Congressional letter alleges Nardelli and Chrysler failed to disclose more lucrative offer for Viper
by Chris Paukert on Jun 5th 2009 at 1:59PM 
In a letter from California Congressman Darrell Issa to Chrysler's Bob Nardelli, the Auburn Hills executive is charged with failing to disclose information regarding the sale of the Dodge Viper line.
According to the letter obtained by Autoblog from a source close to the situation, the Republican congressman cites Nardelli's explanation as part of the automaker's bankruptcy proceeding that there was "a lack of 'purchaser interest in response to the offering of Chrysler's Connor Avenue Viper manufacturing plant for $10 million." And yet, the letter states, "The Committee has conducted interviews and reviewed materials that clearly show there was in fact one purchaser willing to pay $35 million to purchase the Viper line."
The communication indicates that discussions were held as early as February between Chrysler's emissaries and Joseph Moch Sr. and Joseph Moch Jr. to buy all of the company's Viper-related assets. Further, an oral agreement was reportedly reached in April, with an acquisition agreement drafted later that month for $35 million – substantially more than the $10 million Chrysler was reportedly seeking for the Connor Avenue plant.
Despite the offer from Moch and apparent interest from other companies, the letter notes that Chrysler only reported a single bid for its Viper business to the bankruptcy court's Judge Arthur Gonzalez – the much smaller $5.5 million offer from Devon Motor Works reported last week. In the letter, Congressman Issa warns Nardelli:
"Failure to make this disclosure may have been illegal if you knowingly made false statements in response to questions under oath."Perhaps the central question is: Why would Nardelli and Co. fail to disclose the Moch offer? Issa's letter offers a theory:
As you know, the Fiat group includes Ferrari, a Viper competitor in the sports car market. If it is the case that Fiat used its "hard-fought" superior bargaining position to establish as a condition of the merger a requirement that Chrysler allow the Viper brand to disappear in order to reduce competition for Ferrari, this too must be presented to the court.Issa goes on to urge Nardelli to "disclose all legiimate offers for Viper to the court at the hearing," (which is slated to occur today, June 5) as well as "all records and communications between Chrysler and its agents with Joseph Moch Sr., Joseph Moch Jr., and their legal representatives."
So... did Nardelli and Chrysler really fail to disclose more lucrative offers for the Viper – possibly because of pressure from new parent Fiat? Stay tuned.
Get a WordPress.com Blog
Reader Comments (Page 1 of 3)
tankd0g 2:05PM (6/05/2009)
I'm shocked. No wait, the other thing.
Reply
AMcA 9:35PM (6/08/2009)
If there seriously were bidders ready, willing and above all ABLE to pay $35M for Viper, they would have stepped up to the plate in the bankruptcy and paid more than $5.5M.
But they didn't. They probably weren't ABLE to do so.
And Fiat doesn't control whether Viper lives or dies. It's a rejected asset of the bankrupt company, and it's up to the trustee to maximize the value of that asset for the creditors. Fiat has no say.
Marcello 2:06PM (6/05/2009)
Holy S**T ! wow its like a soap opera with these bankruptcies lol
Reply
Ed 2:07PM (6/05/2009)
I'm honestly so glad I'm alive right now. I have never been more entertained by real-world happenings as I have been over the past 90 days watching the better-than-fiction happenings in the auto industry.
Reply
Jake 2:26PM (6/05/2009)
I am glad that I am alive right now too. I bet being dead sucks,
WS 2:08PM (6/05/2009)
Sure, they're both sports cars, but to say Ferrari and Viper are direct competitors goes a bit far I think.
Reply
zamafir 2:13PM (6/05/2009)
lmao, probably the most entertaining thing i've read in years.
if you want something insanely fast and American and inexpensive (we are talking vs Ferrari here) buy a viper
if you want something steeped in pedigree, absurdly expensive, an focusing on completely different objectives buy a ferrari.
I'm not sure anything could be more ludicrous.
phoenix 2:55PM (6/05/2009)
Ferrari is to Viper what Ducati is to Harley Davidson: They're both top-shelf icons, but they're not competing in the same arena at all.
Only place you *will* see Ferrari vs. Viper is in the GT2 class at a American Le Mans Series race, the (factory-backed) Ferraris running up front with the Porsches, vs. the strictly-privateer lone Viper struggling to keep up.
Redline 3:38PM (6/05/2009)
Only problem is that Vipers are known to be quick with decent handling, Harleys are slow with crappy handling.
Jimbo 4:30PM (6/05/2009)
The argument that the Viper is competitor to Ferrari is ludicrous. However, Fiat also has Maserati, which does at least compete in the same price class. So if you replace Ferrari with Maserati, the argument does have a shred of believability.
bakka 9:54AM (6/06/2009)
If this is true then Fiat is ADMITTING that the Viper is better car then a Ferrari.
Joe C. 3:46PM (6/06/2009)
Well if you think about it the Dodge Viper ACR did post a better time on the Nurburgring than Ferrari and many of the other exotic super cars. The ACR is roughly 100k and a Ferrari is anywhere from 150k to 1M.Even the Enzo couldn't top the time laid down by the ACR.
Rick C. 2:13PM (6/05/2009)
Get Mulder and Scully. I spell a conspiracy. Or is it a soap opera?
Reply
Yikes 2:09PM (6/05/2009)
Isn't this typical Government practices. Winning bid goes to largest campaign contributer, not highest bidder.
Reply
Joe K. 2:18PM (6/05/2009)
Naughty word Lucas...
Lucas 4:25PM (6/05/2009)
"Retard" is a naughty word?
csquirrel 12:58PM (6/06/2009)
I can see what you're saying, but from the article this was NOT a government made decision. Chrysler was hiding this information from the government to appease Fiat and nothing more. If I were the government I'd be super pissed off knowing that they opted not to take an extra 25million as their company failed and the asked for my help for dubious reasons.
On an unrelated note I'm so happy to see Ford didn't take the government's money. Right on to them for slogging through the mess.
Vera 2:11PM (6/05/2009)
Take some time to look up the so called buyers in this deal--they are a couple of real estate developers who are in foreclosure on their development deals. Clearly, this was not a legitimate offer.
Reply
Sammy 2:20PM (6/05/2009)
As someone who works close to the government purchasing world, just becuase someone bids, doesn't mean their bid is legitimate. They also have to show they can follow through and demonstrate financial health and financing.
TigerMil 3:57PM (6/05/2009)
Amen Sammy! The words you want are 'responsive' and 'responsible.' Moch & Moch were apparently neither....let's see what Nardelli says!