Chrysler
Bankruptcy judge approves the sale of Chrysler to Fiat
On Sunday, Judge Arthur Gonzalez has officially approved the sale of American-based Chrysler to Italian-based Fiat. When the auto maker emerges from the bankruptcy, the newly formed Chrysler Group LLC would be co-owned by Fiat, the US Government and two other entities. The former would take up 20% (with the possibility of a short-term increase to 35% if certain financial and manufacturing goals are met) while the latter would be responsible for 8%.
Another 55% would be taken by the UAW’s health care fund and the balance of 2% would be taken up by the Canadian Government. This means now we can safely to see various vehicles that would be the result of platform sharing and so on. Please click here to learn more about Chrysler’s bankruptcy.
Former Duracell CEO to join Chrysler
Chrysler which recently filed for Chapter 11 has announced that former CEO of Duracell, Robert Kidder will join the auto maker, which is currently undergoing restructuring. Kidder, who was selected at the request of the US Government will not be the CEO, but will instead be some sort of an agent of stakeholder interests, to help make sure that the auto maker, which will be called Chrysler Group LLC is properly managed. Kidder is expected to join the company once its emerges from bankruptcy. On the other hand, Fiat’s Sergio Marchionne is rumored to take on the position as CEO of the company.
Chrysler files for bankruptcy, deal with Fiat confirmed!
Struggling American auto maker Chrysler has officially filed for Chapter 11 bankruptcy on Thursday as both the U.S and Canadian governments motivated the auto maker to make the decision. Bob Nardelli, CEO has also stepped down from his designation, and in fact the entire top management, made up by 9 executives will be completely replaced, with the appointments of four board members by the U.S government, three by Fiat, which has also struck an alliance with the company, one by the Canadian government and one more by the UAW, to help oversee the health care trust fund.
For now, Chrysler will continue its operations with capital injected by the U.S and Canadian governments, which can go up to US$ 7.5 billion in total, with the government up north forking out US$ 800 million. The ‘new’ Chrysler and the U.S government expect the company to emerge from the Chapter 11 bankruptcy within the next 60 days or so.
Regarding the newly forged partnership with Fiat, the Italian auto maker will do its end of the deal by supplying Chrysler with vehicle platforms, production technologies and management services, in return for a 35% stake in the company. Fiat may gradually increase the stake to 50% in the future.
President Obama to announce Chrysler’s bankruptcy option tomorrow?
News agency Bloomberg has reported that U.S President Barrack Obama will announce tomorrow that Chrysler will file for Chapter 11 bankruptcy, and that the struggling auto maker would still continue negotiating with Fiat. Unnamed sources also revealed that if that happens, the auto maker’s healthier assets will be sold to a new entity, and that 20% of the new company would be taken up by Fiat, 55% by the UAW and the balance by the U.S Government. Stay tuned for more news!
U.S Government rejects General Motor’s and Chrysler’s restructuring plans and gives a new deadline
The U.S Government, led by new front man, President Obama has turned down restructuring plans submitted by both General Motors and Chrysler. These restructuring plans were supposed to outline the viability of both auto makers, which will then allow both auto makers to receive further investments, but unfortunately for them, the government is not convinced just yet.
So on that note, the government has decided to give another 60 days to General Motors to prove its viability, and the government has also agreed to extend working capital (undisclosed amount) to last for 60 days. Chrysler on the hand gets 30 days and a working capital of up US$ 6 billion to finalize a deal with Fiat.
The government also revealed that Fiat is not allowed to take majority stake in the company until Chrysler repays all the money it has been extended to so far by the government. Chrysler will also not get further monetary aid from the government if it does not find a partner soon. So far, the depth of talks between Chrysler and Fiat has only led to an agreement on a “framework of a global alliance”, which is just a framework, and not a confirmed partnership. The U.S Government has also revealed that it will now back warranties on vehicles sold by General Motors and Chrysler to encourage sales, since potential buyers are afraid to throw money on a sinking ship.
