White House confirms Chrysler will file for bankruptcy

[Wretched]

Hello all,

Overnight the sensational announcement was made to the world that Chrysler Group LLC has repaid it’s government loan in full, and an incredible six years early.

This is an outstanding display of strength for our organisation, underscoring the Don’t Hold Back approach we’re all embracing within Chrysler Australia.

Certainly reports from the Aussie contingent that visited Auburn Hills last week confirm that Chrysler HQ is enjoying an all-time high level of energy and enthusiasm, topped off with a wide range of fantastic new product heading our way in the not-too-distant future. Fantastic times to be a part of this team.

A media release is below, attached on a word document and has been uploaded to Direct Connection under Article #21585. Please feel free to share as desired.

May 25, 2011


Chrysler Group LLC Completes Refinancing and Repays U.S. and Canadian Government Loans in Full
• More than six years ahead of schedule, Chrysler Group fulfils promise to taxpayers and repays original government loans totalling US$6.7 billion, in addition to US$1.8 billion of interest and other consideration
• Intervention by U.S. and Canadian governments and strategic alliance with Fiat leads to 16 all-new or significantly refreshed vehicles currently in dealerships; more than US$3 billion in facility upgrades; and increased employment with the hiring of 6,000 Chrysler Group employees
• Company’s return to profitability and double-digit worldwide sales increases show new product line-up gaining momentum in marketplace
Chrysler Group LLC today announced the repayment of US$7.6 billion in outstanding U.S. and Canadian government loans following the completion of new refinancing transactions. The original loans were repaid in full, more than six years ahead of schedule, along with the payment of accrued interest and additional consideration.

Today, the Company made payments of US$5.9 billion to the U.S. Treasury (UST) and US$1.7 billion to Export Development Canada (EDC) to retire the loans granted when Chrysler Group began operations in June 2009. EDC is the holding company through which the Canadian federal and Ontario provincial governments extended loans to Chrysler Group.

The Company borrowed US$5.1 billion from the UST and US$1.6 billion from the Canadian governments in June 2009 (US$2.6 billion from the original loan facilities was undrawn and the facilities will be cancelled). In total, Chrysler Group has paid the UST US$6.5 billion and the EDC US$2.0 billion, including US$1.8 billion in interest and additional consideration.

“Less than two years ago, we made a commitment to repay the U.S. and Canadian taxpayers in full and today we made good on that promise,” said Sergio Marchionne, Chief Executive Officer, Chrysler Group LLC. “The loans gave us a rare second chance to demonstrate what the people of this Company can deliver and we owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as a strong and viable carmaker.

“Paying back the loans, along with the financial community’s investment in our refinancing packages, marks another step in the Company returning as a competitive force in the global automotive industry.”

Chrysler Group confirmed the completion of new financing transactions consisting of a term loan totalling US$3.0 billion, debt securities totalling US$3.2 billion and a revolving credit facility of US$1.3 billion. The new financing will save Chrysler Group an estimated US$350 million a year in interest expenses.

The Company used the net proceeds from the term loan and bonds, together with US$1.3 billion from an equity call option exercised by Fiat for an incremental 16 percent fully diluted ownership interest, to repay the government loans. The revolving credit facility remains undrawn.

Chrysler Group continues to have more than US$10 billion in liquidity after the refinancing and loan payoffs, which includes the undrawn revolving credit facility.

“Everyone in the extended Chrysler Group family, from employees to union partners to dealers and suppliers, have worked tirelessly to deliver on our promises and to win back public trust in the Company and our products," said Marchionne. "There is more work to be done as we remain focused on fulfilling the goals outlined in our 2010-2014 business plan.”

Goldman, Sachs Co. advised Chrysler Group on structuring the financings and Evercore Partners advised the Company's Finance Committee.

About Chrysler Group LLC

Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat S.p.A., produces Chrysler, Jeep, Dodge, Ram, Mopar and Fiat vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler Group’s culture of innovation, first established by Walter P. Chrysler in 1925, and Fiat’s complementary technology that dates back to its founding in 1899.

