Autoblog

Cerberus Capital Management shot off a nine-page letter to investors outlining ways that Chrysler could sink, while also pointing out that they believe Chrysler's on the track for success. Some of the possible failure scenarios include a nasty recession, an extreme slowdown in the car market, or a further credit downturn. Credit is already looking green around the gills, and the potential for a widespread domino effect that starts with an implosion of the teetering mortgage business would be catastrophic for Chrysler Financial and GMAC, of which Cerberus owns 51 percent. As easy mortgages and equity go, so goes willy-nilly new car purchasing, and we're probably already seeing the results of that adjustment. Cerberus believes that it can weather a mild credit downturn, and even a mild recession, just fine.

One way to attain success is to declare it, and changing the definition doesn't hurt, either. Cerberus optimistically declares that there's no need to be heroes to earn a good return on their investment. It sounds a little bit like they're saying it's okay to tread water. Stating that it's not necessary to build Chrysler up, even though that's the underlying hope, Cerberus thinks that just hanging in there should be good enough to earn a return. All of Chrysler's employees must feel great knowing that Bob Nardelli, Jim Press, and Tom LaSorda can essentially just keep the company coasting along until Cerberus sells Chrysler off so it can collect that mythical return. Chrysler's performance is so far outpacing expectations, and the company does have cash on hand. Those are actual, concrete good signs that Chrysler could yet emerge from its chrysalis.

[Source: Detroit News]

Chrysler has been through more changes in the past six months than any automaker in recent memory, and the announcement of former Home Depot CEO Bob Nardelli as Chrysler's head honcho is just another sign that the auto business in Detroit is rapidly changing. Nardelli was booted unceremoniously at America's home improvement store due to poor stock performance and an outlandish executive salary. He has no automotive experience, but he's the guy Cerberus wanted to lead Chrysler now and in the future. Former CEO Tom LaSorda is staying onboard the Pentastar as vice-chairman and President, and he'll continue to lead the crucial UAW contract talks.

Follow the jump for more analysis and video of Nardelli's press conference.

We've just finished watching the coverage of a press conference held outside the White House following the president's meeting with General Motors CEO Rick Wagoner, Ford CEO Alan Mulally and Chrysler Group CEO Tom LaSorda. We attempted to watch the press conference live on Fox News, CNN and CNN Headline News, but each channel only allowed Rick Wagoner, the first of the three CEOs who grabbed the mic, about 30 seconds of uninterrupted air time. After that we got an earful of pointless and shallow commentary from no-name TV face jockeys who merely ran down the meetings itinerary rather than letting the men talk. Ugh. News channels suck.

Anyway, the gist of the meeting was that the president listened to the Big Three's concerns with an open ear, but offered no commitments that the government would jump to action on any of their points. The meeting's main talking points included energy security, the competitiveness of U.S. manufacturing, health care costs, the weak value of the yen and the rising cost of raw materials like steel. For all of the hoopla over this meeting finally taking place after two postponements, we're surprised that more didn't come of it. Although, considering how big this president is on the free market economy, the three gentlemen from Detroit should have known right from the start that our Commander in Chief would just order them to build better cars that people want to buy. If only it were that simple.

Click on through for a joint statement by General Motors, Ford and The Chrysler Group that was released immediately following the press conference. Feel free to discuss the finer points of government and civic duty in the comments, but keep it civil yourselves.

Chrysler CEO Tom LaSorda says the company may have a go/no-go production decision on the Dodge Challenger, a concept car hit of the Detroit auto show (above), as early as September.

It's been widely assumed that the Challenger was destined for production, to take advantage of the resurgent interest in muscle cars triggered by Ford's hugely popular new Mustang. Not only does the Chrysler group have a history of bringing low-volume, niche-market vehicles to production, but the Challenger also can be based on the existing platform and powertrain underpinning the Chrysler 300, Dodge Magnum and Dodge Challenger, which should help make the Challenger a profitable venture.

[Source: Autoweek]

As Chrysler spends nearly $2.3bil on health care costs per year, about $8K per worker, it was evident at the top level that changes to the system would have to be made. Those changes were announced yesterday and involve a sliding scale of out-of-pocket premium increases that’s based on each salaried employees pay level.

“The more you make, the more you will be asked to contribute,” says CEO Tom LaSorda. This means that premiums paid by a “professional-administrative employee” (read: garden variety white collar worker) will on average not go up, while the top brass, presumably LaSorda himself, will now be responsible for up to 100 percent of their health care premiums. Mid-managers will see a premium increase of around $450 and the average exec’s out-of-pocket will inch up by $1,500.

The overall effect of these changes will be a rise in the average amount of health care costs paid by employees per year from 27 to 31 percent. Kudos to Chrysler for not having the least compensated among its ranks bear the brunt of this increase.

Follow the jump for Chrysler's official press release.

[Source: Chrysler]