The Demo Site

So Hummer is going to China and Saturn allegedly has 16 interested buyers - but what about Saab? According to two top executives at the Swedish brand, GM has narrowed down talks with potential buyers of the brand to two.

“Now we are negotiating with just two parties,” Saab’s CEO, Jan-Ake Jonsson, said in an interview with Dagens Industri.

He said that final negotiations with either one of the two potential buyers could start as early as this week.

“This can go fast now and should absolutely be wrapped up in a maximum of two weeks,” said Jonsson.

So far, we have seen interest in Saab from Fiat, Koenigsegg and a U.S. financier, Ira Rennert and his Renco Group. Geely has denied reports of it bidding for the Swedish brand. How will win Saab at the end of this battle? Stay tuned to find out.

Source: Reuters

The state of Indiana has a big problem with Chrysler's bankruptcy proceedings. Indiana state treasurer Richard Mourdock explained that "Indiana retirees and Indiana taxpayers have suffered losses because of unprecedented and illegal acts of the federal government." The home of the Indianapolis 500 has $42 million worth of retirement funds invested in the Pentastar; less than 1% of the $6.9 billion in secured debt owed by Chrysler. Indiana's appeal of the Fiat sale officially puts any deal with the Italian automaker on hold until a resolution has been made.
Veteran bankruptcy judge Arthur Gonzalez couldn't disagree with Mr. Mourdock more, saying ""the Court finds that all relevant standards have been established to grant the relief requested." By "relief," Judge Gonzalez is likely talking about Fiat and its ability to take ownership of Chrysler.
Though $42 million doesn't buy a lot these days, the state has the right to fight the bankruptcy. Whether the midwestern state wins its case is another matter all together.The New York Court of Appeals hearing of the state of Indiana's objection to the Chrysler bankruptcy hearing is widely viewed as little more than a formality. Chrysler's bankruptcy has gone very smoothly thus far, and with the backing of plenty of rock-solid legal types in the White House, it is now looking more and more likely that Chrysler will indeed exit bankruptcy in around 60 days.
[Source: The Detroit Bureau]

PSA/Peugeot-Citroen incoming CEO Philippe Varin (left) and chairman Thierry Peugeot (right)

It's buddy-up time in the European auto industry, and French automaker PSA/Peugeot-Citroen does not want to be left all by itself. With Fiat gobbling up automakers large and small, and General Motors poised to sell off its European assets, the Peugeot family, which owns a controlling interest in parent company PSA, wants to pursue a merger. And towards that end, the family has stated its willingness to dilute its own interest in Europe's second-largest automaker.
Currently, the Peugeot family - headed by the normally reclusive Thierry Peugeot (above, right), chairman of the company's supervisory board - holds 30% of PSA's shares, and controls 45% of its voting rights. The Peugeots would be willing to give up some of its shares, as long as it remained the largest shareholder. The announcement came the day before the company's annual shareholders meeting, at which Philippe Varin (above, left) was presented as PSA's new chief executive to replace the ousted Christian Streiff.
[Source: Automotive News Europe - Sub. Req.]

Along with its rivals GM and Ford, Chrysler today announced its best retail sales month of 2009. The Auburn Hills automaker reported total sales of 79,010 units during the month of May, a 30 percent decline when compared to the same period a year ago.

Overall, sales for the Chrysler brand improved 32 percent over April while Dodge and Jeep increased 23 percent and 21 percent respectively.

Chrysler also announced new incentives for the month of June.

“Beginning June 2, Chrysler LLC is pleased to offer zero percent financing for 60 months through GMAC Financial Services on select 2009 model vehicles, or up to $4,000 Consumer Cash on 2009 model vehicles. In addition, current Chrysler LLC vehicle owners are eligible for $1000 Owner Loyalty cash on most 2008 and 2009 Chrysler, Jeep and Dodge vehicles. These offers are in addition to the $1000 Credit Union Bonus Cash on select products for qualified credit union members who finance their new vehicle purchase through a participating Credit Union under the Invest in America program. These incentives are valid through July 1, 2009.”

Yesterday,  the U.S. Bankruptcy Court approved the sale of the majority of Chrysler LLC’s assets to a new company, Chrysler Group LLC, which will be owned by Fiat SpA.

