Chrysler

Auto/Economy
4:01 pm
Sun October 2, 2011

Big boost in September auto sales expected

Analysts expect the auto industry to post very good sales numbers on Monday.  

IHS Global Insight automotive analyst Rebecca Lindland says September was a very good month at car dealerships.   She says the number of car buyers increased last month.  At the same time, Honda and Toyota were finally able to get more vehicles to showrooms, as the disruptive effects of last March’s earthquake and tsunami began to fade.

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Auto/Economy
10:24 am
Wed September 21, 2011

Moody's downgrades Fiat's credit rating

Fiat's credit was downgraded by Moody's.
Fiat USA

MILAN (AP) - The ratings agency Moody's has downgraded the credit rating Fiat SpA citing financial risks tied to the integration with Chrysler Group LLC.

Moody's on Wednesday downgraded the Italian automaker to Ba2 from Ba1.

The ratings agency said it expects integration of the two automakers will mean they will have "to support each other in the event of financial difficulty."

Fiat took an initial 20 percent stake in Chrysler in exchange for engine technology and management prowess. It currently holds a 53.5 percent share.

Moody's said it made the downgrade even though Fiat does not guarantee Chrysler's debt, and that the two companies' finances remain separate.

Auto/Economy
10:57 am
Tue September 20, 2011

Auto Talks: Far From Over

There’s a great deal of celebration going on over the fact that General Motors and the United Auto Workers union have reached tentative agreement on a new, four-year contract.

In the old days, what this would have meant was speedy ratification, followed by a similar settlement with Chrysler within perhaps two weeks, and then Ford maybe a month later.

That was the era of pretty much one-size-fits all pattern bargaining agreements. But that was before the near-death and the resurrection of Chrysler and GM, and it’s now a different world.

I spent some time yesterday with one of the best industry analysts around -- Kristin Dziczek, who heads the labor and industry group at CAR, the non-profit Center for Automotive Research based in Ann Arbor. Dziczek knows the management spokesmen and the economists, and has friends and relatives who are in the UAW. She eats, breathes, and sleeps this stuff.

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Auto
4:02 pm
Mon August 1, 2011

Chrysler and Fiat cultures are merging well

A top Chrysler executive says Fiat and Chrysler have made good progress at merging their two cultures. 

The Italian car company was put in charge of the Detroit car company two years ago. 

This is Chrysler’s third attempt after failed mergers with German car company Daimler and an investment group, Cerberus Capital. 

Chrysler’s head of World Class Manufacturing Massimo Risi says it helps the companies have a lot in common, especially the ability to survive.

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Auto/Economy
3:11 pm
Mon July 25, 2011

UAW begins new contract negotiations with automakers

From left - UAW President Bob King, UAW Vice President Chrysler Department General Holiefield, Chrysler Senior Vice President of Manufacturing Scott Garberding and Chrysler Vice President of Employee Relations Al Iacobelli.
UAW

The United Auto Workers formally kicked off negotiations today with Detroit automakers.

Current UAW contracts with Chrysler, GM, and Ford expire in mid-September.

Michigan Radio's Sarah Cwiek reports that Chrysler Group LLC management and the UAW emphasized unity at the press event today:

Scott Garberding is a Senior Vice President for Chrysler. He says the company and the UAW worked together to get Chrysler through bankruptcy. Garberding says it’s important for the new contract to recognize the sacrifices Chrysler workers have made.

"And at the same time, establishing a legacy for our organization to ensure that we remain competitive long-term. And I can’t think of a better team that could collectively come together and craft that type of arrangement. "

Last week, UAW President Bob King said he wanted workers to see the benefits of increased profit sharing. The UAW is also expected to seek wage increases for entry-level workers, and job guarantees. After huge layoffs, King said remaining workers want to count on their jobs:

“They want stability,” he said. “They want to know they’ll be working next week and next year, and that they will be able to send their kids to college.”

Talks are expected to take at least a month, and if things don't go well in negotiations with Chrysler and GM, the UAW is compelled to enter into binding arbitration. The UAW cannot strike under the terms of the government bailouts:

This year, for the first time, the UAW is bound by an agreement that it reached with Chrysler and General Motors in 2009 that requires the two sides to enter into binding arbitration if they reach an impasse.

