Monday, December 1, 2008

Problems with another person

It seems we have an enemy within the blogging community.

This site is dedicated to those who rather have a centralized reporting portal when there is any news relating to Chrysler LLC vice in hunting down or filling one e-mail in basket with 1000s of e-mails per day. Our goal as passionate Chrysler employees and fans, to sift through 100 or perhaps, 1000 news gram per day.

Sorry for any inconvenience this may had impose for today.

Wednesday, November 26, 2008

Cerberus claims it was misled in deal for Chrysler

By TOM KRISHER , 11.26.08, 04:42 PM EST

Relations between Chrysler's current and former owners turned ugly Wednesday when private equity firm Cerberus Capital Management LP accused Daimler AG of "intentionally and materially" misleading Cerberus before the German automaker sold Chrysler last year.

Both sides slugged it out with dueling news releases. Cerberus claimed Daimler breached the sale contract, while Daimler called the allegations absurd.

The unusual public feud likely is a prelude to arbitration or a lawsuit over the sale, said Peter Henning, a former Securities and Exchange Commission attorney who teaches at Wayne State University Law School in Detroit.

Cerberus' statement accused Daimler of misrepresenting changes in underwriting practices for vehicle financing and leasing. That means Cerberus is alleging that Daimler inflated the value of its lease and loan portfolio by lending money to buyers who didn't meet its lending standards, Henning said.

Cerberus, he said, is essentially saying that "Daimler gussied Chrysler up to make it look good."

They made it look better than it was and didn't disclose it, or actually even worse than not disclosing it, made misrepresentations," Henning said.

By making the allegations public, Cerberus appears to be conceding that its Chrysler investment hasn't gone well for the New York private equity firm.

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"They expected Chrysler to be one thing, and in fact, it turned out to be something quite different," Henning said. "It's simply a statement that this company was a lot worse off than Cerberus thought when they got into the deal."

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This Day in Auto History:

11.26.1878
Richard Ralph Hallam Grant of General Motors is born in Ipswich, MA
11.26.1899
Herbert Willetts of the Mobil Oil Corporation is born in Troy, NY
11.26.1927
The Chrysler Imperial Series L80 is introduced
11.26.1946
The Dearborn Motors Corporation is organized to market Ford tractors
11.26.1953
Female racer Desire Wilson is born in Johannesburg, South Africa

Source: Automobile History Day By Day, by Douglas A. Wick

In tough times, Detroit auto show drives on

Some firms aren't coming to Cobo event, but Ford and GM unveiling key models

Plans for the 2009 North American International Auto Show have been scaled back, and some automakers have backed out.

BY BRENT SNAVELY • FREE PRESS BUSINESS WRITER • November 26, 2008

As economic pressure builds on automakers, the impact on the 2009 North American International Auto Show in Detroit threatens to cut into much needed revenue for charities, catering companies and exhibit builders.

This year's event will be without seven automotive manufacturers that typically fight for precious space at Cobo Center, and many of the manufacturers that remain are cutting back on activities.

"Scaling back would be an understatement," said Scott Stubbs, president and chief executive officer of Warren-based H.B. Stubbs Cos., a company that builds exhibits for automotive companies. "There is a real imperative to cut costs and save on cash."

The auto show is perhaps the region's most important annual event, both from a glitz and real-dollar perspective. But much like the rest of Detroit, the show is feeling the effects of cost-cutting across the industry.

Each January, the event draws about 6,000 journalists from across the globe -- helping to maintain Detroit's profile as an automotive center.

It also draws hundreds of thousands of public visitors and annually raises about $6 million for 11 children's charities in a one-night event, which attracts about 15,000 people.

Charity preview a priority

But ticket sales have slowed for the charity preview -- the region's highest-grossing annual single-night fund-raising event.

"As an organization that was one of the founding partners of charity preview, we are thrilled with the event, but we are very concerned this year," said Len Krichko, president and CEO of the Boys & Girls Clubs of Southeastern Michigan.

Last year's charity preview raised about $6 million, and the portion that goes to the Boys & Girls Club is a significant part of the organization's annual budget.