General Motors and Chrysler to receive financing from private institutions?
General Motors and Chrysler may end up getting funds from private institutions for restructuring, if the U.S Government decides not to provide further financial aid to both companies. In order for the restructuring to take place, both makers have to file for Chapter 11. The restructuring will take place in order to turn both companies in viable organizations. Filing for Chapter 11 will also give temporary protection to both companies from creditors.
A number of external advisers to The Treasury are apparently trying to secure the funds from private institutions, which may include a number of them. The amount which is rumored to be about U.S $ 40 billion, and to be guaranteed by the U.S Government would also be used to pay back the U.S $ 17.4 billion that the government initially lent General Motors and Chrysler late last year.
Will these private institutions be able to extend the above mentioned amount during such uncertain times? Or will the U.S Government further increase printing of its dollar, which by the way has increased by about 60% since October last year. At least by directing the companies to receive funds from private institutions, the government does not need to tap into tax payer’s money.
GM and Chrysler may face bankruptcy – GM considers it as an option?
Reports have been circulating regarding GM’s and Chrysler’s possible bankruptcies as both companies are in the final preparation stage to present viability plans to the U. S Government in order to access more money from the bailout fund. It is almost confirmed that if both companies fail to persuade the government via these plans, bankruptcy is imminent for both auto makers.
Since bankruptcy carries a good 50% possibility, GM probably considers it as an “option”. If that is so, the auto maker may end up filling Chapter 11. According to The Wall Street Journal, by filling Chapter 11, GM’s domestic and overseas viable assets such as its subsidiary auto brands, will be re-organized into a whole new company, while other less viable assets may face liquidation.
Chrysler on the other has not considered bankruptcy as an option, and has revealed that it will “somehow” survive on its own if it does not get approval for more funds. Recently, Chrysler has been linked with the Fiat group regarding a possible merger.
In another development, the UAW (United Auto Worker) has left the negotiation table as GM is persuading the union to walk away with U.S $ 10 billion-worth of GM’s stock, and another U.S $ 10 billion-worth of green notes. Stick around as well will bring the you the latest updates.
Dodge Circuit EV – An electric American muscle?
Chrysler is doing its part for the environment by working on a few electric vehicle projects of its own. With its ENVI electric vehicle technology, Chrysler revealed that it can initiate production of at least one electric vehicle model by 2010, and that it can produce three more models by 2013.
So far, five vehicle platforms with the ENVI technology are under development including; the Jeep Patriot EV, the Jeep Wrangler Unlimited EV, Chrysler Town & Country EV, Chrysler 200C EV Concept and the Dodge Circuit EV, which is what you see above.
At first glance, you will associate it in terms of the exterior design with the gas guzzling Dodge Viper, however, it is actually based on the Lotus Europa (in fact, it looks just like it!). The exterior design screams one term definite term; “sports car!”, with its distinctive Dodge cross hair grille on the front fascia, low hood, functional deep scallops on each side and its slopping rear end. The only thing you find missing is the exhaust tip.
This pollution free, fully electric rear wheel drive sports car receives power from a 268HP electric motor with regenerative braking. The electric motor on the other hand receives energy from a lithium ion battery pack.
This “Tangoreen” coloured 2-seater vehicle can deliver driving range between 150 to 200 miles. It is able to accelerate to 100 km/h in slightly less than 5 seconds and has a top speed of slightly more than 193 km/h. The potential rival to the Tesla Roadster, Fisker Karma S, Lampo Protoscar and probably Lotus’ very own electric sports car can be charged up via a standard household power outlet.
The interior of the Dodge Circuit is pretty much basic, staying true to its sport car nature with leather sports seats and two primary analog gauges which can indicate information about the electric drive system. I project that in about 10 to 15 years time, almost all auto manufacturers will have their very own production electric vehicles.
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