Separately, Chrysler hopes to reopen most of its facilities by the end of June. The decision on which plants will open will be made by Friday when Fiat takes control of Chrysler Group LLC.

__________

Press Release:

Chrysler LLC Posts Best Retail Month of the Year; Reports May 2009 Sales

* Chrysler LLC posts best retail sales month of 2009
* Chrysler, Dodge and Jeep brands post double-digit retail sales gains compared to previous month
* Jeep Wrangler sales continue upward trend increasing 4 percent year-over-year compared to May 2008
Auburn Hills, Mich., Jun 2, 2009 - Chrysler LLC today reported May U.S. total sales of 79,010 units, representing the best retail sales month of 2009 and a retail performance that was better than the industry average. Compared to May 2008, retail sales decreased 30 percent. During the month of May, Chrysler LLC did not produce any vehicles for fleet sales which resulted in a fleet sales reduction of 90 percent year-over-year for the same period.

“We are pleased that consumers responded to Chrysler’s reorganization by purchasing our products, resulting in our best retail sales month of the year,” said Jim Press, Vice Chairman and President - Chrysler LLC. “Overall our sales were above expectations during this month of transition.”

On June 1, the U.S. Bankruptcy Court approved the sale of the majority of Chrysler LLC’s assets to a new company, Chrysler Group LLC in alliance with Fiat S.p.A.

“The uncertainty that has been surrounding Chrysler for the last few months is coming to an end, and a vibrant, new company is beginning to take shape,” Press added. “One that will better serve our customers and dealers with a broader and more competitive lineup of environmentally friendly, fuel-efficient, high-quality vehicles.”

May Sales Highlights

* May was the best retail sales month of 2009, with 74,741 retail units sold.
* Chrysler’s retail market share is higher than May of last year and also stronger than last month
* Jeep Wrangler continued its strong upward sales trend for the fifth month in a row, with May retail sales up 4 percent year-over-year compared to May 2008 and up 8 percent compared to the previous month. Wrangler also increased its share of the segment for the fifth month in a row
* Chrysler brand retail sales improved 32 percent compared to the previous month
* Dodge brand retail sales increased 23 percent compared to the previous month
* Jeep brand retail sales were up 21 percent compared to April 2009

“May was a very encouraging retail month for Chrysler and the industry,” said Steven Landry, Executive Vice President North American Sales and Marketing, Service and Parts - Chrysler LLC. “Retail sales for the industry came in stronger than expected and our retail performance during our restructuring was even stronger than the industry, giving us improved share and optimism that the market is showing signs of life.”

Compared to the same time period in 2008, Chrysler LLC’s total sales decreased 47 percent. The Company finished the month with 260,407 units representing an 86 day supply. Inventory is down 37 percent compared with May 2008 when it totaled 412,009 units.

Product Redistribution
Chrysler is taking actions to assist in the redistribution of remaining eligible inventory of dealers who had their sales and service agreements rejected. The inventory from the rejected dealers will be matched with dealers who are moving forward with the new company and need to replenish their inventory or acquire inventory for additional brand lines they may add.

Late Sunday night, U.S. bankruptcy Judge Arthur Gonzalez approved the sale of Chrysler's remaining good assets to a group that includes the UAW VEBA health care trust, Fiat, and the U.S. and Canadian governments. The union will get a 68% stake, Fiat gets 20% and the governments split the rest. Gonzalez over-ruled virtually all objections to the deal on the grounds that the best chance of preserving any value in the assets was to move ahead with the sale. The only other viable alternative was liquidation, which would likely only bring a small fraction of the potential value in keeping the company alive.
Gonzalez cited the public interest as one of the reasons to move ahead with the sale. Because the billions of dollars in loans from the two governments, keeping the company alive it was decided that this course of action was the best opportunity for some repayment. Senior lenders will receive $2 billion, or about .29 cents on the dollar of the debt currently owed by Chrysler. Some 90 percent of the company's senior lenders were reportedly in support of the deal.
The "new" Chrysler will henceforth be known as Chrysler Group LLC.
[Source: Reuters]

Chrysler’s CEO Bob Nardelli said today that he expects the sale of the automaker’s assets to a new company to be completed by Friday. He said that regulatory approvals will be finalized and he will step down as the company’s CEO.

