Chrysler

News Roundup
9:45 am
Mon May 2, 2011

In this morning's news...

Osama bin Laden is dead, Detroit reacts

The Detroit Arab American and Muslim communities reacted last night as news of Osama bin Laden's death spread. The Council on American-Islamic Relations (CAIR) and the Council of Islamic Organizations of Michigan are holding a press conference this morning at 9:30. Michigan Radio's Steve Carmody is there and will have an update for us. Here's a statement from CAIR:

In a statement issued following President Obama's announcement of bin Laden's death, CAIR-MI Executive Director Dawud Walid said, "We welcome the announcement that Osama bin Laden has been eliminated as a threat to our nation and the world through the actions of our military personnel. In addition to the killing of thousands of Americans, he and Al Qaeda caused the deaths of countless Muslims worldwide. We also welcome President Obama's clear statement tonight that the United States is not at war with Islam."

Chrysler records its first profit since emerging from bankruptcy

The good economic news continues for U.S. automakers as Chrysler announced a first quarter profit. From the Detroit Free Press:

Chrysler said today it earned $116 million during the first three months of the year, giving the company its first profit since emerging from bankruptcy in 2009, as well as details about its debt refinancing plans.

The profit compares to a $197-million loss for the same January-March period last year.

Collusion between bridge-owner Moroun and former Detroit Mayor?

A WikiLeak cable reveals the Detroit & Canada Tunnel Corporation felt shut out of negotiations between former Detroit Mayor Kwame Kilpatrick and Ambassador Bridge owner Matty Moroun. From the Windsor Star:

The former president of the company that manages the Windsor-Detroit tunnel complained to the U.S. embassy in Ottawa in 2005 about backroom dealings between Ambassador Bridge owner Matty Moroun and Detroit Mayor Kwame Kilpatrick, correspondence released by WikiLeaks this week shows.

In a cable he sent to the State Department on Nov. 10, 2005, David Wilkins, former U.S. ambassador to Canada, said Gordon Jarvis complained he had been "shut out of negotiations" as he tried to get the Detroit & Canada Tunnel Corporation's lease arrangement renewed. Moroun had offered to pay $30 million to gain control of the U.S. side of the Windsor-Detroit tunnel for 100 years and the tunnel corporation was trying to make a counter offer.

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Auto/Economy
9:23 am
Thu April 28, 2011

Chrysler intends to repay government loans by end of June

Chrysler's headquarters in Aurburn Hill, Michigan. The company says it plans to pay back government loans by the end of June.
user fiatontheweb Flickr

Just ahead of a visit from U.S. Treasury Secretary Timothy Geithner, Chrysler says it intends to pay back the government loans it received by the end of June. Geithner was one of the main architects of the government bailouts for Chrysler and GM.

From the Detroit News:

Chrysler Group LLC today confirmed its intention to repay its $7.4 billion in loans to the U.S. and Canadian governments by the end of June, as long as market and other conditions remain conducive.

In a statement prior to CEO Sergio Marchionne hosting a visit from U.S. Treasury Secretary Timothy Geithner later today, Chrysler said it plans to repay its government loans with a new term loan facility and newly issued debt securities that will be sold to institutional investors in a private offering.

The Detroit Free Press reports Chrysler wants to pay back the debts because the interest rates on the government loans are high:
 

Marchionne has said he wants to refinance Chrysler’s debt because the interest rate is higher than commercial market rates. The effective interest on the borrowings from the U.S. is as high as 14% and as much as 20% on the Canadian debt.

In order to find investors, the Detroit News reports that senior executives will head out on a "road show" to court financial institutions. They report the automaker is currently working with Morgan Stanley, Goldman Sachs, Citigroup Inc. and Bank of America Corp.

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Auto/Economy
9:33 am
Thu April 21, 2011

Fiat moving closer to a majority stake in Chrysler

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

Updated: 

News that Fiat will soon acquire a bigger stake in Chrysler is another sign the merger is working.

