Wednesday, March 29, 2023
Tuesday, May 06, 2014
Fiat Chrysler To Outline 5-Year Strategic Plan
by Tracy Samilton
May 06, 2014 4:33 AM ET
from
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Morning Edition
3 min 36 sec
The automaker reached most of the last targets which were set shortly after Fiat took over Chrysler in 2009. Fiat Chrysler's CEO will again answer questions about the company's long-term viability.
Source
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Friday, January 03, 2014
Fiat to buy full control of Chrysler
By Mark M. Meinero @MMMCNNMoney January 2, 2014: 7:02 AM ET
Fiat has agreed to purchase remaining shares in Chrysler for $3.65 billion.
NEW YORK (CNNMoney)
U.S. automaker Chrysler will become fully owned by Italy's Fiat under terms of an agreement announced Wednesday that also involves the United Auto Workers union.
The agreement comes more than 4-1/2 years after the Obama administration brought Fiat in to keep Chrysler in business as part of a packaged bankruptcy proceeding.
In a statement, Fiat said it has agreed to pay $3.65 billion for the 41.46% of Chrysler it doesn't already own from the UAW's medical benefits trust for retirees.
Fiat shares gained nearly 13% in Milan early Thursday to trade at €6.70, their highest level since July 2011.
In addition to the deal, Chrysler will contribute $700 million to the benefits trust over a 4-year period. For its part, the UAW has agreed to support the automaker's plans to roll out vehicles and will drop a Delaware court proceeding over options exercised by Fiat in the acquisition of Chrysler.
Related: 2013: The year in cars
"The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization that will ensure all employees a challenging and rewarding environment," said Sergio Marchionne, CEO of both Fiat and Chrysler.
The full takeover of Chrysler by Fiat means it will not have to go ahead with plans for aninitial public offering of Chrysler stock, which had been set to take place in the first three months of 2014.
Monday, December 19, 2011
Bible solution to U.S. and European debt crisis
Deuteronomy
- At the end of every seven years thou shalt make a release.
- And this is the manner of the release: Every creditor that lendeth ought unto his neighbour shall release it; he shall not exact it of his neighbour, or of his brother; because it is called the LORD’s release.
- Of a foreigner thou mayest exact it again: but that which is thine with thy brother thine hand shall release;
- Save when there shall be no poor among you; for the LORD shall greatly bless thee in the land which the LORD thy God giveth thee for an inheritance to possess it:
- Only if thou carefully hearken unto the voice of the LORD thy God, to observe to do all these commandments which I command thee this day.
- For the LORD thy God blesseth thee, as he promised thee: and thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt reign over many nations, but they shall not reign over thee.
- The Hebrew word for money is “keceph”, which when translated means “silver.”
- The King James Bible mentions gold 417 times, silver 320 times, and money, which is mentioned 140 times, refers only to physical silver and gold. A paper currency is never mentioned.
- Gold and silver are mentioned all through the bible as real wealth, even through the end of Revelation.
- From Genesis to Revelation, gold and silver are the only monetary assets that will maintain their purchasing power until judgement day.
Source
Wednesday, June 10, 2009
Swift Overhaul Moves Ahead as Fiat Acquires Chrysler Assets
Matthew Staver/Bloomberg News
Juaquin Rornia carrying out equipment from a closed Chrysler dealership in Castle Rock, Colo. More Photos »
By MICHAEL J. de la MERCED and MICHELINE MAYNARD
Published: June 10, 2009
With the touch of pen to paper and a simple wire transfer, Chrysler completed its deal with Fiat on Wednesday morning, largely ending its quick trip through bankruptcy.
The last obstacle to an exit — a temporary stay imposed by the Supreme Court — was lifted late Tuesday, after the nine justices declined to hear a challenge of the deal by three Indiana state funds and several consumer groups.
The wire transfer, from the federal government, gives Chrysler $6.6 billion in exit financing.
