Troubled automaker claims it faces bankruptcy without more bailout cash. Chrysler has also promised to cut costs by 700 million US dollars per year by eliminating 3,000 jobs and cutting a shift at an undisclosed production plant.
In concert with its cross-town rival and fellow bailout recipient GM, Chrysler is also asking the US government for more money to keep it in business.
Chrysler has asked for an additional 5 billion US dollars in loans, on top of the 4 billion it has already received. Chrysler claims that without the loans, its operating cash will dip below the dangerous level of 2.5 billion and force it to declare bankruptcy. The same situation it was in last December when it petitioned the government for the initial bailout payment.
"Bankruptcy would cost a lot more money and cause tension and concern for dealers and customers, and it's not necessary," says Robert Nardelli, Chrysler CEO.
Chrysler claims its surest path to viability is in its recently founded alliance with Fiat, in which the Italian automakers will receive up to 35 percent of Chrysler equity in exchange for investments in technology and production.
The Detroit automaker has also promised to cut costs by 700 million US dollars per year by eliminating 3,000 jobs and cutting a shift at an undisclosed production plant.
Chrysler will also be eliminating the Chrysler Aspen and PT Cruiser and the Dodge Durango after having already discontinued the Chrysler Crossfire and Pacifica and the Dodge Magnum.
Chrysler is experiencing a severe collapse in sales. Unit sales were down 30 percent for 2008. January sales for this year were down 55 percent compared to January 2008.