Nardelli’s replacement will likely be picked by a new board of directors appointed by the federal government and FiatEnlarge Photo
Building a foundation for the reconstruction of the industry, General Motors and Chrysler are required to submit new plans for viability today as part of the loan agreement established late last year. GM has yet to unveil their reworked plan, but Chrysler has just released the key details of its new strategy.
The original viability plan, detailed by Chrysler last December
, called for $7 billion in emergency loans. The plan sent to Congress today adds another $2 billion on top of that requirement, bringing the total to $9 billion in taxpayer money.
Chrysler says the extra funds are needed due to the continued worsening of the U.S. 'SAAR' or seasonally adjusted annual rate - the total amount of cars expected to be sold in 2009. To back up that loan request, Chrysler says it will be able to begin repayment of the loans in 2012.
Getting to a position viable enough to support repayment of those loans will be the hard part. Chrysler has 24 new model launches planned over the next 48 months, however, to help build sales. The company has even promised an 'electric-drive vehicle' by 2010, though whether that means a plug-in hybrid like the Volt or a true EV is unknown.
Chrysler also promised to reduce its fixed costs by an additional $700 million this year, eliminate 100,000 units of production capacity, cut more than 3,000 jobs, sell $300 million in additional assets, discontinue at least three model lines, and submit a final plan for deliberation by the Obama administration by the end of March.
Despite these massive challenges facing it and the company's currently weak position, CEO Bob Nardelli remains optimistic, especially with Fiat in the picture.
“We believe that Chrysler LLC will be viable based on the updated assumptions contained in this submission, and that an orderly restructuring outside of bankruptcy, together with the completion of our standalone viability plan, enhanced by a strategic alliance with Fiat, is the best option for Chrysler employees, our unions, dealers, suppliers and customers," Nardelli said in a statement.