A two-page order from the Supreme Court made it clear that it was not ruling on the merits of the Indiana funds’ case. But the justices wrote that the funds, which represent teachers and police officers, “have not carried the burden” of proving that the Supreme Court needed to intervene.
After more than a month of sometimes dramatic court hearings, Chrysler sold the bulk of its assets to Fiat in almost anticlimactic fashion: in the offices of the Cadwalader, Wickersham & Taft, the law firm that is advising the Treasury Department’s auto task force. The sale was completed at about 9 a.m.
“This morning’s closing represents a proud moment in Chrysler’s storied history,” a Treasury official said. “The Chrysler-Fiat alliance has now exited the bankruptcy process and is poised to emerge as a competitive, viable automaker.”
The speed with which Chrysler’s restructuring plan swept through the court system was an important victory for the Obama administration, which is seeking to remake the American auto industry after years of declining sales. When Chrysler filed for bankruptcy on April 30, President Obama promised its restructuring would be “efficient” and “controlled.” Company and government officials repeatedly exhorted the courts to approve the restructuring swiftly, citing the $100 million a day that Chrysler was consuming as it idled its plants and paid other overhead costs.
Chrysler was openly acknowledged as a test case for General Motors, a far larger and more complex company only in the early stages of its bankruptcy case.
As envisioned by Chrysler, Fiat and the government, Wednesday’s sale will create a new carmaker freed from old Chrysler’s crushing labor costs and debt levels. It will have gained in Fiat, which will run the company, a partner skilled in making and selling small, fuel-efficient cars around the world.
Under the plan, the carmaker would emerge from bankruptcy with a union retiree trust owning 55 percent, Fiat owning a 20 percent share that could eventually grow to 35 percent, and the United States and Canadian governments holding minority stakes.
But the hardest part for Chrysler begins now. Stung by the recession, Americans have shown relatively little appetite for buying new cars.
Chrysler has been hit hardest among the three Detroit companies by the slump which began last year and which has resulted in the worst sales in more than a quarter century.
Through May, Chrysler sales were down 46.3 percent, and it held just 10 percent of the car and truck market, down from nearly 15 percent a few years ago. It ranks only fifth in the American market, behind G.M., Toyota, Ford and Honda.
Chrysler employees, who were once considered among the industry’s most energetic and innovative, now face the prospect of adjusting to their third set of owners in less than two years. In recent weeks, teams from Fiat have been going over the company’s operations in Auburn Hills, Mich., much as teams from Cerberus Capital Management did in 2007, when the investment group bought the company from DaimlerChrysler.
Likewise, employees can expect new management at Chrysler, much as Cerberus brought in Robert L. Nardelli, the former Home Depot chief executive, and James Press from Toyota’s American operations. Sergio Marchionne, the chief executive of Fiat, has said he would run Chrysler, but he, too, is likely to bring in some managers.
The impact on Chrysler’s lineup will take longer to be felt. Chrysler, more than any other American player, depends heavily on Jeeps, minivans and pickups as the bulk of its lineup, even after gas prices rose above $4 last year. Small Fiats are expected to be sold at Chrysler dealers, such as the Fiat 500, the latest version of the perennial Italian favorite. But it could take months or years to adapt them to emissions and safety requirements in the United States.
For the moment, Chrysler dealers will have to rely on many of the same vehicles sold by Chrysler before it entered bankruptcy. And there will be far fewer of those dealers: hundreds closed Tuesday night, and their cars and trucks will be redistributed among remaining showrooms.
Source: http://www.nytimes.com/2009/06/11/business/global/11chrysler.html?_r=1&hp
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P.S. It's a sign of the times for those that have eyes to see; The shelves stripped bare and the last remaining vestiges of the U.S. Manufacturing prowess boldly transferred to the Revived Roman Empire. It wasn't enough to ship all factories, plants, industries to Asia; Now the service jobs are also fleeing to Asia, and the rest of the Third World;
Enjoy the upcoming Independence Day with a Global perspective.
