- Jun 5, 2009
Congressional letter alleges Nardelli and Chrysler failed to disclose more lucrative offer for Viper
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.