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Motor Authority - blog Tag: Nardelli

  • Supreme Court allows sale of Chrysler to Fiat

    Supreme Court allows sale of Chrysler to Fiat June 9th, 2009 ByRalph Hanson Ralph Hanson, Author, June 9th, 2009 Ralph Hanson 1 Comment

    Supreme Court allows sale of Chrysler to Fiat The Supreme Court has approved the sale of substantially all of Chrysler's assets to Fiat, helping to finalize their alliance as well as the American automaker’s bankruptcy proceedings. Approval was given for the $2 billion sale of the assets to a new company that will be 68% controlled by a healthcare trust aligned with the United Auto Workers (UAW) union. Fiat will control 20%, while the U.S. and Canadian governments will control the remaining 12%.

    Objectors to the deal had included a group of Indiana pension funds holding secured debt, some of the 789 dealerships Chrysler plans to reject, and consumer groups. They had argued that... The Supreme Court has approved the sale of substantially all of Chrysler's assets to Fiat, helping to finalize their alliance as well as the American automaker’s bankruptcy proceedings. Approval was given for the $2 billion sale of the assets to a new company that will be 68% controlled by a healthcare trust aligned with the United Auto Workers (UAW) union. Fiat will control 20%, while the U.S. and Canadian governments will control the remaining 12%. Objectors to the deal had included a group of Indiana pension funds holding secured debt, some of the 789 dealerships Chrysler plans to reject, and consumer groups. They had argued that Chrysler was moving too quickly, that the sale violated bankruptcy principals and that the company was needlessly closing hundreds of its dealerships. The Supreme Court rejected their challenge, stating that the objectors "have not carried the burden" to justify such action and that the court's action was not a decision on the merits of the underlying legal issues alone. The only alternative to approving the sale would have been the immediate liquidation of the automaker, reports Automotive News. Chrysler, as well as the Obama administration, urged the Supreme Court to allow the sale to go forward and said a long delay could either kill the deal or worsen its chances of viability, potentially jeopardizing more than 38,000 jobs. In the lead up to its bankruptcy, Chrysler was forced to close all of its plants and leave thousands of vehicles, engines and components unfinished. This led to the fears that important model launches, like the redesigned Jeep Grand Cherokee and next-generation Chrysler 300, could be delayed. The sale of Chrysler’s assets to the newly established Chrysler Group is expected to take place by June 15, a date that couldn’t come sooner as it’s estimated that the delays are costing Chrysler upwards of $100 million a day. Read More

  • Judge allows sale of Chrysler assets to Fiat

    Judge allows sale of Chrysler assets to Fiat June 1st, 2009 ByJeremy Weber Jeremy Weber, Author, June 1st, 2009 Jeremy Weber 4 Comments

    Judge allows sale of Chrysler assets to Fiat A U.S. bankruptcy judge on Sunday approved the sale of substantially all of Chrysler's assets to Fiat, helping to finalize the two automaker’s alliance as well as the American company’s bankruptcy proceedings. Approval was given for the $2 billion sale of the assets to a new company that will be 68% controlled by a healthcare trust aligned with the United Auto Workers (UAW) union. Fiat will control 20%, while the U.S. and Canadian governments will control the remaining 12%.

    In his written opinion Judge Gonzalez said the only alternative to approving the sale was the "immediate liquidation" of the company and that he was... A U.S. bankruptcy judge on Sunday approved the sale of substantially all of Chrysler's assets to Fiat, helping to finalize the two automaker’s alliance as well as the American company’s bankruptcy proceedings. Approval was given for the $2 billion sale of the assets to a new company that will be 68% controlled by a healthcare trust aligned with the United Auto Workers (UAW) union. Fiat will control 20%, while the U.S. and Canadian governments will control the remaining 12%. In his written opinion Judge Gonzalez said the only alternative to approving the sale was the "immediate liquidation" of the company and that he was concerned about saving the value of Chrysler as a continuing operation, Reuters reports. Objectors to the deal had included a group of Indiana pension funds holding secured debt, some of the 789 dealerships Chrysler plans to reject, and consumer groups. They had argued that Chrysler was moving too quickly, that the sale violated bankruptcy principals and that the company was needlessly closing hundreds of its dealerships. In the lead up to Chrysler’s restructuring deadline, the carmaker was forced to shutdown a number of plants and leave thousands of vehicles, engines and components unfinished. This led to the fears that important model launches, like the redesigned Jeep Grand Cherokee and next-generation Chrysler 300, could be delayed. The sale of Chrysler’s assets to the newly established Chrysler Group is expected to take place almost immediately. Incidentally, the decision was made less than 24 hours before Detroit rival General Motors announced its own bankruptcy, the details of which you can read about by clicking here. Read More