They need the jobs; We have beef, swine and barbecues!
Enjoy your baby back ribs, and pig feet*! * Chief Justice SoniaPlease see previous post of 6/09/09 on supreme court approves Chrysler gift to Fiat:
"Supreme Court Clears Way for Sale of Chrysler to Fiat"
Arsenio.
Tuesday, June 09, 2009
U.S. Supreme Court Clears Way for Sale of Chrysler to Fiat
The United States Supreme Court declined Tuesday evening tohear a challenge to the Chrysler bankruptcy settlement, a dayafter Justice Ruth Bader Ginsberg had granted a stay in thecase. The ruling was a setback to a group of dissidentbondholders and will clear the way for the sale of Chrysler'skey assets to a group led by Fiat.
Fiat group also owns important editorial brands, like La Stampa (created in 1926 for the famous newspaper), Itedi, and Italiana Edizioni. Some national and local newspapers are owned or otherwise controlled by the different companies. A specialised advertising space reseller is Publikompass, supported by the Consorzio Fiat Media Center.
In April and May 2009, the possibility of a take over of GM Europe, a subsidury of General Motors, was being discussed between the two companies. GM Europe owns Opel/Vauxhall and Saab, and, if the deal is successful, will make Fiat the second largest automobile manufacturer in the world, behind Toyota.
On May 30th, 2009, German officials named [Magna] International, an Austro-Canadian car parts manufacturer, to take over Opel. The Opel/Vauxhall partnership is the largest of GM Europe's operations.[21]
On 20 January 2009, Fiat S.p.A. and Chrysler LLC announced that they were going to form a global alliance. Under the terms of the agreement, Fiat would take a 35% stake in Chrysler and gain access to its North American dealer network in exchange for providing Chrysler with the platform to build smaller, more fuel-efficient vehicles in the US and reciprocal access to Fiat's global distribution network.[25][26]
The new equity holder would have the option of increasing that to as much as 55%. Fiat, the stronger of the two, would not immediately put cash into Chrysler. Instead it would obtain its stake mainly in exchange for covering the cost of retooling a Chrysler plant to produce one or more Fiat models to be sold in the U.S. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars.
In 2006, he was nominated to be a ""Cavaliere del Lavoro" by Italian President Giorgio Napolitano.[1]
Marchionne, together with Fiat Group Chairman Luca Cordero di Montezemolo, returned Fiat's automobile division (Fiat Group Automobiles S.p.A.) to profitability in 2006.[4] Together, they have been widely credited with the turnaround of the group into one of the fastest growing companies in the auto industry.[5]
Marchionne has stated he is on "the list" for one of the limited run of 500 Alfa Romeo 8C Competizione.[6]
He began his professional career in Canada. From 1983 to 1985 he worked as a chartered accountant and tax specialist for Deloitte & Touche. From 1985 to 1988 he was Group Controller and then Director of Corporate Development at the Lawson Mardon Group in Toronto. In 1989 he moved to Glenex Industries where he worked for two years as Executive Vice President.
He attended Rockford Auburn High School in Rockford, Illinois and received his Bachelor of Science in business from Western Illinois University in Macomb, where he was a member of the Tau Kappa Epsilon fraternity. Nardelli also earned an MBA from the University of Louisville.
Nardelli became CEO of Home Depot in December 2000, despite having no retail experience. Using the Six Sigma management strategy also used at GE, he dramatically overhauled the company and replaced its freewheeling entrepreneurial culture. He changed the decentralized management structure, by eliminating and consolidating division executives. He also installed processes and streamlined operations, most notably implementing a computerized automated inventory system and centralizing supply orders at the Atlanta headquarters.
