Chrysler LLC submitted its viability plan to the U.S. Treasury Department today, as stipulated by the Federal loan agreement.
In it, Chrysler mentioned that it will be cutting a few model lines, adding an electric car and oh, yeah, that it would like an additional $2 billion. That would bring its total loan request to $9 billion. The company has already received $4 billion. Chrysler says it didn't anticipate how bad the U.S. car market would be when it asked for $7 billion on December 2 of last year. Chrysler said in a statement that it would begin paying back the loans "with a premium" in 2012.
No surprise, Chrysler said it believes its viability plan would be "enhanced" by its proposed alliance with Fiat, since it would give the company access to fuel-efficient vehicles and distribution channels in growth markets. We'll see how the idea of more government money going to a company owned by a private equity firm, a German company and, potentially, an Italian company will go over in the current political climate.
What about cars and trucks? Well, Chrysler has reiterated what we already knew. Specifically, 2010 will see the introduction of a new Jeep Grand Cherokee, Dodge Charger, Dodge Durango and Chrysler 300. To bolster its case for its own fuel economy improvements, Chrysler notes that it will begin selling a two-mode hybrid version of the Ram, also in 2010. Again, no surprise. The statement also makes mention of an electric-drive vehicle, which is surely the Lotus-based Dodge Circuit. Chrysler goes on to state that "in the following years" the company will introduce extended-range electric vehicles.
Continue after the jump for more details.
Other specific actions for 2009 include:
* Reducing fixed costs by $700 million (to go along with the $3.1 billion in reduced fixed costs in 2008)
* Reduce total manpower by 3,000 people (that's on top of the 32,000 manpower reduction since January 2007)
* The discontinuation of three model lines. The company is playing a little fast and loose on this one. The three slated for death are the Dodge Durango, Chrysler Aspen and PT Cruiser, all of which were already announced to be cut. Last year, Chrysler cut The Dodge Magnum, Chrysler Crossfire, PT Cruiser Convertible and the Pacifica.
* Take out 100,000 units of capacity.
* Sell off $300 million of non-earning assets.
Dealers can expect reduced margins and the elimination of fuel fill. The company says that it has reached a tentative agreement with the UAW to make its work force cost structure competitive with transplant automotive manufacturers. That deal would still need to be ratified, though. And, naturally, Chrysler expects to put the squeeze on suppliers too.
Next up: General Motors' viability plan.
albook says:
03:55 PM, 02/17/09
"The statement also makes mention of an electric-drive vehicle, which is surely the Lotus-based Dodge Circuit."
That's incredibly stupid. How about an electric economy car.
jederino says:
04:28 PM, 02/17/09
Albook, are you going to buy an electric economy car within two years carrying a $10K premium for battery and driveline technology?
cwc1 says:
05:05 PM, 02/17/09
The Lotus based vehicle is probably an Elise, an incredibly light car. With a pure electric, minimizing weight is extremely important, which is why Tesla started with a Lotus based chassis as well. Lotus may have found its next niche.
Squeezing suppliers has been done already, which put some of them into bankruptcy, such as Delphi. So how much more savings can they get there?
lenoroc says:
06:06 PM, 02/17/09
This is just pathetic. Let's put the dog out to pasture already.
210delray says:
06:39 PM, 02/17/09
Just let Chrysler die! Why should we taxpayers have to keep this dead man propped up?
billt9 says:
06:48 PM, 02/17/09
Chrysler needs to be content with its One-Vehicle lineup, the Dodge Ram.
The only 2nd vehicle Chrysler should sell is its next-gen Sebring.
Otherwise kill everything else. Reduce production capacity to Dodge Ram and next-gen Sebring. Thanks.
iancar says:
08:43 PM, 02/17/09
I don't understand why the congress is so generous to bankers and financial planners who are actually gamble till everyone broke, but so harsh to the men and women who really put their hearts and retirements on the products they made.
brn says:
10:41 PM, 02/17/09
billt9, you forgot Jeep.
flicmod says:
05:36 AM, 02/18/09
are you going to buy an electric economy car within two years carrying a $10K premium for battery and driveline technology?"
What? It doesn't make sense to you to build a car that is more practical to the everyday driver? Plenty of people buy Prius' and they carry a pretty hefty premium. I'm sure there will be enough people out there to buy a purely electric vehicle as there were that bought the first gen Prius.
The Circuit is essentially a Tesla. There's no point to it. Practicality and utility rule in dire times. The Circuit just makes no sense.
isaacl says:
05:37 AM, 02/18/09
iancar.... if the men and women who really put thier hearts and retirements on the products they made...turned out stuff like the Sebring...Compass... and Journey...(among other lackluster models) and the parts that accompany those vehicles...(which are more prone to fail than most other manus)...then I'd be harsh on them to.
Look at EVERY review/comparo that involves a Chrsyler product..(besides the precious RAM) and that car will be last or next-to-last
Some heart and soul there
iskch says:
10:33 AM, 02/18/09
MR. PRESIDENT: TAKE CHRYSLER AND SELL IT IN PIECES TO THE BEST BIDDER!! THAT IS THE ONLY SOLUTION.
jederino says:
02:09 PM, 02/18/09
Flicmod, automakers have to build products people will purchase. The Prius is a hybrid, so is not really comparable to the compromises of an all-electric.
My point is that few are going to pay $30K or more for an all eletric "economy" vehicle with limited range, trimmed out to economy car standards. Not when you can have a Hyundai Accent for $12K that gets pretty good fuel economy and runs on inexpensive technology. Electric drivetrains are evolving quickly, are not economically compelling quite yet, and therefore are better suited to premium applications. For now.
ronvpr says:
04:36 AM, 02/20/09
Looks like a great line up. I would buy an new Chrysler minivan in a minute. I now have a Honda Odyssey that has gone through two transmissions, rattles, and rotors in 20k miles. I don't want my only choices to be sub-standard Asian brands, propped up by paid off media. I drove a Chrysler Town and Country the other day at the dealership next door, when I went to "visit" my Odyssey at the Honda dealership service bay. It is WAY better than my Honda. Quiet, dual DVD's, sto and Go seats in both rows that Honda doesn't even offer. And a lifetimne warranty to boot. I would say Honda should leave the US and not come back after all the troubles it has given me. I going back to the "Home Team'. Bye Bye Honda. I support Chryslers new line up. Only the nay-sayers who drive only imports are the sour pusses.
isaacl says:
11:12 AM, 02/20/09
ron, your experience is that of the slight minority. My stance echoes that of people in my life (work/school/social/family & other) who buy cars.
And basically, everyone who purchased a Chrysler product only did SO ONCE. And then did not buy another one again EVER.
Why you ask?
Becuase they were SCARRED.
Those who buy Hondas....buy Honda AGAIN, and AGAIN, and are happy.
Why you ask?
Becuase they live a much easier life driving the trouble free vehicle.