Nardelli: Chrysler won't cut capital expenditures

Bradford Wernle
Automotive News
December 14, 2007 - 12:01 am ET

Chrysler CEO Bob Nardelli

DETROIT -- Although the industry is facing a potentially difficult 2008, Chrysler LLC will not cut its capital expenditures next year, Chrysler Chairman Robert Nardelli told journalists Thursday evening.

“We'll spend about the same year over year” in 2008, Nardelli said at the company’s annual media Christmas party here. He did not list a figure. He also promised the company would slash fleet sales for 2008.

Nardelli said Chrysler can afford to spend the money on new product development even though he told employees earlier this month Chrysler would lose about $1.6 billion in 2007.

Nardelli described Chrysler's approach as “aggressively conservative” in recent cutbacks in production and in deleting five models.

“We hope we were aggressive enough getting ourselves right-sized relative to the targets we laid out for ourselves,” he said.

Nardelli also said Chrysler plans to reduce its fleet sales in 2008 closer to industry averages. He said 20 percent would be a good target.

Chrysler has been at or near the top of the industry in sales to fleets, including sales to rental fleets, considered less profitable. About 30 percent of Chrysler's unit volume went to fleets during the first nine months this year.

Industry analysts say 20 percent is a more desirable number for Detroit's carmakers. Asian carmakers' averages are substantially lower.