Jim Hall is president of  the auto consulting firm 2953 Analytics.  He says the merger benefits both companies.  Fiat gets access to the U.S. market and to Chrysler’s more profitable vehicles, and Chrysler gets access to Fiat's global markets and its fuel-saving technology. 

And the merger could save the companies money on parts.

Read more
Auto/Economy
11:17 am
Tue April 12, 2011

Fiat meets another benchmark - increases stake in Chrysler to 30%

You can buy the Fiat 500 in the U.S. More access to the U.S. market was one reason Fiat took over Chrysler.
Fiat USA

During the U.S. government led bailout in 2009, Fiat took over management control of Chrysler and was given a 20% stake in the company.

The government said Fiat's stake in Chrysler could increase to as much as 35% so long as they met three milestones.

Now, the Italian company now controls 30% of Chrysler after meeting the second milestone set forth by the U.S. government.

From the Detroit News:

Fiat SpA announced today it has increased its share in partner Chrysler Group LLC to 30 percent effective immediately.

The additional 5 percent stake is triggered automatically with Fiat's completion of the second of three performance-related conditions.

The first, achieved in January, was awarded for Chrysler's assembly in Dundee of a fuel-efficient Fiat engine.

The second condition was that the Italian automaker help Chrysler generate cumulative revenue of $1.5 billion outside North America and use Fiat's dealer network in Latin America to distribute Chrysler vehicles.

The third milestone, according to the Globe and Mail, is the development of a 40 mpg Dodge car built on a Fiat platform.

Once that milestone is reached, Fiat could solidify its ownership of Chrysler. From the Globe and Mail:

Dodge is developing a compact car on a Fiat platform that will reach 40 miles per gallon, which would satisfy the third test set by Treasury in 2009.

Mr. Marchionne told analysts on a conference call in October that he expected Fiat would meet all of the Treasury’s hurdles by the end of 2011.

The indications of progress are significant because the sooner Fiat can raise its Chrysler stake to 35 per cent, the quicker it could exercise an option to take majority ownership of the U.S. automaker.

The Detroit News reports that the current ownership of Chrysler breaks down this way:

  1. 59.2% - United Auto Workers retiree health care trust
  2. 30% - Fiat
  3. 8.6% - U.S. government
  4. 2.2% - Canada and Ontario governments combined
Auto/Economy
6:44 pm
Mon April 11, 2011

Fiat to acquire another stake in Chrysler this week

Fiat could increase its ownership stake in Chrysler this week. 

Eventually, Fiat hopes to own a majority of the Detroit automaker. 

In 2009, the federal government agreed to give Fiat 20% of Chrysler in return for taking over management of the Detroit automaker.  The deal also set up incremental steps by which Fiat could reach 51%.    

Fiat CEO Sergio Marchionne says he expects Fiat’s stake to grow to 30% this week, after meeting a requirement to increase sales of Chrysler vehicles outside North America.  

Auto/Economy
2:21 pm
Mon April 11, 2011

Fiat looks to increasing stake in Chrysler

Fiat CEO Sergio Marchionne talks to reporters at January's North American Intl Auto Show in Detroit
(photo by Steve Carmody/Michigan Radio)

Fiat CEO Sergio Marchionne says the Italian auto maker will increase its stake in Chrysler in the coming days.  Fiat currently controls about 25% of the Detroit auto company.  The Wall Street Journal reports Marchionne plans to add another 5%. 

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Auto/Economy
8:56 am
Wed March 30, 2011

Fiat/Chrysler CEO predicts "$100 billion" revenues by 2014

Fiat/Chrysler CEO Sergio Marchionne speaking at the North American International Auto Show in Detroit in January 2011
(photo by Steve Carmody/Michigan Radio)

Fiat/Chrysler CEO Sergio Marchionne talked about an improving revenue picture ahead of a Fiat stockholders meeting today in Turin, Italy. He also says Fiat may soon increase its stake in Chrysler from 25% to 35% this year.   Fiat took over management of Chrysler 21 months ago, as the Detroit automaker emerged from bankruptcy protection.