Headquartered in Auburn Hills, Mich., Chrysler Group’s product line-up features some of the world's most recognisable vehicles, which in Australia include the Chrysler 300C, Jeep Wrangler and Dodge Nitro. Fiat contributes world-class technology, platforms and powertrains for small- and medium-size cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler Australia Pty Ltd distributes Chrysler, Jeep and Dodge vehicles throughout Australia.
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http://www.media.chrysler.com/newsre...id=10922&mid=2

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Chrysler repays debt to Uncle Sam

http://www.goauto.com.au/mellor/mell...25789B000E6AAC

Fiat moves another step closer to full Chrysler takeover as government loans repaid

25 May 2011

By RON HAMMERTON

CHRYSLER Group has repaid loans and interest worth $7.6 billion ($A7.2b) to the United States and Canadian governments, paving the way for Fiat majority ownership from later this year and, eventually, a return to the stock exchange.

The repayments – paid in full six years early – were only made possible by a refinancing deal in which Chrysler borrowed $3 billion and arranged debt securities of $3.2 billion and a revolving credit facility of $1.3 billion.

The new finances will save Chrysler Group an estimated $350 million ($A332m) a year in interest and make the company more palatable when it makes its initial public offering (IPO) on the New York Stock Exchange, perhaps within the next 12 months.

Under the latest deal, Fiat SpA raises its stake in Chrysler from 30 per cent to 46 per cent, making it the largest shareholder in the company, ahead of the United Auto Workers healthcare trust, whose slice drops from 59.2 per cent to 45.6 per cent.

As well, the US government share drops from 8.6 per cent to 6.6 per cent and the Canadian share is reduced from 2.2 per cent to 1.7 per cent.

The governments rode to the rescue of Chrysler when it collapsed into chapter 11 bankruptcy in 2009, helping it to reorganise under new owner Fiat. The new-look company recently announced its first quarterly net profit of $US116 million ($A106m).

Fellow Detroit former bankrupt General Motos, which has also repaid all of its government loans on renewed profitability, is already re-listed on the stock market.

Announcing the repayments, Chrysler Group CEO Sergio Marchionne said that when Chrysler accepted the government money two years ago, the company had made a commitment to repay the US and Canadian taxpayers in full.

“Today we made good on that promise,” he said. “The loans gave us a rare second chance to demonstrate what the people of this company can deliver, and we owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as a strong and viable car-maker.

“Paying back the loans, along with the financial community’s investment in our refinancing packages, marks another step in the company returning as a competitive force in the global automotive industry.”

Wearing a red, white and blue ‘Paid’ lapel button that was handed to all Chrysler employees at yesterday’s announcement at a Chrysler plant near Detroit, Mr Marchionne thanked the workforce for the turn-around that had made the loan repayments possible.

“Everyone in the extended Chrysler Group family, from employees to union partners to dealers and suppliers, have worked tirelessly to deliver on our promises and to win back public trust in the company and our products," he said.

"There is more work to be done as we remain focused on fulfilling the goals outlined in our 2010-2014 business plan.”

Although he did not put a date on it, Mr Marchionne reconfirmed that Chrysler was planning an IPO, which will help pay out the remaining government ownership of the company. Analysts believe that might happen late this year or early 2012.

With Chrysler’s government loans repaid, the company now only has to put into production a car that can achieve 40 miles per gallon (5.88 litres per 100km) in the US to remove the last hurdle for Fiat to take more than 50 per cent share of the American auto-maker.

The loan repayments and introduction of the fuel-efficient car on a Fiat platform were requirements of the US government, laid down when it signed off on the deal to allow Fiat to take control of Chrysler’s rescue upon its exit from chapter 11.

A new Chrysler model built on Fiat’s small C-EV0 platform that underpins the Alfa Romeo Giulietta is expected to go into production in Illinois by the end of this year, achieving the fuel requirement and allowing Fiat to up its stake to 51 per cent and potentially more.