  • Report: Chrysler to offer $1,000 certificates to all existing customers

    Report: Chrysler to offer $1,000 certificates to all existing customers May 15th, 2009 ByRalph Hanson Ralph Hanson, Author, May 15th, 2009 Ralph Hanson 2 Comments

    Report: Chrysler to offer $1,000 certificates to all existing customers As bankruptcy thrashes Chrysler vehicles' resale value the company is pulling out all the stops to keep sales up until it can emerge and join forces with Fiat. To help get feet on the floors of its remaining dealerships, the company is now reportedly getting ready to send out $1,000 certificates toward the purchase of a new car to all of its existing customers.

    The move is a bold one, since the certificate is ostensibly in addition to all the price cuts and incentives already on the table at Chrysler, Dodge and Jeep. Coming along with the $1,000 offer is a letter from CEO Bob Nardelli explaining the situation, reports the Wall Street... As bankruptcy thrashes Chrysler vehicles' resale value the company is pulling out all the stops to keep sales up until it can emerge and join forces with Fiat. To help get feet on the floors of its remaining dealerships, the company is now reportedly getting ready to send out $1,000 certificates toward the purchase of a new car to all of its existing customers. The move is a bold one, since the certificate is ostensibly in addition to all the price cuts and incentives already on the table at Chrysler, Dodge and Jeep. Coming along with the $1,000 offer is a letter from CEO Bob Nardelli explaining the situation, reports the Wall Street Journal. Though 789 of Chrysler's dealers will be shutting down in just a few weeks, they are still open for business in the interim, and the new incentive could help get rid of some of the inventory that will otherwise have to be purchased by Chrysler's remaining dealer network. In all, about 9 million current Chrysler owners will be getting the certificates, putting the total value of the incentives at $9 billion if all of them were to exercise the option. Read More

  • Chrysler CEO Bob Nardelli sheds light on resignation

    Chrysler CEO Bob Nardelli sheds light on resignation May 1st, 2009 ByJames Martinez James Martinez, Author, May 1st, 2009 James Martinez 1 Comment

    Chrysler CEO Bob Nardelli sheds light on resignation News of Chrysler CEO Bob Nardelli's departure has been making the rounds recently, but now the resigning chief has shed some light on the matter. Unlike his former counterpart at General Motors, Nardelli insists that he was not asked by the Obama administration to step down from the helm at Chrysler.

    In a pragmatic decision, Nardelli explained to Automotive News that it was now "an appropriate time to let others take the lead in the transformation of Chrysler with Fiat". Whether this was a subtle nod towards rumors that Fiat CEO Sergio Marchionne could be gunning for the top spot remains uncertain, but such an outcome would certainly not... News of Chrysler CEO Bob Nardelli's departure has been making the rounds recently, but now the resigning chief has shed some light on the matter. Unlike his former counterpart at General Motors, Nardelli insists that he was not asked by the Obama administration to step down from the helm at Chrysler. In a pragmatic decision, Nardelli explained to Automotive News that it was now "an appropriate time to let others take the lead in the transformation of Chrysler with Fiat". Whether this was a subtle nod towards rumors that Fiat CEO Sergio Marchionne could be gunning for the top spot remains uncertain, but such an outcome would certainly not surprise us considering the Italian exec’s proven track record of fixing up flailing companies. But Marchionne's appointment is not set in concrete, and there could be competition from remaining Chrysler executives, such as vice chairman Tom LaSorda. Furthermore, the final decision as to Chrysler's new leadership is expected to be decided by a new board of directors appointed jointly by the federal government and Fiat. The new board of directors is expected to consist of nine members in total, six chosen by the government and three chosen by Fiat. Read More

  • White House confirms bankruptcy plans for Chrysler, Nardelli to step down

    White House confirms bankruptcy plans for Chrysler, Nardelli to step down April 30th, 2009 ByRalph Hanson Ralph Hanson, Author, April 30th, 2009 Ralph Hanson 1 Comment

    White House confirms bankruptcy plans for Chrysler, Nardelli to step down The White House has announced Chrysler's entry into bankruptcy protection today, with talks between the Treasury Department and the carmaker failing to reach an agreement on the last day before the auto industry task force’s restructuring deadline. No further talks are planned but President Barack Obama has announced that a deal between Chrysler and Fiat will go forward.

