Chrysler Needs $7 Billion -- Now
By Michelle Krebs December 2, 2008By Michelle Krebs
In keeping with its status as a private company, Chrysler submitted its viability plan that didn't provide nearly the detail that General Motors and Ford did in their hefty reports.
However, Chrysler's simple message came through loud and clear: the automaker is nearly broke and needs a government loan -- and needs it now. The automaker wants a $7-billion government loan by December 31. Otherwise, its liquidity could fall below the necessary levels to run the company through the first quarter.
Chrysler estimates by year end it will have only about $2.5 billion of cash on hand. And that's heading into the traditionally slowest sales months even in the best of years. The first quarter of 2009 is expected to be even slower than normal, Chrysler noted. At the same time, Chrysler expects its expenditures for the quarter to total $11.6 billion.
Chrysler, owned mostly by private equity firm Cerberus Capital Management, reiterated it is continuing to aggressively pursue strategic alliances and partnerships like the ones it has with Nissan and Volkswagen as well as some suppliers.
If it obtains the government loan and survives, Chrysler said it plans 24 major product launches through 2012, including a portfolio of hybrid electric vehicles.
Chrysler's report to the Senate Banking Committee, which is only 14 pages long compared with the nearly 40 pages each of the Ford and GM reports, spends a couple of pages arguing why Chapter 11 bankruptcy or even a prepackaged bankruptcy are not plausible.
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