METS!!! Posts: 3317 | From: CT | Registered: Dec 2006
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quote:Originally posted by Lockman: I agree with PM. No bailouts! The auto industry will not disappear if GM goes into chapter 11, they will have to reorganize just like any other company with a poor plan.
What our government is doing now is weaking us for future generations.
see? you don't understand how many honest restaraunteurs, parts suppliers, subsidiaries and retail merchants will be filing two weeks after they do.
you really think this is caused by individuals borrowing too much on their homes?
Pauslon went to China July '07 and BEGGED the Chinese to lend more mortgage money, they said no... the house of cards collapsed a month later.
everybody WAS saying the Chinese were not very "sophisticated" in their finacial practice. those people saying that sounded like thanksgiving turkeys to me
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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quote:Originally posted by Lockman: I agree with PM. No bailouts! The auto industry will not disappear if GM goes into chapter 11, they will have to reorganize just like any other company with a poor plan.
What our government is doing now is weaking us for future generations.
see? you don't understand how many honest restaraunteurs and merchants will be filing two weeks after they do.
you really think this is caused by individuals borrowing too much on their homes?
Pauslon went to China July '07 and BEGGED the Chinese to lend more mortgage money, they said no... the house of cards collapsed a month later.
everybody WAS saying the Chinese were not very "sophisticated" in their finacial practice. those people saying that sounded like thanksgiving turkeys to me
When do the bailouts stop? Every industry in the U.S. is going to be asking for bailouts in the near future. We can screw around and prolong the inevitable but at some point someone is going to have to take a dive. Why not do it now while we still have a viable government to oversee the carnage.
-------------------- Let's Go METS!!! Posts: 3317 | From: CT | Registered: Dec 2006
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When do the bailouts stop? Every industry in the U.S. is going to be asking for bailouts in the near future. We can screw around and prolong the inevitable but at some point someone is going to have to take a dive. Why not do it now while we still have a viable government to oversee the carnage.
they stop when everybody realises that we have to socialise medicine to compete. because we are the ONLY industrialised nation (were industrialised, i don't think we really are anymore) that doesn't have it.
they stop when we put a reasonable import tax on every single thing we import. including fuels.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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posted
Why stop with socialized medicine? Everyone needs a home so why don't we come up with a formula to determine how many square feet of living space we each should be allowed?
Why not just nationalize the auto industry and only make auto's based upon an individuals needs? We could limit the amount workers are paid and because they no longer have to worry about medical or housing needs everything will be real nice.
-------------------- Let's Go METS!!! Posts: 3317 | From: CT | Registered: Dec 2006
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Maybe what Chrysler should be doing is showing their plan to investors and see if anyone thinks it's a good enough plan to invest in. That's the way our economy use to work.
-------------------- Let's Go METS!!! Posts: 3317 | From: CT | Registered: Dec 2006
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quote:Originally posted by Lockman: Why stop with socialized medicine? Everyone needs a home so why don't we come up with a formula to determine how many square feet of living space we each should be allowed?
Why not just nationalize the auto industry and only make auto's based upon an individuals needs? We could limit the amount workers are paid and because they no longer have to worry about medical or housing needs everything will be real nice.
i'm not happy about this stuff either Lock,
but it's too late to close the barn door..
maybe i should point out how many white collar jobs will be lost too?
advertising of all types?
it just doesn't end.
when the kid has an earache you get antibiotics, you don't throw the kid out in the cold to find out how tough they are.
why wasn't anybody pointing out how stupid all this stuff was before the economic engine threw a rod?
in China? most factory workers live in company owned housing (dorms). shop in company owned stores. kinda like the mining towns here before WW2...
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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"they stop when we put a reasonable import tax on every single thing we import. including fuels."
Add skilled labor, particularly scientifically skilled labor, to those thing imported!
I cannot count on all the fingers and toes on the hands and feet of a whole crowd of people the Americans I have seen deprived of graduate education in the sciences and engineering or employment therein, so that foreigners could be brought to fill those positions.
That, IU can declare, while having the experience and qualifications to reach a professional judgment that the general and average overall talent, educational development, and talents of those rejected is not less than that of the imported.
Posts: 11304 | From: Fort Worth, Texas | Registered: Mar 2005
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quote:Originally posted by bdgee: "they stop when we put a reasonable import tax on every single thing we import. including fuels."
Add skilled labor, particularly scientifically skilled labor, to those thing imported!
I cannot count on all the fingers and toes on the hands and feet of a whole crowd of people the Americans I have seen deprived of graduate education in the sciences and engineering or employment therein, so that foreigners could be brought to fill those positions.
That, IU can declare, while having the experience and qualifications to reach a professional judgment that the general and average overall talent, educational development, and talents of those rejected is not less than that of the imported.
and that is why i don't hold the GOP strictly individually liable bdgee.
when i have posted here in the past? i have been called a liberal and a socialist. when i associate with ejerkatud libarel tipes? i am called a hick, gorrilla, caveman and even a hillbilly and mountainman by some.
but i have never changed my viewpoint
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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quote:Originally posted by bdgee: "they stop when we put a reasonable import tax on every single thing we import. including fuels."
Add skilled labor, particularly scientifically skilled labor, to those thing imported!
