DETROIT Jan 11 Chrysler LLC's recent cost
cutting, including white collar layoffs and the exit of senior
executives, was not done with the goal of positioning the
company for sale, Chief Executive Bob Nardelli said on Sunday.
Nardelli, speaking on the sidelines on the first day of the
North American International Auto Show, said the automaker was
focused on making the business viable and intends to fulfill
conditions that were part of a $4 billion U.S. government
emergency loan it received on Jan 2.
"We reduced layers, expanded job responsibility...no one
around the table should read this as us trying to position it
for sale," Nardelli told a press briefing.
Nardelli said Chrysler, which had requested $7 billion, is
counting on getting the rest of the loans requested from the
government in order to keep operating.
Cash-strapped Chrysler received the emergency loan two days
after the government completed a similar payout to its larger
rival General Motors Corp. (GM.N)
Both Chrysler and GM have said they need the infusion of
government cash to meet obligations to suppliers at a time when
a plunge in auto sales has drained their cash reserves.
Under terms of the government bailout, Chrysler and GM must
meet certain cost cutting targets, including labor cost
reductions and debt restructuring, by mid-February and
demonstrate that they are viable by the end of March.
Nardelli said most of the funds Chrysler received from the
government went toward payments for suppliers, workers and
"We are still meeting all of our payment requirements," he
Chrysler, privately held and controlled by Cerberus Capital
Management [CBS.UL], faced the most intense scrutiny in
congressional hearings on the proposed industry bailout.
Some analysts doubt whether Chrysler can continue as a
independent entity. Its 2008 U.S. sales fell 30 percent,
compared to 20 percent falls at Ford and 23 percent for GM.
Nardelli said while the company is still open to
partnerships, its product pipeline shows that the company is
focused on turning around its business.
"The roll-outs we will have over the next few years are
significant and it demonstrates our commitment that we are a
car company and we do have strong viability," Nardelli said.
Nardelli said criticism that Chrysler was in "hibernation
mode" because of a decision to idle plants was "farthest from
Chrysler shut down all its North American factories for at
least a month from Dec 19 to cut costs, shore up cash and
reduce swollen inventories.
"We do have factories idled but we think we are being
responsive to make sure we are not churning out vehicles and
overloading our dealer lots," Nardelli said.
In wide ranging remarks, the CEO said merger talks with GM
that ended late last year had not restarted, but the company
has ongoing discussions with GM and cross-town rival Ford Motor
Co(F.N) on product exchange and other related partnerships.
Chrysler owner Cerberus owns 51 percent of GM's former
financing arm GMAC, with GM owning the other 49 percent.
Chrysler ended 2008 with just $2 billion in cash, Nardelli
said, adding that the "low point" for cash forecast in 2009 is
in January. Chrysler has $11.7 billion in cash at the end of
(Additional reporting by David Bailey. Editing by Peter