    Obama's speech on Chrysler's bankruptcy included both praise for its past as a central part of the global auto industry and harsh criticism of its recent failures. Criticism was also aimed at those creditors unwilling to bargain with Chrysler, instead holding out on... The White House has announced Chrysler's entry into bankruptcy protection today, with talks between the Treasury Department and the carmaker failing to reach an agreement on the last day before the auto industry task force’s restructuring deadline. No further talks are planned but President Barack Obama has announced that a deal between Chrysler and Fiat will go forward. Obama's speech on Chrysler's bankruptcy included both praise for its past as a central part of the global auto industry and harsh criticism of its recent failures. Criticism was also aimed at those creditors unwilling to bargain with Chrysler, instead holding out on the chance that the government would step in and bailout the carmaker. Obama has chosen a 'surgical' bankruptcy to save Chrysler and to avoid rewarding those creditors for their behavior. "While the administration was willing to give creditors a final opportunity to do the right thing, the agreement of all other key stakeholders ensured that no hedge fund could have a veto over Chrysler's future success," an administration official explained to The Detroit News. Instead, the carmaker will enter bankruptcy courts where it will attempt to wipe away some of its debts and liabilities. The carmaker will file almost immediately for bankruptcy in New York under Section 363(b) of Chapter 11 of the bankruptcy code, which allows for a "quick rinse" or "surgical" bankruptcy. Any good assets would be auctioned - likely purchased by the U.S. Treasury - while the bad assets would be left behind in bankruptcy court to be liquidated. The entire process will take about 60 days. Bob Nardelli, Chrysler's CEO, has also announced that he will step down from his post once the company emerges from Chapter 11 proceedings. That fits well with the expectation that Fiat's chief Sergio Marchionne could take over the top spot at the Pentastar brand. “Now is an appropriate time to let others take the lead in the transformation of Chrysler with Fiat,” said Nardelli. “I will work closely with all of our stakeholders to see that this new company swiftly emerges with a successful closing of the alliance.” As for the restructured Chrysler, the U.S. government and Fiat are expected to announce a new board of directors once the alliance deal goes through, and most of them would be independent directors not currently affiliated with either Fiat or Chrysler. The new board would then select a CEO. Under the new set-up, the UAW will become the majority shareholder with a 55% stake, while Fiat will be reserved up to 35% and the government the remaining 10%. Read More

  • Chrysler creditors offer to swap debt for equity

    Chrysler creditors offer to swap debt for equity April 22nd, 2009 ByJames Martinez James Martinez, Author, April 22nd, 2009 James Martinez 2 Comments

    Chrysler creditors offer to swap debt for equity Chrysler's race to turn its debts into equity took a major turn for the better today, with an offer from a group of banks and hedge funds that hold almost $7 billion in debt. The group is proposing to exchange around $2.5 billion of Chrysler's debt, but only in exchange for close to 40% of the company.

    There is also a stipulation that Fiat must invest at least $1 billion in cash in Chrysler, as well as one seat given to the group on the company's board. The offer from the banks is a far cry from what the Treasury Department requested just last week, which was a debt reduction of around $6 billion.

    The race to beat the April 30th deadline,... Chrysler's race to turn its debts into equity took a major turn for the better today, with an offer from a group of banks and hedge funds that hold almost $7 billion in debt. The group is proposing to exchange around $2.5 billion of Chrysler's debt, but only in exchange for close to 40% of the company. There is also a stipulation that Fiat must invest at least $1 billion in cash in Chrysler, as well as one seat given to the group on the company's board. The offer from the banks is a far cry from what the Treasury Department requested just last week, which was a debt reduction of around $6 billion. The race to beat the April 30th deadline, which is now almost upon Chrysler, has seen the company attempting to swap its debt for equity, cutting costs massively and attempting to form an alliance with Fiat. Nevertheless, should any of these goals fail then government aid will end and Chrysler will be left to stand - or rather, fall - on its own. While the banks understandably don't want to forgive all of Chrysler's debt, some government officials such as Congressman Gary Peters, D-Mich., are viewing the banks' offer as that of one seeking a windfall. Speaking with the Associated Press, Peters claimed that the "debtholders were offered fair market value for their debt" but then "responded by asking for a windfall". He further criticized the banks, which include the likes of JPMorgan Chase, Citigroup, and Goldman Sachs for taking billions of dollars of taxpayer money through the Wall Street bailout but then remaining unwilling to "work with President Obama" to support the auto industry. Read More

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