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Posts Tagged ‘automotive bailout’

Marchionne Will Eventually Choose Either Chrysler or Fiat

Exec doesn’t plan to lead both makers indefinitely.

by on Dec.08, 2009

Sergio Marchionne will relinquish either his post at Chrysler or Fiat within the next 24 months.

Sergio Marchionne will relinquish either his post at Chrysler or Fiat within the next 24 months.

It’s difficult enough serving as CEO, especially when you’re overseeing a company desperately struggling to re-emerge from bankruptcy.  But Sergio Marchionne is not only running Chrysler but also serving as chief executive of its Italian partner, Fiat.  How long that arrangement will continue is unclear, but the Canadian-educated executive says it won’t be indefinitely.

Speaking at the Peterson Institute for International Economics, in Washington, Marchionne said he plans to relinquish one of his posts within the next 24 months.

The executive offered a mix of optimistic and pragmatic observations about Chrysler and the industry as a whole, during his speech and subsequent question-and-answer session, often while making one point.  “We walked out of this process (bankruptcy) cleaner “ than before, Marchionne asserted, “like going through a washing machine, but we ended up with the same stuff we had.”

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Not surprisingly, Marchionne cautioned that “We are not promising miracles at Chrysler,” even though many observers felt the company over-promised during an all-day briefing, on November 4th outlining the automaker’s turnaround plan.  It called for Chrysler to regain much of the market share it has lost, in recent years, and post billions of dollars in profits over the next five years.

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Pelosi to Big 3: Bailout Must Pay Off for Taxpayers

Automakers warned they must meet CA CO2 standards.

by on Feb.16, 2009

Pelosi: bailout carries a stiff price

Pelosi: bailout carries a stiff price

Two key Democratic administration players sent a clear if contradictory message over the weekend to Chrysler and General Motors that they must radically reshape themselves by making profits while cutting costs and preserving jobs and benefits. This of course is what Chrysler, General Motors and Ford have been trying to do for years with little success.

In a letter, just released, Speaker of the House Nancy Pelosi and Financial Services Chairman Barney Frank wrote to Robert L. Nardelli, Chairman and CEO of Chrysler, and Rick Wagoner Jr., Chairman and CEO of General Motors. In it they insisted that their company restructuring plans due tomorrow must “demonstrate to the world that you are willing to make the tough decisions that modernize your operations, restructure your debt, enhance your competitive status in the global marketplace, and protect American jobs for the future.”

Pelosi from California and Frank from Massachusetts also demanded that the struggling companies demonstrate they can meet the fuel efficiency requirements set forth in the Energy Independence and Security Act of 2007 that requires a combined fleet average of at least 35 miles per gallon by model year 2020.

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Car Czar Out; Auto Politburo In

Geithner likely to be the more equal of equals on task force

by on Feb.16, 2009

The Czar is dead.  Who'll many the Politburo?

The Czar is dead. Who'll man the Politburo?

The U.S. apparently will have a de-facto Politburo, rather than a single car czar. The Obama administration reportedly is prepared to name a task force led by Treasury Secretary Timothy Geithner and National Economics Council Chairman Larry Summers. The third member of the task force would be Ron Bloom, a former Wall Street Banker, turned labor activist, who over the years has advised the Air Line Pilots Association, United Steel Workers and the United Auto Workers. Bloom also played a pivotal role in the restructuring of the U.S. Steel industry.

Bloom’s appointment, if it comes to pass, means that the panel will have a decidely pro-union tilt, which could make it easier for the UAW to accept some concessions. “We are going to need a restructuring of the these companies,” noted David Axelrod, a top advisor to Pres. Obama, during a Sunday appearance on Meet the Press. However, Axelrod also stressed that UAW members aren’t the only ones to sacrifice.

Chrysler and General Motors are preparing to provide the U.S. Treasury with a preliminary plan, showing how they plan to repay the loans and become profitable. Those plans are due this week. However, key parts of the packages, including revised contracts with the union and negotiations with creditors are still incomplete.

Meanwhile, GM is floating the prospect of declaring bankruptcy to force concessions from reluctant stakeholders, notably its union and bond holders.

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