Chrysler says it's here to stay despite financial restructuring

Suzanne Adams
Miner Staff Writer

Chrysler is disputing claims by the Wall Street Journal and other media outlets that it is in financial trouble.

The Journal, earlier this month, quoted Chrysler CEO Robert Nardelli telling employees at a meeting that the company is headed for a substantial loss and is scrambling to sell assets to raise cash.

Earlier this year, Chrysler purchased the Yucca Proving Grounds from Ford Motor Company for $34.9 million.

Chrysler reopened the facility in November. At that time, Chrysler pledged 75 new jobs and $10 million in renovations to the proving grounds using local businesses.

Chrysler spokesperson David Barnas said he has no knowledge that the facility is up for sale.

The company is striving to improve its working capital.

It is disposing of non-core assets and reinvesting that cash into product development, such as the Yucca Proving Grounds, he said.

Daimler AG, once DiamlerChrysler, sold Chrysler to Cerberus Capital Management LP in August.

In November, Chrysler announced it was stopping production of four models - the Pacifica, Crossfire, Magnum and the PT Cruiser convertible -and cutting 8,500 to 10,000 jobs in five North American plants by 2009.

There are also rumors that the company plans to phase out the Sebring convertible.

According to its Web site, Chrysler has seen a drop in U.S. sales for the past three months. In November, the company saw a 2 percent drop in U.S. sales.

In October, it saw a 9 percent drop.

Nardelli disputed the claims of financial trouble in an online news release.

"There have been several recent media reports that have painted an inaccurate picture of Chrysler LLC's current financial position," he states.

"First and foremost, it is important to note that Chrysler is not only meeting, but, in many cases, exceeding its financial targets heading into 2008.

"Importantly, Chrysler has ample liquidity. We are fully funded with working capital to meet our present and future needs and objectives. We are doing what any other prudent company is doing during this challenging economic environment," Nardelli states. He went on to state that the company has the full support of Cerberus board of directors and the company has a plan to "return the company to long-term profitability."

According to Nardelli's statement, Chrysler plans to replace the Pacifica, Crossfire, Magnum and PT Cruiser with five other vehicles - a new Dodge Ram pickup; a new crossover vehicle, the Dodge Journey; relaunch the Dodge Challenger and add two hybrid vehicles, the Chrysler Aspen and the Dodge Durango.