Nardelli said that he plans on returning to his former post at Cerberus Capital Management on Monday morning. Nardelli, who worked for Cerberus until July 2007, was asked to run Chrysler in August 2007.

He went onto explain that Chrysler’s financial troubles started late last year and put the company in a ”situation of not having enough liquidity to keep the doors open.”

He wrapped up his hearing saying that he favored keeping Chrysler independent, as opposed to the partnership with Fiat SpA.

Fiat will take a 35 percent share in Chrysler and will change the name of the new company to Chrysler Group LLC.

Source: Detroit News

General Motors is one step closer to filing for the largest bankruptcy ever for a U.S. industrial company after bond exchange offers failed. On the other hand, the sale of GM’s European brand Opel isn’t going so well either as German officials ended talks earlier today without reaching a deal.

The bidding war for Opel had narrowed down to a two-way race between Fiat SpA and Magna International. German officials were unable to reach a deal after 12 hours of talks stretching well into Thursday morning.

Ministers said that talks ended since the German government is unable to provide temporary financing if GM files for bankruptcy is the United States. Reports yesterday said that Fiat and Magna needed to improve their offers and assume greater risk by making commitments to reserve jobs and plants.

“We have made demands on the U.S. Treasury and expect answers by Friday and we will need these answers in order to agree a plan,” said Economy Minister Karl-Theodor zu Guttenberg. “We don’t have the security yet that we need to commit to bridge financing today.”

Source: Reuters

In an effort to show that it is serious about its bid, Fiat CEO Sergio Marchionne went to meet with Chancellor Angela Merkel earlier today to discuss Fiat’s proposal to buy General Motors’ Opel brand. Marchionne drove out of the chancellery in his black Fiat without talking to reporters. Merkel also made no public appearance.

It is reported that Economy Minister Karl Theodor zu Guttenberg also met with Marchionne. Guttenberg said yesterday that all three bidders for Opel - including Fiat, Magna International and RHJ International - need to improve their offers. He said they need to assume greater risk and make commitments to reserve jobs and plants.

“There’s no favorite,” Guttenberg told reporters. “Everyone knows that improvements are still necessary.”

Opel’s management, Germany’s government and other executives from General Motors will meet tomorrow to decided on the preferred bidder.

Fiat has made two bids for Opel; one with and one without an offer for GM’s Latin American operations.

Source: Reuters

Despite still being in bankruptcy court, Chrysler announced yesterday that it has submitted three proposals to the U.S. Department of Energy that outlines a $448 million plan to “rapidly bring” electric-vehicles and plug-in hybrids to the market.

The plan represents a 50/50 cost-share opportunity where Chrysler LLC and its partners (meaning Fiat SpA) will invest $224 million combined with a DOE matching that with the same number.

“If approved, Chrysler LLC plans to use funds to build a demonstration fleet of PHEVs and EVs, as well as create a new-vehicle electrification technology and manufacturing center located in Michigan.” Chrysler said in statement.

The Auburn Hills automaker said that it will use “as much as $83 million to build a new vehicle electrification technology and manufacturing center in Michigan.” That new facility will be responsible for development, testing, manufacturing electric-drive components and the final assembly of EVs and range-extended-vehicles. Chrysler says that the facility will be functional by 2010 and will produce more than 20,000 units per year.

Press Release:

Chrysler LLC Submits $448 Million Plan to the U.S. Department of Energy for the Rapid Development and Manufacturing of Electrified Vehicles

- Chrysler LLC submits three proposals, totaling $448 million, for two Department of Energy (DOE) initiatives aimed at rapid vehicle electrification - The Transportation Electrification Initiative and Electric Drive Vehicle Battery and Component Manufacturing Initiative
- The 50/50 cost-share opportunity demonstrates how Chrysler LLC, its partners and the DOE can work together to promote technological innovation and energy independence in the United States
- Proposed vehicles to include Dodge Ram 1500 Plug-in Hybrid-electric Vehicles (PHEV), Chrysler Town & Country PHEVs and Chrysler Town & Country Electric Vehicles (EV)

Auburn Hills, Mich., May 26, 2009 - Chrysler LLC today announced the company has submitted three proposals outlining a $448-million plan to the U.S. Department of Energy (DOE) in order to rapidly bring Electric Vehicles (EV) and Plug-in Hybrid-electric Vehicles (PHEV) to market.

