Chrysler says it can survive as a stand-alone company and can do even better in a partnership with Fiat, which would bring $8 billion to $10 billion in benefits. "This is equal to or greater than the total amount of loans we have requested from the U.S. government," said CEO Bob Nardelli, in an email to employees on Monday. The benefits include synergies, worldwide distribution and three to five years in development time savings. "We would be able offer our dealers exciting new products to help support their business," he wrote.
President Barack Obama's automotive task force is focused on solving the auto industry's problems outside of bankruptcy and will likely continue to provide funding to Chrysler and General Motors ( GM) past the March 31 deadline specified in loan deals, task force adviser Steven Rattner said Monday, in an interview with the Detroit Free Press. In talks with the task force, Nardelli said, "we have continued to emphasize that Chrysler is a viable business on a stand-alone basis," albeit one that would like to have a $5 billion federal loan in addition to the $4 billion it has already received. Nardelli said Chrysler acted early, starting in November 2007, to restructure, reducing current expense requirements. For instance, he said, Chrysler has lower inventory levels than Ford ( F) or GM. In addition, he said, Chrysler has a conservative view of vehicle sales, anticipating sales of just 10.1 million vehicles in 2009, rising to 12.6 million in 2014. Nevertheless, he wrote, "based upon the EBITDA projects and an improved net debt position, the company is well-positioned for long-term viability, including 24 product launches over the next 48 months" and repayment of government loans starting in 2012.