Chrysler Won't Survive; Sell It, Advises Ex-Chrysler Exec
February 12, 2008

Chrysler LLC won't survive on its own and its private-equity owners should sell the company to a foreign automaker, Dow Jones reports a former finance chief of the automaker.

"Step A is that Cerberus Capital Management should do everything they can to fix it, and step B is that they should sell it to a foreign automaker that has strong market share in emerging markets," said Jerry York, who was Chrysler's chief financial officer between 1990 and 1993. He now serves as a representative of billionaire investor Kirk Kerkorian.

Chrysler is already in the midst of cutting as many as 10,000 hourly jobs to adjust its production to the slumping demand in the North American market, which accounts for the majority of its sales. Chief Executive Officer Robert Nardelli said the company lost $1.6 billion last year.

Chrysler executives also told dealers at their recent convention it could cut its number of models by as much as half and reduce the number of dealerships selling its cars by as much as a third in an effort to boost efficiency.

Snow said Cerberus, a private-equity firm, and Chrysler management are working to change the way the automaker operates, building on strengths and changing quickly what doesn't work.

Improving relations with dealers, which he said has already started, and reducing the number of dealers is a key part of that. Snow's speech came just ahead of the National Automobile Dealers Association convention in San Francisco.

York said he still wasn't convinced.

"Most of Chrysler's volume is in the U.S., which is a mature market that is using dog-eat-dog incentives (to sell cars)," York said. "Their styling is way off, and they are not connecting with the customer."

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