Chrysler Preparing Two Viability Plans

Frank Klegon, a Chrysler executive vice president, said in an interview yesterday at the Chicago Auto Show that Chrysler is preparing two viability plans for Congress next Tuesday.

On February 17th, Chrysler (along with fellow Detroit automaker GM) must submit a restructuring plan to the U.S. Congress in order to keep the $4 billion loan it received from the government late last year. If all goes well and Chrysler is able to prove that it can become a financially viable company able to repay its government loans, it may get access to another $3 billion. In an effort to prove that it is considering all possible options, Chrysler will present a plan for operation as a stand-alone company, and a plan for operation under a merger with Italian automaker Fiat.

“We will be presenting what a Chrysler plan looks like and how a Chrysler-Fiat plan is augmented to that,” Klegon said, ensuring that either way Chrysler can survive.

Klegon says a team is working with Fiat to determine what product sharing would occur, and getting into details of what products each automaker would build and sell. Chrysler covets Fiat’s small car designs and engines – along with the access Fiat would provide to foreign markets – while Fiat would benefit from Chrysler’s dealership network in the largest market for automobiles in the world (except last month).

Klegon would not say which specific products might be shared. “Nothing’s settled by product, by brand or any of that kind of stuff yet,” he said.

Although Chrysler has continually said that its deal with Nissan is still planned, Klegon said that no contract has been signed. “We are still working through that. That stuff is still active.” Nissan was to provide Chrysler with a small car based off the Versa, while Chrysler would build the next generation of Nissan’s Titan pick-up truck.

Source: Detroit Free Press

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