By Jeff Green and Greg Miles
May 15 (Bloomberg) -- Chrysler LLC, the third-largest U.S. automaker, is ahead of its 2008 goals for generating cash and running the business, and will post a ``significantly lower'' loss than in 2007, Chief Executive Officer Robert Nardelli said.
``We're not out looking for more money,'' Nardelli, 59, said in a Bloomberg Television interview today. ``We're not going to run out of cash.'' He said he isn't considering bankruptcy or selling the Jeep brand.
Chrysler's ability to bring in cash takes pressure off owner Cerberus Capital Management LP, which is also trying to win support for a $3.5 billion bailout of the mortgage arm of its GMAC LLC unit. Cerberus owns 80.1 percent of Chrysler and bought 51 percent of GMAC from General Motors Corp. in 2006.
``We're generating cash very favorably, and adding to that stockpile going forward,'' Nardelli said. This year's loss will be ``significantly lower'' than 2007's $1.6 billion deficit, he added, without giving a figure.
After at least $2.2 billion in losses in the last two years, Chrysler is working to reduce expenses amid an 18 percent slide in U.S. sales through April. In November, the Auburn Hills, Michigan-based automaker canceled four models, cut 12,000 jobs and pared production in anticipation of falling sales.
U.S. Auto Market
Chrysler will continue to adapt to a weak U.S. auto market, Co-President Tom LaSorda, 53, said in the interview.
He said the company is ``right-sized'' for industrywide sales of about 15.3 million cars and trucks this year, which would mark a decline from last year's 16.1 million vehicles. Industrywide sales tumbled 7.7 percent this year through April.
Chrysler's U.S. market share through April was 12.5 percent, down from 14 percent a year earlier, in part because of the model cuts and reduced sales to rental car companies.
Fitch Ratings lowered Chrysler's corporate issuer default rating to B from B+ last week, citing the slides in sales and market share. ``Liquidity is expected to remain adequate over the near term to fund restructuring costs and operating losses,'' Fitch said.
In January, Nardelli said Chrysler ended 2007 with $1 billion more cash than anticipated.
As Nardelli works to end losses at Chrysler, Cerberus is trying to help GMAC's Residential Capital LLC mortgage unit avoid bankruptcy.
Rescap is offering to exchange or buy back $14 billion of bonds and is seeking to finance it with a $3.5 billion loan from GMAC. Should the mortgage unit default on the loan, Cerberus and GM are in talks to guarantee repayment of the first $750 million.
New Management, Focus
Cerberus appointed Nardelli, the former CEO of Home Depot Inc., to run Chrysler three days after taking over the 82-year- old automaker in August, demoting then-CEO LaSorda to president.
The company won't build a Chrysler-brand version of the Dodge Journey sport-utility vehicle in 2009 and will use the savings to help pay for designing a compact car to be manufactured by Nissan Motor Co., Press said in a May 12 interview.
The move reflects a push toward more fuel-efficient vehicles and Chrysler's goal of eliminating overlap between its brands. Abandoning the SUV will also leave Chrysler with fewer new or revamped products to introduce in 2009, putting the automaker at risk for further declines in market share, analysts said.
Press has said the automaker needs about half of the SUV models it currently sells. Chrysler dropped the Pacifica SUV, PT Cruiser convertible, Crossfire car and Dodge Magnum wagon in November.