Joe Serra, senior cochairman of the auto show, said sales of the $400 tickets for the charity preview are down about 3% from where they were at the end of November last year.

"That is the one event where I am going to plead to the public for support, because as we all know, those dollars go to children's charities," Serra said.

Last year, a short concert featuring Barenaked Ladies took place after the preview at Cobo Arena. Serra said organizers plan to hold a similar concert this year and add another undisclosed major entertainment event to boost ticket sales.

Serra said the auto show is bringing back an invitation-only event called the Gallery for wealthy individuals who are shopping for luxury cars such as Maserati, Lamborghini, Maybach and Bentley.

Manufacturers depart

Nissan Motor Co. stunned the Detroit Auto Dealers Association, the event's organizer, on Monday when it became the first major automaker to exit from this year's auto show.

Nissan said its decision was based on the big splash it made at the Los Angeles Auto Show earlier this month and the economic realities that the auto industry is facing.

"This is not in any way a commentary on auto shows in general or any auto show specifically," said Nissan spokesman Alan Buddendeck.

Other manufacturers that have backed out include Mitsubishi Motors Corp., Rolls-Royce, Land Rover, Ferrari and Suzuki. Porsche Cars North America Inc. was not part of 2008 show and is not returning for 2009.

Detroit's niche

Still, Serra said he is expecting that the show will feature about 45 new production and concept vehicles.

"Every show has their niche," Serra said. "And the Detroit show, our niche is the media. And in more cases than not, when these scale-backs happen ... that niche plays into our favor."

Even though General Motors Corp. has canceled its annual fashion show called GM Style, spokesman Scott Fosgard said the company plans to introduce three important vehicles -- Buick LaCrosse, Cadillac SRX and Chevrolet Equinox.

"Detroit is actually going to be a very big show for us," Fosgard said. "Now, we may not be doing all of the show-biz and Vegas-type actions, but I think we are going to have a lot of news, and we are going to do it in a way that is very cost-efficient."

Toyota Motor Corp. has canceled a news media event it typically holds at the Detroit Athletic Club, but plans to unveil its third-generation Prius and a new Lexus hybrid.

Honda Motor Co. still plans to hold a news conference to unveil its Insight, a new hybrid vehicle scheduled to go on sale in April, but said it has scaled back its original introduction plans.

Chrysler LLC said it only plans to host a news media party at a former Detroit firehouse across from Cobo Center on one night. In the past, festivities for journalists spanned several evenings.

Catering cuts

At this time last year, John Forte's catering company, Forte Belanger Catering in Troy, had booked about 10 events during the show, but so far this year, he has booked only one.

"I will say the bottom fell out," Forte said. "We have virtually nothing solid on the books for the auto show."

Forte said several potential events are on hold and may come through after Thanksgiving.

His situation is yet another sign that the 2009 auto show will be very different from any in recent memory.

Matt Prentice, CEO of Matt Prentice Restaurant Group, said the only event he has scheduled so far this year is for the charity preview night for Metro Detroit Area Ford Dealers.

"I would anticipate it's going to be a pretty quiet event from a food and beverage perspective," Prentice said of the auto show.

Renovation needed

But Serra argued that this is not the time to abandon plans to expand Cobo Center, the aging convention hall in Detroit where the show is held.

Legislation to create a regional authority that would oversee a $308-million plan to purchase, expand and renovate Cobo Center is pending in the state Legislature.

"Once we get through this and we get back to normal life, we will have as much need if not greater need," for a renovation and expansion of Cobo Center, Serra said.

Tuesday, November 25, 2008

Nardelli: Revival info to come

Chrysler to give details next month, he says in memo

September photo by PAUL SANCYA/Associated Press

Chrysler LLC Chairman and CEO Bob Nardelli told employees that the automaker will share more details next month on its reorganization.

BY TIM HIGGINS and KATIE MERX • FREE PRESS BUSINESS WRITERS

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.

Chrysler will push ahead on global plans - Automotive News

http://www.autonews.com/article/20070517/REG/70517022/1145/NAM

By 2012, Chrysler wants to shrink its number of vehicle platforms to seven, from 12 today. Increasing Chrysler's global footprint, with manufacturing in ...