Chrysler CEO sees "clear path" to survival

By Soyoung Kim and Chelsea Emery

DETROIT/NEW YORK (Reuters) - Bankrupt Chrysler has a clear path to an alliance with Italy's Fiat SpA, the U.S. company's chief executive said while rival Ford Motor Co reported on Wednesday it has sufficient liquidity and its restructuring remains on track, boosting its shares.

The White House also expressed growing confidence Chrysler would restructure quickly and Wall Street put new pressure on shares of General Motors Corp, which faces a June 1 deadline to turn itself around or face probable bankruptcy.

Analysts, on average, expect GM on Thursday to report a first-quarter loss of $11.05 per share before items, compared with a loss of 62 cents a year earlier. Revenue is expected to fall by about half to $21 billion, reflecting lower production with sales off sharply, according to Reuters Estimates.

In a memo to employees obtained by Reuters on Wednesday, Chrysler CEO Robert Nardelli hailed a ruling on Tuesday by U.S. Judge Arthur Gonzalez of the New York bankruptcy court that upheld the company's plan for selling virtually all of its assets, a step necessary for it to complete the Fiat alliance.

"This is a major step forward as it sets out a swift, clear path," Nardelli said. "It is crucial that this transaction be completed in a timely manner in order to secure maximum value for our stakeholders."

But Chrysler still faces objections from nine lenders, who say the proposed bidding process for assets would be non-competitive and would not maximize the sale price.

Lawyers said the hold-out creditors have the law on their side in their opposition to the current plan, which proposes making Chrysler's union the largest shareholder.

FORD ON TRACK, GM SHARES FALL

Ford Motor Co remains on track in its restructuring and has sufficient liquidity to fund the plan which includes conversion of plants and investment in future products, company executives said.

Ford, the only U.S. automaker not operating under bailout funds, also has continued to consolidate its dealer network, but sees no need for the type of aggressive culling rivals GM and Chrysler plan, Chief Executive Alan Mulally told reporters.

The automaker continues to anticipate a second-half recovery in U.S. auto industry sales, he said.

Mulally also said Chrysler's bankruptcy has not led to difficulties with the supply base so far.

Ford also announced $550 million of investments in a former truck plant near Detroit that is being converted to produce small cars with demand growing for more fuel efficient vehicles. GM and Ford are racing to develop electric cars.

The Ford investment comes at a time when restructurings by Ford's U.S. rivals GM and Chrysler include plant closings and reworked labor deals.

GM began reaching out to rivals late last year about the profitable OnStar service and talks with other automakers center on partnering mainly in the United States, OnStar President Chet Huber told Reuters in an interview.