Nardelli was credited with doubling the sales of the chain and improving its competitive position. Revenue increased from $40.57 billion in 2000 to $85.15 billion in 2005, while profit rose from $12.6 billion to $25.8 billion. While this was a slower rate of growth than Home Depot had previously experienced (the company doubled in size every 4 years from 1979 to 2001), it must be noted that the high growth rates were largely due to rapid expansion.[citation needed] As the company was reaching its retail limit in the U.S., Nardelli was brought in to shepherd its transition into a mature business.[citation needed]
Some have criticized him for not maintaining the growth that the company had previously experienced, pointing to his huge salary as a sign that he was actually supposed to bring innovation to the company in order to help it maintain its historical growth. During Nardelli's tenure, Home Depot stock was essentially steady while competitor Lowe's stock doubled, which along with his $240 million compensation eventually earned the ire of investors.[2] His blunt, critical and autocratic management style turned off employees and the public. While the board strongly stood by him for most of his tenure, questions about his leadership mounted in 2006, and in an ominous portent of the near future, he was the only director present at the annual meeting; he only allowed shareholders to speak for a minute each.[3] When the board reportedly ousted him in January 2007,[4] Nardelli's severance package was estimated at $210 million. He was succeeded by The Home Depot vice chairman and executive vice president, Frank Blake. Blake had served as Nardelli's deputy at both GE Power Systems and Home Depot.
During his tenure at Home Depot, Nardelli met President George W. Bush at the White House in 2002 and was appointed to Bush's Council on Service and Civic Participation (although he is no longer a member).[5] Nardelli also hosted a garden reception/fundraiser for Bush at his Atlanta home on May 20, 2004[6]
Coca-Cola
While CEO of Home Depot, Nardelli was also briefly on the Board of Directors for Coca-Cola, starting in 2001.
On August 5, 2007, he became chairman and CEO of the newly privatized Chrysler. His current annual salary at Chrysler is $1, with other compensation not publicly disclosed.[7]
On February 17, 2008, before his first Daytona 500 race as Chrysler CEO, Nardelli guaranteed that Dodge would win the race for the first time since 2002, and that he would award a $1 million bonus to the Dodge team that did it. Ryan Newman, the driver of the #12 Alltel Dodge, fulfilled this promise, and his car owner Roger Penske collected the $1 million bounty.[8]
On December 4, 2008, in an appearance on CNN's Situation Room with Wolf Blitzer, when asked "So what do you say about the argument that the Japanese, the Germans, Koreans make better cars than the Americans?" Nardelli responded, "We spent about half a billion dollars in the first several months. Our warranty costs are down 29%. It's an interesting comparison because in the hearing today, going around the panel, the majority of the Senators said that citing specific vehicles that they own that they've got 60, 70, 80,000 miles. The comment was you guys are making them too good and therefore, we're not buying vehicles and we're contributing to your problem. That was from the Senators on the committee today. On April 30, 2009 Bob Nardelli announced that he would leave the company as soon as the bankruptcy was over."[9]
On March 17, 2009, Nardelli said that Chrysler Financial would require a second round of loans.[10] On April 21, 2009, it was revealed that a $750 million loan from the government was turned down, on the grounds that it would have required that executive compensation be capped.[11] On April 30, 2009, Chrysler filed for Chapter 11 bankruptcy, and it was announced that Nardelli's replacement (Sergio Marchionne [12]) would likely face a pay cap.[13]
Wednesday, May 06, 2009
The Impact Of Chrysler's Bankruptcy
Doctor Doom
The Impact Of Chrysler's Bankruptcy
Nouriel Roubini, 05.07.09, 12:01 AM EDT
Lessons for GM--and for the rest of us.
On April 30, Chrysler filed for Chapter 11 bankruptcy protection from its current creditors. As such, Chrysler will be able to operate as a going concern, while the company renegotiates its debt structure and other obligations. The U.S. government has described Chrysler's action as a "prepackaged surgical bankruptcy," through which it hopes the company will be able to exit the bankruptcy process within 30 to 60 days.
If Chrysler achieves this, it will emerge with a new global partnership with the Italy-based Fiat ( FIA - news - people ). Instead of cash, Fiat will provide the equivalent of billions of dollars in research- and investment-related (R&D) investments for a 35% stake in the new Chrysler. However, many experts think a quick trip into (and out of) bankruptcy might be unrealistic.
