Chrysler to give details next month, he says in memo
Chrysler LLC Chairman and CEO Bob Nardelli told employees that the automaker will share more details next month on its reorganization.
Chrysler CEO Bob Nardelli told workers late Tuesday to expect more information next month on how the struggling automaker will reorganize "to adapt to its new realities."
At the moment, the Auburn Hills automaker is "totally focused on putting together our loan request presentation as we concentrate on the critical business issues at hand," the chief executive told workers in a message obtained by the Free Press.
Last week, Congress refused to authorize $25 billion in bridge loans to Detroit's struggling automakers, demanding that plans for viability be submitted by Dec. 2.
As executives at General Motors Corp. examine operations, they are discussing "all options," including whether the company should reduce its brands, a person familiar with the deliberations told the Free Press.
GM, which is seeking up to $12 billion in government loans, is expected to present a shorter, public version of its plan and a longer, confidential version for lawmakers. The automakers are to testify to the House Financial Services Committee Dec. 5. The Associated Press reported that the Senate Banking Committee will take testimony Dec. 3.
Ford could seek as much as $8 billion, but has said it may not need the money; Chrysler is seeking $7 billion. Executives at both GM and Chrysler have said their companies are in danger of reaching minimum levels of cash needed to sustain operations.
In his memo, Nardelli said Chrysler is prepared "to meet the 'accountability and viability' criteria requested and is ready to share our plans for returning Chrysler to profitability."
At the same time, Chrysler is trying to eliminate about 5,000 white-collar positions -- on top of the 29,000 job cuts already announced.
Salaried workers at Chrysler face a deadline today to sign up for buyout and retirement packages; they have until Nov. 30 to rescind. Chrysler has said involuntary separations will occur in December.
"Without question, 2008 has been a year of challenge and change, and next month will be no different," Nardelli said. "With a smaller team to face this difficult business environment, the company must once again adapt to its new realities."
"Beginning in December, more information regarding changes to how we will organize and operate will be available," he added. He thanked those workers leaving "for all they have done."
Nardelli reiterated his belief that cooperation within the industry is essential. "A collaborative approach could help government dollars go further and help achieve important national policy objectives related to energy security and environmental improvement," he wrote.
"For example, instead of the government giving each company a dollar to separately spend on technology, there should be ways to pool the investment to develop a shared technology that would benefit all three domestic automakers (much as we've already done with hybrid technology working with GM and others)."
In the short term, Nardelli said, Chrysler needs the federal aid to support ongoing operations. "Our goal is to emerge as a company that is leaner and more agile, and committed to relentlessly improving the quality of our products and our focus on customers," he said.
Nardelli told his workers that Chrysler, while appreciating the effort, could not -- "from a financial perspective" -- be involved as a participant or sponsor of efforts by suppliers and industry supporters to caravan to Washington as a sign of support for the automakers.
On Tuesday, GM announced the indefinite extension of the suspension of employee purchases of its shares under two benefit plans, Bloomberg reported. GM had planned to end the restrictions during the week of Nov. 9.
The news service also quoted a report from Himanshu Patel, a JPMorgan industry analyst, as saying GM must lower its profitability threshold to a U.S. market of 13 million vehicles from 16 million required now, a move that would require cutting $4.2 billion in additional costs, split between creditors and labor.