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As a man thinks, so he is. Some people are never.
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Turn off the nav system, crumple up that MapQuest printout, and let's find out where the next random turn may take us!
 It's a headline too good to pass up...
As Chrysler sits on blocks, what will Fiat do to fix it?
Given that some folks have suggested that Fiat is an acronym for Failure In Automotive Technology or Fix It Again Tony, the headline gave me a little chuckle.
Whatever their plan is, it's going to have to be a good one.
 From Reuters
Creditors of Chrysler LLC are suing Daimler AG, accusing it of fraudulently stripping the U.S. automaker of "billions of dollars in assets" prior to its 2007 sale of the U.S. carmaker to private equity firm Cerberus Capital Management LP.
The creditors claim that Daimler knew in 2006 that its merger with Chrysler was a failure, and that realizing the extent of Chrysler's debts, Stuttgart, Germany-based Daimler decided to cut its links to avoid being saddled with Chrysler's billions of dollars in obligations.
Let's see, Daimler bought Chrysler in 1998, saw the freight train coming and found a sucker in Cerebus in 2007, and now the folks who rode Chrysler all the way into the ground are looking for someone to bail them out of their bad judgement. I think the vultures are going to find slim pickings on this pile of carrion.
 With the deadline for Chrysler to get a deal done with Fiat just around the corner, things aren't exactly looking favorable for getting that deal done.
Fiat has enough wayward offspring to support without Chief Executive Sergio Marchionne trying to persuade investors Thursday that he can add Chrysler LLC to the brood by an April 30 deadline set by the U.S. government.
The Italian group is already bailing out its CNH Global NV farm equipment business, while the Iveco trucks and core Fiat Auto units are wading through a global slump in demand, although the latter's lineup of smaller and environmentally-friendly models has seen it fare better than most rivals.
Doesn't sound like Fiat has much room left in that suitcase for Chrysler.
Read more at CNNmoney.com
 Chrylser is definitely in dire straights Fiat is putting on the pressure if what I found on MarketWatch this morning is any indication.
LONDON (MarketWatch) -- Italian carmaker Fiat will walk away from Chrysler unless the U.S. carmaker Canadian and American unions agree to significantly reduce labor costs by the end of the month, Fiat Chief Executive Sergio Marchionne told Canadian newspaper the Globe and Mail in a interview published on Wednesday. A deal with Fiat is Chrysler's last chance to avoid a bankruptcy filing and possible liquidation. Fiat, however, is prepared to abandon a deal unless workers at Chrysler's North American plants agreed to match the lower labor costs of Japanese and German plants. At the end of March, the U.S. auto task force gave Chrysler 30 days to complete an alliance with Fiat or face a cut-off of the government funding on which it is subsisting.
This all seems to be coming down to the big problem for Detroit, labor costs. And like it or not, the UAW is facing more and large concessions, voluntary or not.
 Here's your chance! Chrysler is on the block and even though Fiat is going to have the biggest piece (maybe), you, the American taxpayer can have your share of the automotive American dream as well.
Think of it. Imagine being part of an iconic American industry.
But you have to act NOW because after April 30th this offer might not be available.
The number to call is BR-549
Read more about the Chrysler situation at freep.com
 Well, somebody in this proposed alliance has the wrong idea about how things are going to play out. The big question is who.
The Italian automaker Fiat said Friday that it won't assume Chrysler LLC debt — current or future — in deal for a 35-percent stake, contradicting statements from Chrysler's chief executive that it would.
The statement said the Fiat Group "intends to make absolutely clear that the proposed alliance will not entail the assumption of any current or future indebtedness to Chrysler."
By contrast, Chrysler's chief executive said Thursday the Italian automaker would be responsible for 35 percent of Chrysler's debt to the U.S. government should a proposed alliance go through.
You would think that a small detail like this would have been one of the first things made clear in any alliance talks.
Read the entire article at the Associated Press.
 Fox Business obtained a copy of a letter from Chrysler CEO Robert Nardelli to employees and contractors about the restructuring plans. Give the letter a read and let us know what you think. Does it make sense? Will it work out the way he thinks?
Dear Employees,
As part of our continuing effort to keep you informed on the status of our viability plan we submitted to the U.S. Treasury, I want to give you the following update. We have had a series of very constructive discussions with the U.S. Treasury and the Presidential Task Force on the Auto Industry since our Feb. 17 viability plan submission. In recent meetings, we have been impressed and encouraged by the task force’s thoughtful approach and the level of detail in their questions. During the dialogue, and in the additional data we have supplied in response to their requests, we have continued to emphasize that Chrysler is a viable business on a stand-alone basis and our future is further enhanced through the proposed global alliance with Fiat.
In our filing (which is available to the public) we showed clearly that with the addition of the $5 billion loan we requested, Chrysler would be able to continue paying the wages of our employees, the invoices of our suppliers, as well as investing in our future product plan. We would not have been able to achieve this without your hard work, dedication and commitment along with that of other key constituents. Fortunately, our early read of the industry started as you will recall, in November 2007. We took some very aggressive actions before others to restructure our business. As a result, much of the cash expense required for inventory reduction and restructuring is now behind us, and our dealers have achieved the lowest inventory levels among the domestic auto manufacturers.
I assure you, we are continuing to work collectively and determinedly with all constituents to successfully conclude negotiations by March 31, the deadline specified in our U.S. Treasury loan agreement. Throughout the process of seeking government assistance, our plan for viability has been based on a very conservative view of the auto industry, taking into account the current financial crisis and economic environment, which we believe will be with us through the end of 2009.
