Chrysler CEO Bob Nardelli: "Hands off, Fiat"
Fiat won’t be able to touch any of the “bailout” loan money provided by the U.S. government if it decides to move forward with its alliance with Chrysler LLC, says Chrysler Chairman Robert Nardelli.
In addition, Chrysler also said it is going ahead with a sweeping buyout of hourly workers at the company’s throughout its manufacturing system, which now has about 34,000 employees.
“Given the difficult economic and market conditions in the U.S., Chrysler LLC determined in December 2008 that it would offer another phase of its ‘Special Programs,’” said a company spokeswoman, adding that, “The original window to offer the programs was slated to begin in December and run into January, per an agreement with the UAW. Due to the fact that many of the company’s facilities had suspended production for extended periods in December and January, the program offerings are being rolled out now.”
Workers have until Feb. 25 to decided whether to accept the buyouts, which would provide up to $75,000 in cash and $25,000 to buy a vehicle to those who leave the company without retiring. The incentive for early retirement is $50,000 cash and a $25,000 voucher.
The latest program follows another buyout, in November, that saw some 5,000 salaried employees – or 25 percent of Chrysler’s white-collar workforce – agree to leave the company.
Meanwhile, Chrysler, which is under intense financial pressure, needs both the help from the U.S. Treasury and from Fiat if its going to survive in a market that’s damaging even the most robust carmakers
The alliance with Fiat S.p.a. offers Chrysler immediate access to new, fuel-saving technology and new vehicle platforms. “The Fiat alliance enhances our viability plan, and we’re pleased with the progress of our discussions with Fiat,” Nardelli said.
No taxpayer funds would go to Fiat, Nardelli said. However, the potential alliance could preserve jobs at Chrysler, he contended
The alliance would give Chrysler immediate access to substantially all Fiat group vehicle platforms, which would complement Chrysler’s current product lineup with fuel-efficient, environmentally-friendly small cars and powertrain technology, saving Chrysler years of development time and billions in costs, Nardelli said.
Chrysler would be able to increase its sales of Dodge, Chrysler and Jeep products outside the U.S. by using Fiat’s global distribution system. That’s a critical issue for a company that, despite years of effort to grow its foreign sales, still relies on North American buyers for roughly 90 percent of its total volume. By comparison, overseas operations currently account for more than half of General Motors’ total unit sales, and that company eventually expects the foreign share to reach 75 percent, according to Vice Chairman Bob Lutz.
As part of Chrysler’s initial viability plan, submitted to Congress in December, the company requested a $7-billion bridge loan. After extensive review, the U.S. Treasury awarded the company $4 billion of the $7 billion. Another $3 billion more could be distributed pending the interim review of the viability plan on Feb. 17. A final review will follow on March 31.