FACTBOX: Highlights of Chrysler's restructuring plan

(Reuters) - Chrysler LLC’s restructuring plan, submitted on Tuesday to the U.S. Treasury Department, said the company now needs a total $9 billion in taxpayer aid -- $2 billion more than previously expected.

Chrysler said its plan was based on industrywide car sales in the U.S. market totaling 10.1 million units in 2009, then rising to 11.6 million in 2012. That forecast was lower than Chrysler’s December projection, and represents a sales decline of about 720,000 units, based on the company’s 10 percent market share.

Availability of credit to consumers and dealers is the “single most important element of Chrysler’s viability,” the automaker told the U.S. government. It is “critical” that Chrysler Financial find a permanent funding solution, the company said.

The 177-page plan would help the company achieve a positive net present value of $17.3 billion after taking into account all existing and projected costs, including repayment of 100 percent of the Treasury Department loan, Chrysler said.

The plan also included:


Chrysler will cut dealer margins, eliminating fuel fill reimbursement, and cutting service contract margins.


The term sheets for labor and VEBA modifications will make Chrysler’s cost structure competitive with foreign automakers’ U.S. plants. However, the VEBA modifications are conditioned on further due diligence and satisfactory debt restructuring.


Chrysler is talking with suppliers and believes it can “obtain substantial cost reductions.” Chrysler also supports supplier associations’ proposals which would provide a government guarantee of automakers’ accounts payable.


Chrysler’s plan includes cutting $5 billion of outstanding obligations from certain creditor groups, which would also provide immediate cash flow from interest savings of between $350 million and $400 million annually.


Chrysler said its proposed Fiat alliance would help stabilize the U.S. auto market and help Chrysler repay its Treasury loan faster. “Chrysler’s intent is to build on its product alliances or form global alliances to enhance its viability. The company has proposed that a percentage of its new equity be retained in a trust controlled by the president’s designee to facilitate these alliances in the future.”


Chrysler suspended its 401(k) match, performance bonuses, merit increases, and eliminated retiree life insurance benefits.


Chrysler said it expects to receive U.S. Energy Department advanced technology funding of $2.5 billion in 2010, $2 billion in 2011, and $1.5 billion in 2012.

The Chrysler plan was posted on the Treasury Department's web site at: here

Reporting by Julie Vorman; Editing by Matthew Lewis