Since it formed the strategic alliance with Fiat, Chrysler has launched 16 all-new or refreshed vehicles and spent more than $3 billion in facility upgrades.

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http://www.autoblog.com/2011/05/24/c...e-suvs-to-tha/

Breaking: Chrysler repays the rest of its federal loans... are SUVs to thank?

by Jeff Glucker (RSS feed) on May 24th 2011 at 1:55PM

It's Official: Chrysler has announced that it has repaid its multi-billion dollar obligations owed to both the United States and Canadian governments. Adding up both loans plus interest, Chrysler has just shelled out a tidy $7.6 billion. The U.S. receives $5.9 billion and Canada will get $1.7 billion.

Chrysler was able to secure new means of financing, which allows the automaker to pay off its government obligations a full six years ahead of the original payment schedule. While this new financing still involves debts, it saves Chrysler an estimated $350 million per year in interest. This move also allows Chrysler to remain liquid, with more than $10 billion in assets ready to roll.

Under the direction of the U.S. government, Chrysler partnered up with Fiat, and the goal was to bring smaller, more fuel-efficient vehicles to the states. Yet as an opinion piece in The Detroit News sagely reminds us, it wasn't really the smaller cars that helped Chrysler, but the newly refreshed sport utility vehicles. The all-new Dodge Durango and Jeep Grand Cherokee models helped push sales up 17 percent in 2010.

Regardless of how they got there, this move should serve to instill confidence in the U.S. car-buying public. Chrysler continues to add new or redesigned vehicles to its lineup and has a strong media campaign behind those vehicles. Will high gas prices slow the positive momentum that Chrysler has built up, or is this the chance for the Fiat portion of the relationship to step up and shine? Sound off in Comments, and check out the full press release posted after the jump.

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http://www.autoblog.com/2011/06/02/f...at-14-billion/

Report: Federal auto bailout losses estimated at $14 billion

by Chris Shunk (RSS feed) on Jun 2nd 2011 at 10:01AM

The federal bailout of General Motors and Chrysler cost U.S. taxpayers roughly $80 billion back in 2009, but only two years later, it appears Uncle Sam will get most of its money back. The Associated Press reports that the Obama Administration now estimates that the bailout will "only" cost taxpayers $14 billion. That's down significantly from the projected 60 percent loss estimated by the Treasury Department back in 2009, and the money is also expected to arrive much sooner than originally expected.

The Obama Administration released the more optimistic view of bailout payback prospects in advance of a visit by the President to a Chrysler plant in Ohio. Conveniently, Chrysler last week paid off its $5.9 billion in U.S. loans and $1.7 billion in Canadian loans, putting the bailouts back in the news, albeit with a positive spin. GM, meanwhile, has already paid back more than half its $50 billion in loans, and the government still holds a significant portion of GM stock, which it can sell to further cut the cost of the bailout.

Treasury Secretary Timothy Geithner points to the bailouts as a cornerstone of the resurgence of manufacturing jobs, adding "While we will not get back all our investments in the industry, we will recover much more than predicted."
[Source: Associated Press | Images: Mandel Ngan/AFP/Getty]

[Bossxr8]

Should make them pay back every cent they got.

Seems ridiculous that now they are making big profits that that $14 billion shouldn't have to be returned to the taxpayers.

[janddbone]

Jobs are already increasing, great news and $14 billion well spent I think...

I feel sorry for all the old share holders and others who have liabilities with the old companies...

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http://www.caradvice.com.au/121805/f...l-of-chrysler/

Fiat takes majority control of Chrysler
By Alborz Fallah | June 3rd, 2011

It has been long time coming, but Italy’s Fiat has today officially taken majority control of Chrysler Group

A further $500 million payment to the U.S. Treasury saw the Italian car maker extend its shareholding from 46 to 52 percent.

The takeover marks a historic day for Chrysler, a traditionally American brand that was formed in 1925. In 2009, amid the global financial crisis, Chrysler filed for bankruptcy and was partially sold to Fiat.