In the administration's view, cost cuts--implemented by Cerberus and the new management brought in by Bob Nardelli, who cut into Chrysler's R&D budget and new product development--left Chrysler, the smallest of the Detroit automakers, with a very thin line up of new vehicles.
The Obama administration set partnering with Fiat as a precondition for any further government assistance. Nevertheless, Chrysler was unable to avoid the bankruptcy process, because some creditors balked at the terms being offered in the proposed debt-to-equity swap by the government.
Fiat is vying to get a 35% stake in Chrysler without paying anything for it. What it brings to the table is billions of dollars in R&D that have positioned it well to produce new cars in the future.
Fiat exited the U.S. market decades ago. The marriage between Fiat and Chrysler is based on harsh realities, as evidenced by continuing layoffs in Chrysler's bloated U.S. and Canadian operations, but it seems to be a symbiotic relationship, aimed to help both car makers survive the new tests of an even more competitive landscape. Moreover, it is a reflection of the considerable overcapacities in the global auto sector which may require further consolidation in several national and international markets.
The short-term outcome of Chrysler's bankruptcy filing may come to determine the path for General Motors ( GM - news - people ), if not the entire U.S. auto industry. If bankruptcy proceedings for Chrysler go as the company and the U.S. government have planned, Chrysler's filing may very well turn out to be just a test case before the bankruptcy filing of GM itself.
GM has until the end of May to convince the government it has a viable business plan for restructuring outside a Chapter 11 reorganization. If it fails to renegotiate its debt and convince its current creditors to undergo a debt-for-equity swap--as Chrysler failed to do--then GM will have no option but to file for Chapter 11 protection.
GM's new chief executive, Fritz Henderson, has vowed to do whatever is reasonably necessary to prevent the automaker from going under, including seeking loan packages from U.S., Canadian and European governments (particularly Germany). But GM can no longer afford its extensive European operations and is in the process of looking for bidders.
The significant roles the auto sector plays in employment, exports and industrial production have heightened the political importance of responding to their vulnerabilities, which have been exacerbated by the credit crunch, prompting rescue packages including bridge loans, incentives to purchase domestic vehicles and increases in tariffs on imported cars and auto parts. In the face of rising unemployment in other sectors, governments hope to avoid any disorderly bankruptcy proceedings.
Furthermore, the Chrysler-Fiat merger could set off a chain of consolidations within the auto sector, which continues to have significant production overcapacities. Even emerging economies are likely to contribute slower auto demand growth in coming years. In Russia, automakers, including Toyota ( TM - news - people ), have repeatedly shuttered production, and domestic automakers are now increasing car loans in order to encourage purchases.
Other countries, such as China, also face the near-term challenge of consolidating their many automakers into several companies large enough to take advantage of economies of scale, increasing their share of the domestic market, and possibly expanding abroad.
Fiat is also trying to position itself to obtain an ownership stake in GM's European affiliate, Opel. The plan, which includes the other GM subsidiaries in Europe--Vauxhall in Britain and Saab in Sweden, would create a new global auto company with annual sales of up to 7 million cars and 80 billion euros (106 billion U.S. dollars) in revenues, which would secure Fiat a winning position in the post-crisis market.
The move, however, is likely to face political hurdles, as neither the German nor Italian governments would like to deal with the job losses (an estimated 8,000 to 9,000 jobs) likely from such a merger, particularly not in an election year (Germans vote this fall).
According to press reports, Berlin issued a list of conditions for Fiat, which includes stating where the headquarters would be located, where the taxes would be paid, the number of expected job losses and the future of Opel plants in Germany. GM, though, has the final say in assessing Fiat's offer. Yet the German economic minister suggested Fiat needs German state credits in lieu of adequate financing, which might increase German government leverage. However, supporting the formation of a global car maker with the German government's credit guarantees may enrage other German car makers, such as the VW Group, BMW and Mercedes-Benz.