King said Chrysler and the UAW have formed a committee to set up the ground rules for arbitration, even though he said that is a last resort.

“If arbitration happens … then I would say we haven’t done our job,” King said.

The UAW can, however, strike against Ford Motor Company. Analysts are curious to see if UAW negotiators are able to secure better terms with Ford.

Auto/Economy
3:20 pm
Thu July 21, 2011

U.S. government ends Chrysler investment; Fiat takes over

The U.S. government is no longer invested in Chrysler.
Ricardo Giaviti Flickr

WASHINGTON (AP) - The Treasury Department says it has ended its investment in Chrysler LLC after Italian automaker Fiat SpA purchased the U.S. government's remaining holdings in the auto company.

Fiat paid $560 million to the Treasury Department for the government's 98,000 shares. Fiat has run the company since it emerged from bankruptcy protection in June 2009.

Treasury provided a total of $12.5 billion to Chrysler and its financing arm after the recession hampered auto sales and sent Chrysler and General Motors to the brink of collapse. The funds came from the government's $700 billion bank bailout fund.

Since then, $11.2 billion of the assistance has been repaid, Treasury says. Chrysler repaid $5.1 billion in loans from the government in May. Treasury said it likely won't recover the remaining $1.3 billion.

Auto/Economy
1:00 pm
Thu June 16, 2011

Chrysler to reopen part of plant in Trenton, Michigan

Increased demand for Chrysler's Pentastar V6 engine helped to reopen part of the Trenton North engine plant.
Greg Mason Flickr

Chrysler says it will invest $114 million in the Trenton North engine plant and save about 268 jobs.

From Reuters:

Chrysler will repurpose about one-fifth, or 400,000-square feet, of the Trenton North engine plant to make parts for the Pentastar engine made at the Trenton South plant.

The plant was closed last month, but the need for these parts has increased as Chrysler replaces seven V-6 engines with the new Pentastar V-6 engine, Brian Harlow, head of powertrain manufacturing said in a statement.

"This investment has also given Trenton North, which has been building engines for nearly 60 years, a new lease on life," Harlow said.

The city of Trenton gave Chrysler some tax breaks in exchange for investing in and reopening part of the Trenton North engine plant.

Crain's Detroit Business reports the tax break as a "50 percent tax abatement for Chrysler for 12 years."

Trenton Mayor, Gerald Brown, said he's happy Chrysler has given the plant a new lease on life. From the Detroit News:

Trenton Mayor Gerald Brown said the city is thrilled Chrysler is reopening the plant...

On Monday, the Trenton City Council approved a tax break for the $114 million project.

"My administration worked very hard to come to an agreement that will provide the city with long-term stability at the site, additional jobs and tax base improvements while further enhancing the relationship that Trenton and Chrysler have enjoyed since the 1950s. Trenton truly is Chrysler Town and we are proud of it," Brown said.

Auto/Economy
4:03 pm
Tue June 14, 2011

Marchionne reluctant to buy autoworkers' stake

Rosh Sillars Flickr

The CEO of Fiat and Chrysler, Sergio Marchionne, says he is not in talks to buy the Chrysler stake held by a trust for retired autoworkers.

Marchionne told reporters on the sidelines of a new Fiat car launch Tuesday that the "easiest route" for the trust to convert its stake into cash is when Chrysler goes public. He said that the IPO would not be this year because "the market is not there."

Fiat raised its stake in Chrysler to 52 percent with a deal earlier this month to buy the U.S. Treasury's 6 percent interest in Chrysler for $500 million. Fiat hopes to raise its stake to 57 percent by the end of the year. Marchionne says he is in talks to buy the Canadian government's remaining stake.

Auto/Economy
3:57 pm
Thu June 9, 2011

Political Roundup: Auto industry bailout & Mitt Romney (audio)

Chrysler repaid $7.6 billion to the U. S. and Canadian governments back in May.

Recently, General Motors announced the addition of 2,500 jobs to its Hamtramck plant and plans to invest $130 million in a new data center in Warren, Michigan.