Barack Obama’s administration invested $12.5 billion to bail out the manufacturer and saw Fiat as a good partner to bring the iconic brand back to life. So far $11.2 billion of the money has been repaid, but the U.S. government believes that it’s “unlikely to fully recover the difference of $1.3 billion.”

Fiat’s boss Sergio Marchionne has set a rather ambitious target for his automotive empire (which also includes the likes of Alfa Romeo, Ferrari and Maserati) to sell 6.6 million vehicles annually by 2014. Last year saw the brand’s manage just 3.6 million sales.

The original deal with the U.S. Government was to encourage Fiat to meet sales and emission targets to gain more shares in Chrysler. Firstly, Fiat had to build a fuel-efficient engine in the U.S., which it did (Fiat 1.4-liter MultiAir engine being built in the Village of Dundee, Michigan). Secondly, it had to export $1.5 billion in Chrysler vehicles and open up Fiat dealerships to Chrysler products in Europe and Latin America (which it did by April).

The third and final goal (which will see Fiat receive a further five percent share holding) is to design a new Dodge that can manage 40mpg (5.88L/100km) which it has planned to do by year’s end.

As it stands today, the Canadian government owns 1.5 percent and United Auto Workers’ Voluntary Employee Beneficiary Association (VEBA) owns the remaining 41.5 percent of Chrysler.

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http://www.autoblog.com/2011/06/03/f...m-chrysler-st/

Report: Fiat comes to terms with Treasury to buy Fed's $560M Chrysler stake

by Aaron Richardson (RSS feed) on Jun 3rd 2011 at 10:30AM


Fiat has reportedly reached a deal to pay $500 million for the rest of the federal government's share of Chrysler, along with another $60 million for the government's option to buy most of the remaining shares of Chrysler stock. The purchase, which President Obama should officially announce today, will settle the remainder of Auburn Hills' debt to the government.

The federal government bailed the automaker out to the tune of $4 billion under the Bush administration, with the total eventually rising to $5.9 billion. Fiat's purchase will account for the last of the debt and once again put the company under foreign ownership.

With the deal, Fiat will gain a 52 percent stake in the company.
[Source: The Detroit News]

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http://www.autoblog.com/2011/07/14/m...-management-s/

Marchionne pushing to consolidate Fiat, Chrysler management... soon

By Chris Shunk
Jul 14th 2011 11:30AM

Fiat is well on its way toward owning 57 percent of Chrysler by the end of 2011, and CEO Sergio Marchionne appears to be ready to take the integration of the two companies to the next level. Bloomberg reports that Marchionne plans to unify the management structure of the two automakers, adding that a tie-up will happen "pretty quickly."

While Marchionne provided no timetable for such a move, one possible date to look out for is Fiat's July 26 earnings report. Marchionne's plan to unify management at the two automakers is the next step in a broader plan to reduce costs while contributing $140 billion in combined revenue by 2014. At this point, there are few products that are being shared between Fiat and Chrysler, though by 2014 there should be a lot more platform and powertrain commonality.

One unknown at this point is whether any top-level Chrysler or Fiat execs will be shown the door when the management unification plans become public. If the two companies are really going to combine, we're thinking that some overlap is likely to result in job cuts on both sides.

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http://www.autoblog.com/2011/07/22/c...d-of-schedule/

Chrysler repays last of TARP loans six years ahead of schedule
By Chris Shunk
Jul 22nd 2011 8:25AM

hrysler has taken the final step towards freedom from Uncle Sam by paying off the rest of its government loans. USA Today reports that Chrysler and Fiat paid the Treasury Department $500 million for 98,461 shares and $60 million for shares from a pact with the United Auto Workers' VEBA retirement trust.

The payment means that Chrysler shed its government obligations a full six years ahead of schedule. The automaker made the move in part to show U.S. car buyers that it is independent of government control, but the payment also means that the automaker no longer has to pay interest rates on the loan.

Assistant Secretary for Financial Stability Tim Massad called the move "a major accomplishment and further evidence of the success of the Administration's actions to assist the U.S. auto industry." He added, "We didn't make the auto interventions to make money, we made them to save jobs – and on that front, we dramatically succeeded."