Agenzia Giornalistica Italia reports that Marchionne told investors  that he is confident Fiat's 2011 goals will be met:

He explained, moreover, that in 2011, profits will amount to 37 billion(with the possibility of reaching more than 100 billion after 2014, due to the Chrysler integration effect), whereas the management outcome will range from 0.9 and 1.2 billion. Dividends policy will be confirmed (25% of net profits will go into dividends).

The Wall Street Journal quotes Marchionne as saying Fiat will increase this year its share of the European auto marker, where it saw a decline in 2010. 

"We expect a general improvement in trading conditions, with the exception of the passenger-car market in Europe, which will be negatively influenced by declines forecast for Italy and France...Nevertheless, we project that our market share will increase as a result of new model releases programmed for the second half".

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Offbeat
4:40 pm
Wed March 9, 2011

The scarlet tweet

Rosh Sillars Flickr

This morning, Chrysler's twitter feed featured something that grabbed people's attention, and not in a good way.

The tweet featured an expletive. A bad one. From the Detroit Free Press:

"The official Twitter account of Chrysler brand vehicles dropped the F-bomb this morning in an off-color update from an employee at the automaker’s social media agency."

"The post read: 'I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to (expletive) drive.'"

"While the tweet has since been deleted, the original post was retweeted by several people on the popular social network, including Twitter user @tverma29, making it impossible to erase from the Web."

CNET suggested that it might have been Eminem causing the mischief, but it turns out that the offending tweeter worked for Chrysler's social media agency of record. From WXYZ:

"The company says that an investigation determined that an employee of their 'social media agency of record, New Media Strategies' posted the tweet Wednesday morning. That employee, who was not identified, has been terminated.

Which is a shame, because it really seemed like Eminem.

-Brian Short, Michigan Radio News

Arts/Culture
4:48 pm
Tue March 8, 2011

Detroit City Council honors Chrysler ad

Chrysler’s now-famous “Imported from Detroit” Super Bowl ad is getting recognition from city leaders.

The Detroit City Council honored the Chrysler Group with a testimonial resolution Tuesday.

Councilman Andre Spivey, who sponsored the resolution, says the “phenomenal” ad was about much more than a car.

“I don’t think Chrysler intended it to be what it turned out to be. But I think it inspired many people in Detroit to say hey, this is our city. We have a good city. We have our challenges, yes…but I think we can come back. And I think it gave us a little spark of energy to go on and see what else we can do.”

Chrysler Group President Olivier Francois accepted the award on the company’s behalf.

Francois says Chrysler meant the ad as a tribute to Detroit, but didn’t think it would have so much resonance.

“For sure, the Super Bowl commercial has been promoting a lot beyond the car itself and beyond the company. It did I think a great job for the city."

The commercial’s “Imported from Detroit” catchphrase has become so popular Chrysler is putting it on t-shirts and other merchandise.

Francois says some proceeds from those sales will go to four still-to-be-named Detroit charities.

Auto
5:32 pm
Mon March 7, 2011

Chrysler recalls 250,000 of its popular minivans

Chrysler is recalling a quarter million crossovers and minivans for ignition switch problems that can cause stalling. 

The recall involves 2010 model year Dodge Journey crossovers and Grand Caravan minivans and Chrysler Town and Country minivans. 

The company says in some of the vehicles, ignition switches can slip out of the “run” position while the vehicle is being driven. That could shut off the engine. 

At least two rear-end collisions have been reported due to the defect.   

The Grand Caravan and Town and Country minivans are top-sellers for the company. 

The automaker is struggling to increase sales while many of its Chrysler, Dodge and Jeep brand vehicles remain at the bottom of many quality and reliability surveys.

Auto
1:13 pm
Tue February 15, 2011

Chrysler selling "Imported from Detroit" t-shirts

A sample image of the t-shirt from Chrysler's website
collection.chrysler.com

For $29.95 you can continue the buzz that started with the "Imported from Detroit" Super Bowl ad.

Chrysler is selling t-shirts with the "Imported from Detroit" logo on its Chrysler Collection website ('imported' from the USA, according to the website).