Michigan Radio's Jenn White helps us get a look at the political implications of the automotive industry’s progress.  She spoke with Susan Demas, political analyst for Michigan Information and Research Service and Ken Sikkema, former Republican state Senate Majority Leader and senior policy fellow at Public Sector Consultants.

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Auto/Economy
2:17 pm
Fri June 3, 2011

Pres. Obama marks the end of government ownership of Chrysler

Pres. Barack Obama addresses auto workers at a Chrysler assembly plant in Toledo, Ohio
(photo by Bridget Bodnar/Michigan Radio)

President Obama congratulated a crowd of Chrysler auto workers today in Toledo for their hard work as he stood surrounded by an assembly line of Jeeps. He stressed the importance of the 2008 bailout of Chrysler and G-M to the rest of the auto industry, including Ford:

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Auto/Economy
1:03 pm
Tue May 31, 2011

Fiat plans to buy Canada's stake in Chrysler

Working to free itself from government ties.
Ricardo Giaviti Flickr

The majority owner of Chrysler, Fiat, is anxious to rid the company of any government ties.

Last week, the company refinanced it's TARP loans from the U.S. government.

Then they announced plans to buy the U.S. government's remaining 6% stake.

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U.S. Treasury to sell Chrysler stock
4:49 pm
Fri May 27, 2011

Chrysler to be free of government ownership before General Motors

Fiat says it will buy the U.S. Treasury’s 6% stake in Chrysler.   

The announcement means Chrysler will be free of government influence long before General Motors will be. 

Fiat and the U.S. Treasury will negotiate the price over the next ten business days.   Fiat will own 52% of Chrysler once the deal goes through.     

Sheldon Stone is a restructuring expert with Amherst Partners.  He says the negotiations should go smoothly, since the federal government is highly motivated to get out of the car business.

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Presidential Visit
6:49 am
Thu May 26, 2011

Obama to visit Chrysler plant in Toledo next week

President Obama will visit a Chrysler plant in Toledo, Ohio next Friday, June 3rd.
The U.S. Army Flickr

President Barack Obama will visit a Chrysler plant in Toledo, Ohio, next week to discuss the car maker's repayment of a federal loan that saved the company from financial disaster two years ago.

The White House says Obama will visit the auto plant on June 3.

Chrysler announced Tuesday the repayment of $5.9 billion in U.S. loans and $1.7 billion in loans from the governments of Canada and Ontario. It covers most of the federal bailout money that saved the company after it nearly ran out of cash in 2009 and went through a government-led bankruptcy.

The company recently posted its first profit in five years and has bolstered its lineup of Jeeps and cars.

Auto/Economy
4:02 pm
Wed May 25, 2011

Congressman Peters invites McCain to see auto recovery himself

In 2009 McCain did not support the auto bailout.
User: Wigwam Jones Flickr

Now that Chrysler paid off its debt six years ahead of schedule, Michigan congressman Gary Peters is inviting Senator John McCain to see the automotive industry recovery for himself. In 2009 McCain said he’d like to meet anyone who believed Chrysler would survive.

Peters says he wants McCain to see the progress Chrysler has made in two years.

Auto/Economy
3:12 pm
Tue May 24, 2011

Chrysler celebrates after paying back government loans

Chrysler CEO Marchionne said "we owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as a strong and viable carmaker."
user socialisbetter Flickr

Chrysler got itself out from under the higher interest loans from the U.S. and Canadian governments today - sooner than it had planned to.

Company officials are celebrating today at Chrysler's Sterling Heights assembly plant.

From the Detroit News:

The automaker has repaid $5.1 billion in loans, as well as $1.8 billion in interest and other fees, releasing Chrysler from all monetary commitments to the governments less than two years after the bailouts kept them in business. Chrysler went to the capital market for lower-interest financing to get out from under the government loans that carried interest rates as high as 20 percent. The refinancing — which is much like refinancing a home mortgage — will save more than $300 million annually.

