BALTIMORE (Reuters) - Chrysler LLC needs an emergency government loan to survive, the company’s president said on Tuesday, adding that bankruptcy for the smallest of the Detroit Three automakers was not an option and that alliances would be an important part of the industry’s future.
“We’re trying to preserve our way of life and preserve our jobs,” Jim Press told reporters at the Port of Baltimore, which exports 150,000 Chrysler vehicles annually.
“Our companies are under attack from a number of sources,” Press said of an industry reeling from the global credit crisis and the U.S. recession.
Chrysler’s retail share of industry U.S. sales fell about 30 percent in November. The full sales figures were due out later in the day.
Press did not say how much privately held Chrysler was seeking from the government to survive for the next year to 18 months. But Chief Executive Bob Nardelli told Congress last month the company needed $7 billion in emergency aid to make it through the industry’s worst-ever financial downturn.
Press also did not release details of the business plan Chrysler was submitting to Congress as a condition required by lawmakers for receiving any aid. He did say, however, the plan would include cost-cutting and givebacks from all stakeholders, including suppliers and labor.
Press stressed that bankruptcy was “not even in the realm of possibility” for Chrysler due to the industry belief that court protection for any of the Detroit manufacturers would steeply erode consumer confidence and devastate chances for a successful restructuring.
Auto company executives and their allies in Congress have also said the collapse of one or more of the Detroit Three would have widespread economic repercussions since industry figures show 10 percent of all U.S. jobs are linked in some way to General Motors Corp, Ford Motor Co and Chrysler.
Chrysler is controlled by Cerberus Capital Management.
Analysts have said Chrysler needs to spell out a plan to Congress that would allow it to assume some federal assistance even as it seeks to partner with other automakers.
Press said alliances will play a central role in the industry’s future. He said Chrysler has a plan to compete and was shifting products quickly and making other “tough choices.”
Indications are strong that Cerberus is preparing Chrysler for a break-up or sale, people close to the automaker have said. The company has taken steps that would make it easier to sell individual brands such as Jeep.
Several industry experts expect Chrysler to form alliances with multiple automakers and share costs by partnering on product engineering and development.
An attempt last month by GM, Ford and Chrysler to win a $25 billion bailout from Congress faltered after lawmakers concluded the companies had failed to make a strong enough case.
Additional reporting by Kevin Krolicki and Jui Chakravorty Das; Editing by John Wallace
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