Now The Spin From Chrysler's CEO Nardelli

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December 22, 2007

As reported by the Detroit News, it now seems Chrysler's CEO is rethinking what he told the Wall Street Journal the other day with regard to the company's financial situation.

Nardelli quotes from the Detroit News:

"Chrysler has ample liquidity,..."

"We are fully funded with working capital to meet our present and future needs and objectives. We are on target and have the unwavering support of Cerberus (Capital Management LP), as well as our other key partner, Daimler AG."

"...imperative to correct the record since such misinterpretations and misperceptions are misleading and could leave the wrong impression in the minds of investors."

"We are trying to instill a sense of urgency throughout the work force, putting our capital to work effectively and efficiently, streamlining inventory, improving current products and developing new and innovative vehicles."

"Our underwriting assumed, and fully planned, that Chrysler would incur losses in the near term."

"Chrysler is already on track to exceed its multi-year restructuring and recovery plan on virtually all key metrics. We fully endorse their strategic direction."

I have refuted each and every point Nardelli has just made on TAL over the past few months. There are no mis-interpretations on my part, as Chrysler has neither the money, time or the focus under Cerberus' ownership which has me still questioning if they can survive as a company.

As I understand the automotive industry, it takes time, money, product and leadership (over-simplified) to turn an organization such as Chrysler around. The product ultimately being the most important.

Given a product cycle is 4 - 6 years, the US economy is slowing down, retail sales eroding, I have no reason to be but pessimistic about the future of Chrysler under Cerberus. The automotive industry is not a turn-key operation and change will not happen overnight at Chrysler under their new owners or when they were part of Daimler.

Daimler divested themselves of Chrysler for a reason.

Just the other day I spoke with a recent retiree of Chrysler. His main concern was his pension and what will happen if they go bankrupt.

I do hope I am wrong and Cerberus turns this ship around! It will just take more than spin from their CEO.

 

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