In a bankruptcy court filing Robert Nardelli, CEO of Chrysler LLC, says that the company recently offered for sale its entire Conner Avenue plant in Detroit, the facility that manufactures Dodge Vipers and engines, and the entire Viper business for only $10 million.
The 392,000 square-foot plant occupies 27 acres where 115 employees assemble the Dodge Viper SRT10 Coupe and Roadster and their V-10 engine. The Viper business earned $16 million in 2008.
Chrysler received “no purchaser interest,” in what amounted to a fire sale of the sports car line.
The lack of any interest whatsoever demonstrates just how depressed the market is for automotive assets of any kind, and it has direct implications for General Motors as it struggles to sell its Saturn, Opel, Saab, and Hummer brands to raise cash and trim its bloated product portfolio.
One of the core arguments of bondholders, who oppose the U.S. Treasury Department imposed restructurings of both companies, is that they would be better off if the companies were broken up. If there are no buyers ,then this speculative assertion is demonstrably false, legally allowing the proposed restructurings to go forward.
A hearing is going on right now in the U.S. Bankruptcy Court in New York as to whether Fiat’s takeover of Chrysler can proceed by transferring Chrysler assets to the Turin-based small car maker over the objections of bondholders and other creditors.
It is Nardelli’s sworn testimony that the objecting bondholders “simply ignore the fact that the U.S. Treasury Department was the only lender willing to invest in us. As credit markets tightened and automotive sales deteriorated in the fall of 2008, Chrysler suffered a severe liquidity crisis. We were unable to obtain financing from banks or other traditional sources. As a result, and as a last resort, Chrysler approached the United States government for financial support,” Nardelli said. (more…)