Auburn Hills, Michigan – Chrysler chairman and CEO Robert Nardelli has outlined highlights of the plan he will present to the U.S. Congress this week, when he will urge the immediate adoption of legislation that will allow domestic automakers to weather the current economic crisis and continue to invest in products, technologies and vehicles of the future.
Nardelli said that since Chrysler became an independent company in 2007, it has eliminated over 1.2 million units of capacity, or 30 per cent; reduced fixed costs by US$2.4 billion; separated over 32,000 employees; invested over half a billion dollars in product improvements in the first 60 days; improved the latest J.D. Power quality scores; and reduced warranty claims by 29 per cent. He also pointed out that alliances and partnerships, including agreements to produce vehicles for Volkswagen and Nissan, helped the company meet or exceed its operating plan in the first six months of 2008, ending the first half with US$9.4 billion in unrestricted crash. Nardelli also said that he will receive a salary of US$1 per year, with no employment contract, change of control agreement, or health care and life insurance benefits from the company.
The company is requesting funding to address the “unprecedented drop in vehicle sales caused by the financial crisis”, and plans to spend US$8.0 billion payments to parts suppliers, US$1.2 billion for other vendors, US$900 million in wages, US$500 million in heathcare and legacy costs, and US$500 million in capital expenditures. Nardelli said that without an immediate working capital bridge, Chrysler’s liquidity could fall below the level appropriate to ensure ordinary operations by the first quarter of 2009.
Chrysler said its product plan includes 24 major launches from 2009 through 2012, with 73 per cent of 2009 model-year vehicles offering improved fuel economy compared to 2008 models. The company plans to introduce the Ram Hybrid and its first electric-drive vehicle in 2010, with three additional models by 2012.
Nardelli said that he believes that the company will be “well-positioned” to begin repayment of the federal loans in 2012.