The pressure on domestic jobs has increased the political importance of responding to the automakers' woes in many countries. In February, France raised protectionist fears after introducing state aid for the domestic car makers in return for an unwritten pledge to keep jobs and production at home. It posed a test for the EU's single-market rules and triggered an angry response from the Eastern European countries that would be hurt the most by the measure. Other countries, like Argentina and Russia, have increased restrictions on auto or parts imports in an attempt to support domestic industries. These might actually have the opposite effect--those in Russia hurt the business of used-car sellers.
But some government attempts to stoke auto demand may well erode future demand. So-called "cash-for-clunkers" deals--in which governments provide incentives for consumers to trade in their old cars for new (and often more fuel-efficient) ones--have had the desired effect, boosting auto sales in countries like Germany and China for the types of cars targeted.
These measures are helping to erode the inventory of manufacturers in a relatively orderly manner, but may be deferring the adjustment process the automakers will later face. Moreover, rising unemployment is likely to weigh on consumption, especially for large, credit-dependent purchases like cars.
The bankruptcy also has significant repercussions on the corporate bond market. Chrysler's bankruptcy filing was preceded by tough negotiations among creditors and the government to conclude an out-of-court restructuring in which lenders would receive 29 cents on the dollar in cash in exchange for wiping out about $6.9 billion of Chrysler's debt.
A group of about 20 secured creditors refused to sign off on the deal, arguing that their stakes were worth more and demanding that their seniority rights be observed. However, recent empirical evidence shows that as default rates increase, recovery rates are falling fast in this cycle. Moody's ( MCO - news - people ) reported that in the past seven months, completed CDS auctions resulted in a recovery rate of 30 cents on the dollar for loans and about 15 cents on the dollar for bonds, compared with 85 cents and 70 cents on the dollar, respectively, for all of 2008.
The latest research by Edward Altman yields similar results, stressing that distressed exchanges to avoid bankruptcy have surged since 2008, and that they usually yield significantly higher recovery rates to participating bondholders. In fact, S&P warns that, due to loose covenants and missing early-warning triggers, the losses even for secured creditors in this cycle might turn out to be substantial if a company cannot reorganize and liquidate.
Henry Hu of Texas University points to the "empty creditor" phenomenon to explain why some lenders prefer to hold out and force a bankruptcy seemingly against the company's--and thus their own--best interests. In short, creditors with enough credit default swaps may simultaneously have control rights and incentives to cause the debtor firm's value to fall. And if bankruptcy occurs, the empty creditor may undermine proper reorganization, especially if his interests (or non-interests) are not fully disclosed to the bankruptcy court.
But are credit markets finally thawing? Indeed, corporate bond issuance has picked up substantially since December, especially in the high-yield segment amid tighter spreads since the immediate Lehman aftermath. On a more cautious note, the IMF notes that, given shortening credit lines and still tight bank lending standards (confirmed in the April Bank Loan Officer Survey), corporations are taking advantage of this window of opportunity to refinance themselves in the bond market, despite substantially higher costs.
An additional factor fueling this front-loaded corporate bond activity is the likely future crowding-out by sovereign and government guaranteed debt. While the high-yield segment has returned 17.4% year-to-date in 2009, the fates of Chrysler and GM show the default rate may not yet have reached its peak.
Nouriel Roubini, a professor at New York University's Stern Business School and chairman of Roubini Global Economics, is a weekly columnist for Forbes. Analysts at Roubini Global Economics assisted in the research and writing of this piece.
Source:http://www.forbes.com/2009/05/06/chrysler-gm-fiat-bankruptcy-opinions-columnists-nouriel-roubini.html
P.S.My question to Professor Roubini is why is the White House micro-managing and giving it's blessing to this Fiat-Chrysler consolidation?
I pose that question to anyone: Why is there such an obssession with a merger with a foreign company, of the Italian persuasion?
Che Fai?
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