True enough, but Uncle Sam probably won't receive the $1.3 billion owed by Old Chrysler, which was separated from the current Chrysler during bankruptcy. The department said in a statement that it has the right to recover assets from Old Chrysler, but doesn't expect "a material recovery of those assets."

News Source: CNN Money, USA Today

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http://www.autoblog.com/2011/07/26/f...erly-earnings/

Ford, Chrysler report quarterly earnings
By Jeff Glucker
Jul 26th 2011 1:00PM

As we continue to pull the daily sheets from our Word of the Day calendar and accountants are busy counting the days of their fiscal calendars, the pencil pushers at Ford and Chrysler can rest easy for a moment because they just finished compiling the numbers for the second quarter.

Ford earned a net income of $2.4 billion in Q2, which is actually $201 million less than it had raked in by this time last year. The net income was affected by a reduction in staff, various dealership actions, pension settlements in Belgium and the move to eliminate the Mercury brand. The automaker enters the rest of the year with $32.2 billion in liquid assets, which will come in handy as Ford looks to expand its market share around the globe.

Chrysler as gone in a different direction than Ford for the second quarter of 2011. Compared to Q2 last year, the automaker is up 30 percent with net income of $13.7 billion. Chrysler's numbers should continue to grow as it releases new or redesigned models, and has paid off major debts owed to the United States and Canadian governments.

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http://www.autoblog.com/2011/07/28/m...ee-fiat-and-c/

Marchionne creates unified management team to oversee Fiat and Chrysler
By Steven J. Ewing
Jul 28th 2011 4:33PM

"We have now reached the right moment to step on the accelerator of the Fiat-Chrysler integration," Sergio Marchionne said this week in a statement regarding his appointment of a single management team for both companies. According to Automotive News, four regional chiefs – North America, South America, Europe and Asia – will be in charge of Fiat and Chrysler effective September 1.

Marchionne will retain his position as Chief Operating Officer for North America. Gianni Coda, Fiat's head of purchasing, will now run the operations in Europe, while Cledorvino Belini – formerly the head of Fiat Brazil – will take charge of South America. Michael Manley, head of Jeep, will oversee up Asia.

The newly formed Group Executive Council (GEC) is the highest decision-making executive body within the company, outside of its Board of Directors. In addition to the four regional COOs, each individual brand will have its own head, consisting of Olivier Francois (Fiat), Lorenzo Sistino (commercial vehicles), Harald Wester (Alfa Romeo/Abarth/Maserati), Saad Chehab (Lancia/Chrysler), Michael Manley (Jeep) and Reid Bigland (Dodge).

News Source: Automotive News - sub. req.

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http://www.autoblog.com/2011/08/18/f...o-slow-dealer/

Fiat likely to miss 50,000 U.S. sales target due to slow dealer openings
By Jeremy Korzeniewski RSS feed
Aug 18th 2011 8:28AM

Turns out Fiat may have been a wee bit ambitious in setting a 50,000-unit goal for the first year that its diminutive 500 hatchback and convertible have been on sale in the United States. Through the month of July, Fiat had sold a total of 7,982 500s in the States in 2011.

That figure includes 3,038 units sold in the month of July, but the monthly tally should continue to rise as more and more dealerships open in markets expected to snatch up the cute and spunky little hatch.

Laura Soave, the woman Fiat chief Sergio Marchionne has put in charge of the Fiat brand in America, isn't ready to completely dismiss the company's original 50,000-sale projection, saying instead that it "probably" won't reach that goal. Much of the problem can be traced back to early Fiat franchise dealer openings. "We missed the whole first quarter," Soave told Bloomberg, referring to the fact that just 12 of the 130 planned dealerships were open to the public by the end of February.

In an effort to jumpstart sales, Fiat is rolling out a number of intensified marketing campaigns, which you can read more about here. On the plus side, the brand has some major plans in the works for the U.S. market, and at least the automaker is making good money on the 500s it has sold so far.

News Source: Bloomberg