We were asked by the task force whether Chrysler is viable without a global alliance partner. Our answer is absolutely yes (and I am sure you will agree with me), even with a conservative forecast of U.S. auto industry sales trends. The table below shows our projections for seasonally adjusted annual rate (SAAR) of sales; earnings before interest, taxes, depreciation and amortization (EBITDA) and net debt, all of which was submitted to the government in our Feb. 17 viability plan.
Chrysler Stand Alone 2009 2010 2011 2012 2013 2014
SAAR Level (millions) 10.1 10.6 11.1 11.6 12.1 12.6
EBITDA (billions) 2.9 5.0 3.9 3.9 4.4 4.7
Net Debt (billions) 7.9 7.8 9.2 8.6 7.2 5.6
(All based on conservative assumptions)
Based upon the EBITDA projections and an improved net debt position, the company is well positioned for long-term viability. Our stand-alone plan keeps us on track for 24 product launches over the next 48 months, including a family of electric-drive ENVI vehicles that will help us meet CAFE requirements and support our country’s energy security and environmental sustainability goals. We will continue to work to improve our dealers’ profitability through our Genesis program and begin repayment of our U.S. Treasury loans in 2012.
What’s more, if we were to use the more optimistic SAAR assumption level of a competitor in the table below (which is public knowledge as a result of its submission), we would generate an additional $9 billion of cash flow over six years. We would be able to repay 100 percent of our taxpayer debt in five years, versus starting to pay our debt in 2012, as submitted in our stand-alone plan.
Debt paid in full
Chrysler Stand Alone With Competitive SAAR Levels 2009 2010 2011 2012 2013 2014
SAAR Level (millions) 10.5 12.5 14.3 16.0 16.4 16.8
EBITDA (billions) 3.1 5.8 5.2 5.7 6.1 6.4
Net Debt (billions) 7.6 6.1 5.7 2.9 -0.2 -3.4
Our plan also included very conservative assumptions on net pricing. If we used even very modest positive pricing assumptions, as noted in the table below, we would generate an additional $7 billion of cash flow. When added to the $9 billion in cash flow from stronger sales, this would produce a total of $16 billion in additional cash flow, enough to pay off our debt in only four years.
Debt paid in full
Chrysler Stand Alone With Competitive SAAR Levels 2009 2010 2011 2012 2013 2014
SAAR Level (millions) 10.5 12.5 14.3 16.0 16.4 16.8
EBITDA (billions) 3.4 6.5 6.5 7.3 7.7 8.5
Net Debt (billions) 7.3 5.1 3.4 -1.0 -5.8 -11.1
Another important assumption of our viability plan is market share. We believe our forecast (that we will maintain a U.S. market share of approximately 10 percent) is appropriate, given our company’s history. Since 1992, we have lost only 2.4 percentage points of share in total, while each of our two domestic competitors has experienced a much larger share loss. In fact, each of our domestic counterparts recorded a 45 percent reduction in share during the same period. Our assumption of steady share is conservative, recognizing that we will launch 24 products in the next 48 months, which we’re confident will help us preserve, as well as gain modest share. It’s also worth noting that more than 70 percent of our 2009 products offer increased fuel economy compared with prior year models and that we continue to work on our full line of ENVI products. Our electric and range-extended electric vehicles that start to hit the market in 2010 will clearly give us a competitive advantage in meeting both consumer expectations and government regulations.
 Same story, two different takes.
On CNNMoney.com it says:
DETROIT -(Dow Jones)- Chrysler LLC won't need additional federal funding to run its operations if it succeeds in securing $5 billion in low-interest loans by the end of the month.
The $5 billion will help Chrysler work through the crucial July shutdown period when U.S. auto makers traditionally idle their plants for up to two weeks to retool their factories, a company spokeswoman said.
Sounds like good news, right? I guess that depends where you read about it. Over on the Associated Press we have this take:
DETROIT (AP)- Even if Chrysler LLC gets additional government loans, it could face another cash shortage in July when revenue dries up as the company shuts down its factories for two weeks to change from one model year to the next, its chief financial officer said.
The talk about the economy has seemed to turn a corner away from all-gloom-all-the-time lately and the stock market and news about the automakers have been a lot better as well. Kind of makes you wonder if the mess would be a little less stressful had some not spent the last two years or so talking things down.
 Chrysler held an impromptu press conference Wednesday morning to debunk rumors that it is discussing the sale of its brands, selling off its plants or going out of business. But being sold off as an entire company remains a possibility.
This was in reaction to a report that Chrysler is in talks to sell off parts of the company, including the PT Cruiser brand to a Chinese company.
Denials like this always sound a lot like the dreaded "vote of confidence" for a baseball manager. Yep, he's definitely going to be our manager for the rest of this season. Two weeks later, he's gone.
The big questions seems to be whether Chrysler is worth more being sold in one lump, or broken up.
Read the entire article at USAToday
 The buzz is that the merger talks between GM and Chrysler are heating up.
And it would seem that the biggest point of interest in the deal for GM would be the $11 billion in cash that is currently on Chrysler's books, and Cerberus is said to be considering a large investment in GM stock should the deal get done. With a pile of cash on the table and the prospect of more from the owners of that pile if the merger happens, it looks like this has a good chance to become reality.
With overlapping brands and products, it's hard to imagine the Chyrsler brand remaining viable if this all goes down. It doesn't sound like GM is interested in much more than the cash, and Cerebus wants to be rid of the Chrysler debt. The only question is how much of Chrysler will be salvagable after the forced landing.
Read more at the International Herald Tribune
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