The Detroit Free Press asked a Chrysler spokesperson if the design will be on other items:

Chrysler spokeswoman Dianna Gutierrez said, “It’s too early to discuss. I don’t have any formal details to share at this time.”

The epic two-minute ad is still running on television in edited down one-minute and 30 second versions.

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Arts/Culture
8:26 pm
Mon February 7, 2011

Imported from Detroit? You bet.

I didn’t really watch the Super Bowl last night. I only flipped it on toward the very end to see what had happened. I also logged onto my Facebook page about the same time, and was floored to see my newsfeed exploding with updates, nearly all variations on one theme: “Imported from Detroit.”

I was curious to know what this was all about, and fortunately some helpful people had already posted links to the Chrysler 200 ad featuring Eminem. It begins with the familiar stark images of Detroit—the bleak industrial landscape, the vacant and decaying buildings. Then a growling, defiant voice: “I’ve gotta question for you. What does this city know about luxury?”

“What does a town that’s been to hell and back know about the finer things in life?”

The response is an unfolding visual narrative that was a surprisingly moving tribute to Detroit’s aesthetic and cultural beauty. Underlying it all is a frank admission that the city has been to hell, and it may still be somewhere near hell-ish. But like Diego Rivera’s gorgeous murals that depict Detroit in its industrial heyday, the ad also finds beauty in Detroit’s hardscrabble nature. It issues a defiant challenge to recognize that beauty, but offers no apologies to those who won’t.

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Auto/Economy
2:09 pm
Mon February 7, 2011

Impressions of the Chrysler Super Bowl ad

The "Imported from Detroit" commercial stirred a lot of pride around these parts, and on Michigan Radio's Facebook page.

We posted it last night and the "likes" and comments about pride started flowing:

  • "Gave me chills and made me proud to be a born in Detroiter."
  • "This is the kind of thing we need for our area. This commercial gave me goose bumps."
  • "Great commercial! I'm proud to be from Michigan!"
  • "Chills...I almost started crying! But, I have had almost 14 beers."

Just up I-96, the profs at MSU's Department of Advertising, Public Relations, and Retailing, who release an annual ranking of Super Bowl commercials, put the Chrysler ad in third place – tied with the ads from Audi, PepsiMax, Hyundai, and Bud-Light.

First and second place went to German car-maker Volkswagen (first went to the Darth Vader ad, and second went to the VW Beetle ad).

When I asked them, "why third?"  MSU instructor and the organizer behind the MSU rankings, Bob Kolt, said the margin between 1st and 3rd was quite small, "If a few professors had changed their ranking of the commercial slightly, it could have easily been put in the top spot."

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Auto/Economy
6:04 pm
Mon January 31, 2011

Chrysler loses money in 2010 but gives performance bonuses anyway

Chrysler lost $650 million in 2010, primarily as a result of high interest payments on its government loans.

It's a far different result from the other automaker that received federal bailout loans, General Motors, which posted a healthy profit in 2010.  And GM paid back a significant portion of its loans from cash reserves and proceeds from its Initial Public Stock Offering.

But Chrysler is a much smaller company than GM, and its sales were still weak last year.  That means less revenue to lower the debt burden.   

Chrysler's CEO Sergio Marchionne says, "We’ve got more than a billion in interest costs a year, which are effectively chewing up the operating profits that we’ve got."

Marchionne  says he hopes to secure private loans to pay off the federal loans by the end of this year.

On the plus side, Chrysler has entered the new year with 16 new or significantly remodeled vehicles, just as U.S. auto sales are improving.

Despite not being able to turn a profit, Marchionne says the company met or exceeded all of its targets last year.  He says everyone pitched in to help Chrysler refresh its vehicle lineup in record time, and implement a new cost-saving manufacturing system. 

"I think it would been absolutely inexcusable on our part not to recognize what our people have done," he said during an earnings conference call with analysts and media.

The publication Automotive News reports Chrysler UAW workers will get payments of $750 each.

GM workers are expected to get actual profit-sharing checks.  GM releases its fourth quarter and full 2010 year results later in February.

Ford workers will get an average $5,000 each after the company posted its best profit in 11 years.