I cannot count on all the fingers and toes on the hands and feet of a whole crowd of people the Americans I have seen deprived of graduate education in the sciences and engineering or employment therein, so that foreigners could be brought to fill those positions.
That, IU can declare, while having the experience and qualifications to reach a professional judgment that the general and average overall talent, educational development, and talents of those rejected is not less than that of the imported.
and that is why i don't hold the GOP strictly individually liable bdgee.
when i have posted here in the past? i have been called a liberal and a socialist. when i associate with ejerkatud libarel tipes? i am called a hick, gorrilla, caveman and even a hillbilly and mountainman by some.
but i have never changed my viewpoint
Your such a glass blower! LOL
-------------------- Let's Go METS!!! Posts: 3317 | From: CT | Registered: Dec 2006
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posted
Hey, Glassman's post summed it all up. I fully agree that its not the people's fault or the big 3. Its the stupid banks that gave money to people over and over...refinancing homes, extending credit to people who are living out of the means. I blaime the government for giving the damn banks all that money too...they shouldn't of bailed out the BANKS!!! They could of giving us all the money and we could pay our bills. But I haven't had time to read my original post just yet. Will read it all at work.
By the way...we only make $30 an hour....we have 1/2 the workforce compared to 10 years ago. We are more productive then ever. We have tons of robots that replaced jobs that people did. That is why the job bank was set up to ensure that the workers have jobs by forcing the company to utilize the workers better. Some robots were needed because some jobs were dangerous. But I feel that a lot of people HATE US and don't understand that we work our butts off every day.
Posts: 2367 | From: Detroit | Registered: Mar 2005
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But I feel that a lot of people HATE US and don't understand that we work our butts off every day.
IMO? those people that are communicating that? and there's lots of 'em; just hate life in general and want to spread their gloom...
speaking for myself? i do alot of critisizing, but i usually do it with the intent to see some sort of good come of it, even if it's only trying to pry open closed minds
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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I ain't sure you can pry open a closed mind, whatever you have as a pry bar. What seems to work, just every now and then, is to set them to working on trying to justify their most obnoxious notions and that stewing may create enough pressure on the inside to to crack the shell.
Posts: 11304 | From: Fort Worth, Texas | Registered: Mar 2005
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quote:Originally posted by IWISHIHAD: R1 Man, why are you sending me a PM that i should read your report you posted, and that you work at Chrysler?
Is there something i am suppose to see or something that is suppose to be different because you work there or you post a topic?
I already saw it.
I actually own a chrysler and my brother did.
He had so much trouble with his, he said he would never own another one, he sold it at 60,000 miles.
I like mine.
I've had two chrysler mini vans... like clock work I needed a new transmission at 80,000 miles. Seems that's the norm according to the transmission dealer.
-------------------- Let's Go METS!!! Posts: 3317 | From: CT | Registered: Dec 2006
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The market cannot support all the auto manufactuers so somebody has to go.
The population of the country did not make weak market conditions.
I don't think a chapter 11 will damage the image of any of the big three anymore than begging for money.
Its to late for our auto industry to say I am sorry for the way they did business and what they did with there money.
As far as I am concerned if they need money sell thier foriegn assettes and stay in business here or go broke.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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"I've had two chrysler mini vans... like clock work I needed a new transmission at 80,000 miles. Seems that's the norm according to the transmission dealer."
posted
I had a dodge product once a dodge aspen brand new in 1978.
And I could not dump it fast enough, I knew it was not a Rolls Royce but the damn thing could not even get me back and forth to work.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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Out of curiousity, what is the mark up on a new vehicle vs the actual cost to produce. I know it varys from brand to brand just wondering if the standard is like 30%, 40%
Posts: 316 | Registered: Jun 2006
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The mark up on domestic cars from msrp to invoice depending on the amount of extra options are on the car is 8 to 17 percent. This does not inclus holdback ,dealer cash,or rebates which are really manufactuors incentives,but they do lower the price of the vehicle
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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I found out today that they locked the contract rules on STRIKE. We can no longer go on strike until 2024. Geez....guess they can say we can all make $10 a hour and eat a fat D*CK and all we can do is say...not fair and quit. Hmmm....but the clause says they can adjust wages to be competetive. So Honda and Toyota lower their wages...Chrysler can lower mine.
Now when we voted on the concessions...they never once said we had the no strike clause. I think the union is PRO-MANAGEMENT!!!
Posts: 2367 | From: Detroit | Registered: Mar 2005
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quote:Originally posted by R1 Man: I found out today that they locked the contract rules on STRIKE. We can no longer go on strike until 2024. Geez....guess they can say we can all make $10 a hour and eat a fat D*CK and all we can do is say...not fair and quit. Hmmm....but the clause says they can adjust wages to be competetive. So Honda and Toyota lower their wages...Chrysler can lower mine.
Now when we voted on the concessions...they never once said we had the no strike clause. I think the union is PRO-MANAGEMENT!!!
As they should be. The Unions saw the end game, make concessions or fade away. IMO, it was either do or die with the auto unions. At least people still have jobs.
-------------------- It is impossible to make anything foolproof because fools are so ingenious. Posts: 3311 | From: St. Louis | Registered: Feb 2005
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