Published: January 12, 2009 10:34 pm      

Chrysler starts seeking concessions

DETROIT -- Chrysler LLC will meet with many of its stakeholders over the next two weeks to seek concessions to meet the targets outlined in the automaker's recovery plan.

Chairman Robert Nardelli told reporters at the North American International Auto Show on Sunday that a range of concessions is being sought, but he would not be specific about the company's requests.

Chrysler received $4 billion from the government in emergency loans last month that require the automaker to dramatically restructure. Chrysler has until March 31 to show that it is making progress toward long-term viability or the money could be called back. The company is trying to trim costs in all aspects of its business.

Vice Chairman and President Jim Press said he is working with dealers "in terms of cost to help us husband our cash," rather than looking at the number of dealers.

Dealer consolidation is already occurring under the company's Genesis program to have dealers sell all three brands under one roof.

Advertising dollars will shift from national network spots specific to markets, products and months and the automaker is getting out of long-term contracts, Press said.

Vice Chairman and President Tom LaSorda said the company will "get into more active dialogue" with the United Auto Workers union next week.

"We need concessions from them, too," LaSorda said. "They know that." He said it would be easier to get concessions if Congress had identified a preferred wage rate instead of saying compensation had to match that of foreign-owned U.S. plants because wages vary by factory and region.

Parallel contract discussions will occur with the Canadian Auto Workers union in return for funding from the Canada and Ontario governments. LaSorda said he needs to see the terms from the two Canadian governments and will start discussions with them this week.

Leaders from the supply base also are being contacted for their input on how they can be part of the solution, LaSorda said.

In December, Chrysler shut down all of its plants for a month and some longer to save money and match production with demand. LaSorda said some plants will come back online Jan. 19, but others may remain idled. It will be a product by product decision, based on the market.Nardelli said Chrysler wants to make sure there is demand before starting the plants again.

Chrysler was also on the offensive Sunday as it rolled out five electric vehicles, including the surprise inclusion of the Chrysler 200C EV concept that hints at the styling of the next-generation D-segment or Sebring replacement, insisting that the company is very much alive.

"I think that should put to bed the notion that Chrysler is going away," Nardelli said.

Many from the company were still bristling from comments Saturday from Sean McAlinden, chief economist for the Center for Automotive Research, that the company was hibernating with its North American plants shut down and little product development going on.

"If this is hibernation, I hate to see it when we wake up," Nardelli said.

But it is a sentiment shared by many analysts including Aaron Bragman of IHS Global Insight in Troy.

"Product development is expensive, and they don't have it to spend right now," he said.

Chrysler executives said they will not be able to offer a full range of vehicles. "We can't be all things to all people," Nardelli said.

Development of electric vehicles -- with gasoline engines to charge the batteries for extended range -- for all three brands is a priority.

One will go on sale by the end of 2010 with three more to follow by 2012, said Lou Rhodes, head of the ENVI electric car division.

Moved down the priority list is a new D-segment car to replace the Sebring and Dodge Avenger, said Nardelli. Chrysler has yet to decide if it will eventually build new midsize sedans itself or rely on a partner like Nissan to engineer and build them, said product chief Frank Klegon.

"Timelines of that car have been adjusted," Nardelli said.

Chrysler also continues to identify non-earning assets and says there are potential buyers for the Viper brand. Nardelli said he wants it sold to someone who will preserve its heritage and continue to support the Viper enthusiast club. "It's not a fire sale," Nardelli said.