The reasoning behind the claims is that Chrysler needs fewer sales to become profitable and repay its federal loans, which amount to around $4 billion at the moment. GM didn't respond directly to the claims made by Kolka, instead choosing to highlight the steps that company was taking towards achieving long-term viability.
Chrysler is expecting to make a profit within the next five years if the U.S. market can sustain around 11 million new car sales per year over that same time period. However, in the wake of the current economic crisis, many commentators are predicting that auto sales could dip as low as 10 million units this year, which would put Chrysler in a tough financial position if the situation didn't improve within the next few years.
Meanwhile, Chrysler's cash position is said to be healthy, with at least $2 billion in cash on hand for, although this figure could actually be as high as $6 billion. Despite this, the company is requesting more cash, although Kolka explained to Bloomberg that more aid is only needed to ensure that Chrysler will not have any need to come back for more in the near future.
Chrysler is also undertaking negotiations with Fiat to secure a $10 billion deal that would give Chrysler easy access to Fiat's extensive knowledge of small car production. In return Chrysler would offer up a 35% stake as well as its knowledge of SUVs.