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Auto/Economy
5:18 pm
Wed January 19, 2011

Chrysler to build experimental hybrid minivans

There’s more than one kind of hybrid vehicle. But most people only know about electric hybrids that use batteries.

The U.S. Department of Energy has poured several billion dollars into helping companies develop advanced lithium-ion batteries.  But to hear Chrysler CEO Sergio Marchionne describe the effort, that's tantamount to picking a technology winner, before the race is finished.

The big problem with advanced batteries, says Marchionne, is they're really expensive. A big battery can increase the cost of a vehicle by a third.  

"And I don’t think we should prejudice the discussion by saying electrics are the answer," Marchionne said at a press event held at the U.S. Environmental Protection Agency's National Vehicle and Fuel Emissions Laboratory in Ann Arbor.  "They may be part of the answer."

Enter hydraulic hybrids. They tap into energy stored in high pressure canisters filled with fluid and nitrogen. They’re cheaper than electric hybrids, and already used in some big rigs and garbage trucks.

Now, using technology developed by the U.S. EPA., Chrysler will build and test a set of hydraulic hybrid minivans. The company hopes to see the same improvement in fuel efficiency as battery hybrids - about 30 to 35% -  but at a much lower cost.

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Auto
2:09 pm
Fri January 14, 2011

Auto Week's "Best in Show" at the Detroit Auto Show

The Porsche 918 RSR concept, named "Best in Show" by the editors of AutoWeek.
Roger Hart Auto Week

Editors at Auto Week perused the offerings at the 2011 North American International Auto Show and named their top picks.

Executive Editor of Auto Week, Roger Hart, said the show had more than two dozen new models on display, and most had one thing in common:

 "There were no fancy, pie-in-the-sky, dreamlike concept cars. Nearly everything billed as a concept looked as if you could buy one tomorrow at your local dealership and drive it home."

Here are their picks:

BEST IN SHOW: Porsche 918 RSR Concept

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Auto/Economy
12:54 pm
Tue January 11, 2011

"Back to business" theme at Detroit auto show

A Hyundai Veloster displayed at the 2011 North American International Auto Show in Detroit
Sarah Cwiek Michigan Radio

The 2011 North American International Auto Show is in a decidedly upbeat mood.

After two years of somber shows, automakers are rolling out new products and showcasing an unusual level of variety and innovation. And they're bullish about how consumers will respond to all those new choices.

Chrysler might be the poster child for the resurgent feeling at this year’s show.

Last year, the automaker barely had a presence, and Chrysler Brand President Olivier Francois remembered how that felt.

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Auto/Economy
12:28 pm
Mon January 10, 2011

Marchionne says he expects a Chrysler IPO later this year

Sergio Marchionne talks with reporters at the North American International Auto Show in Detroit.
Steve Carmody Michigan Radio

Michigan Radio's Steve Carmody just attended a press conference with Fiat and Chrysler CEO Sergio Marchionne.

Marchionne told reporters that his goal is to pay back the government loans by the end of this year.

Chrysler owes around $7.5 billion to the U.S. government.

He said he was heartened by the response to GM's IPO last year and the investor interest in the auto industry makes a Chrysler IPO more likely.

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Auto/Economy
11:32 am
Mon January 10, 2011

Chrysler proclaims a "resurrection"

CEO Sergio Marchionne says Chrysler is back.
user dgtmedia-simone wikimedia commons

Chrysler made the case for its self-proclaimed "resurrection" at the North American International Auto Show.

The company put on an optimistic show as it debuted 16 new Chrysler products. The automaker had only a bare-bones presence at the auto-show last year.

Sergio Marchionne is Chrysler's CEO. He said the display shows the company is once again a viable competitor in the North American car market:

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Auto/Economy
3:59 pm
Mon January 3, 2011

Auto sales expected to maintain momentum

December auto sales numbers are due tomorrow. It’s expected to be another good month for Detroit’s automakers. 

After watching auto sales dwindle in the depths of the recession, auto companies have seen a surge in buying demand in recent months.  December is expected to be the third straight month of strong domestic auto sales.

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