In a statement, Treasury Secretary Timothy Geithner said: 

Chrysler’s early repayment of its outstanding TARP loans is an important step in the turnaround of this company and the resurgence of the auto industry. Because President Obama made the tough decision to stand behind and restructure the auto industry, America’s automakers are growing stronger, making new investments, and creating new jobs today throughout our nation’s industrial heartland."

The U.S. Treasury gave a total of $12.5 billion to Chrysler under TARP’s Automotive Industry Financing Program. After today's payment, Treasury officials say "Chrysler has returned more than $10.6 billion of that amount to taxpayers through principal repayments, interest, and canceled commitments." The U.S. Treasury continues to hold a 6.6 percent stake in Chrysler. Those shares could be sold when Chrysler's stock goes public or if the Treasury decides to sell its shares to another investor. In their statement today, Treasury officials said the government is "unlikely to fully recover its remaining outstanding investment of $1.9 billion in Chrysler."

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Economy
7:04 am
Tue May 24, 2011

Chrysler set to pay back federal loans today

Chrysler is set to pay back its federal loans in full today.
Ricardo Giaviti Flickr

Chrysler will pay back its federal loans in full today. Michigan Radio's Tracy Samilton reports:

It's another milestone in the company's long struggle to recover from bankruptcy. Chrysler will wire-transfer nearly $6 billion to the U.S. Treasury and $1.5 billion to the governments of Canada and Ontario. Chrysler used some cash from Fiat for the transaction - and refinanced the rest with loans from private banks and investors.

The move will save Chrysler $300 million a year in interest and is one more step towards independence from the government.

The U.S. Treasury still holds about eight and a half percent of Chrysler stock. Fiat could end up buying that stock in the future. As of today, Fiat owns forty-six percent of Chrysler.

The news is making headlines this morning:

Auto/Economy
11:18 pm
Sun May 22, 2011

Suppliers like working with Toyota best but Ford becoming more popular

Ford, GM and Chrysler are getting along with their suppliers better than they used to.  

But an annual study says the companies have a ways to go to catch up with their Japanese counterparts. 

John Henke is President of Planning Perspectives, which studies the working relationship between parts suppliers and their customers, the car companies. 

He says that relationship has long been adversarial for the Detroit Three, which means suppliers often don’t give them the best prices for parts, or the first crack at new technologies.

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Auto/Economy
10:01 am
Thu May 19, 2011

Report: Chrysler to repay loans

$3 million in interest per day.

That's how much Chrysler paid in interest on its government loans last year according to the Associated Press.

Those high interest rates, and the stigma of being financed by the government, are driving Chrysler to pay off the government loans.

Sources told the Associated Press a deal could be reached next Tuesday:

Chrysler is close to repaying its government bailouts.

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Auto/Economy
11:33 am
Fri May 13, 2011

Chrysler moves up summer plant shutdowns to June

Chrysler headquarters in Auburn Hills, Michigan.
user fiatontheweb creative commons

DETROIT (AP) - Chrysler is moving its normal summer shutdowns at three factories into June from the usual July closings because of parts shortages from the earthquake in Japan.

The company says its pickup truck plant in Warren, Mich., and its Toledo, Ohio, North assembly plant will be idled the weeks of June 20 and 27. Both plants had been scheduled to close the weeks
of July 11 and 18.

In addition, a Toledo parts operation will close the week of June 20 instead of July 11.

The company says its other plants will have their normal summer shutdowns in July and August.

Nearly all automakers have lost production due to parts shortages from the March 11 earthquake and tsunami that hit northern Japan. The quake damaged parts supply plants or knocked out electricity.

Auto/Economy
10:52 pm
Tue May 3, 2011

Chrysler surviving

A new kind of customer began showing up at Schultz Motors of Milan after Chrysler ran a defiant, two-minute ad during the Superbowl -- young guys who’d never owned a Chrysler before.  But they wanted the car rap star Eminen was driving in that ad. 

Tyler Schultz says it helps that the 200 is a more appealing car than its predecessor the Sebring.

"The interior is very well-appointed, it's very driver-friendly, and you can see the list price is $24,000.  So with the incentives on top of that it comes in really affordable.  So this car’s got a lot of bang for the buck."

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