Chrysler LLC applied for two initiatives established by the DOE-the Electric Drive Vehicle Battery and Component Manufacturing Initiative and the Transportation Electrification Initiative. Both are designed to speed up development, demonstration, evaluation and manufacturing of EVs and PHEVs. The programs represent a 50/50 cost-share opportunity with $224 million from Chrysler LLC and its partners, combined with a matching $224 million from the DOE. These funds will accelerate the market introduction and penetration of advanced powertrains.

“These initiatives represent how government and the automotive industry are answering the challenge of reaching common goals and demonstrate how rapidly this type of advanced technology can be brought to market in a collaborative environment,” said John Bozzella, Senior Vice President-External Affairs and Public Policy, Chrysler LLC. “Without U.S. innovation and production capacity, we will simply trade batteries for oil in the pursuit of transportation energy.”

If approved, Chrysler LLC plans to use funds to build a demonstration fleet of PHEVs and EVs, as well as create a new-vehicle electrification technology and manufacturing center located in Michigan. The proposal will enable the production of commercially viable products in a shorter time frame. Combined, Chrysler LLC’s proposal will stimulate the economy and help the company achieve its leadership goals in electrified-vehicle development and production.

The Transportation Electrification Initiative
Chrysler LLC’s $365-million submission for the Transportation Electrification Initiative intends to establish a nationwide demonstration fleet of more than 365 test-fleet vehicles for use by select customers and partners. The Chrysler Town & Country and Dodge Ram 1500 are popular models in their respective segments and as PHEVs can achieve substantial greenhouse-gas reduction. To ensure a robust assessment, Chrysler will demonstrate 100 Chrysler Town & Country PHEV minivans and 100 Dodge Ram PHEV pickup trucks across a range of drive cycles and consumer-usage patterns in diverse geographies and climates throughout the United States. The company has established more than a dozen partnerships with city and local governments, research and development authorities, utility companies and universities to test the PHEVs.

In addition, through a partnership between Chrysler LLC’s ENVI group and the U.S. Postal Service (USPS), Chrysler LLC will deliver 165 Chrysler Town & Country EV cargo minivans for daily mail service in four regions throughout the country. ENVI has created numerous partnerships with energy providers and utility companies in order to develop an electric-vehicle charging infrastructure that will efficiently service its electric-vehicle test fleet.

The Electric Drive Vehicle Battery and Component Manufacturing Initiative
Within the Electric Drive Vehicle Battery and Component Manufacturing Initiative, Chrysler LLC plans to use as much as $83 million to build a new vehicle electrification technology and manufacturing center in Michigan. This new facility would house development, testing and electric-drive component manufacturing in addition to final assembly of EVs and Range-extended Electric Vehicles (ReEVs). The complex would be functional by 2010 and produce more than 20,000 units per year.

“These proposals present a win-win situation for Chrysler and, most importantly, our customers,” said Frank Klegon-Executive Vice President, Product Development, Chrysler LLC. “This plan will accelerate our efforts to develop and manufacture electric and plug-in hybrid-electric vehicles, which will reduce the amount of time it will take to get these vehicles on the road.”

Chrysler LLC would utilize both DOE programs as first steps toward the commercialization of “no compromise” electrified vehicle technologies beyond Hybrid-electric Vehicle (HEV) applications currently on the road.

Last month, ENVI, Chrysler LLC’s in-house electric vehicle organization, made multiple announcements aimed at accelerating the market introduction of electric-drive vehicles. The company created a lithium-ion battery production partnership with U.S. based A123Systems and facilitated a new lithium-ion battery manufacturing plant in Southeastern Michigan-a joint program with A123Systems and the Michigan Economic Development Corporation. Chrysler also announced its plans to address the future needs of fleet customers, such as the U.S. Postal Service, with a pure-electric Chrysler Town & Country EV Cargo minivan.

Fiat said that it has lined up three financial institutions to help it create a group that will combine its majority stake in Chrysler with GM’s European and Latin American Operations. It was reported yesterday that Fiat submitted two bids for GM’s Opel brand, one that includes GM’s Latin American Operations and one that doesn’t.

“Intesa Sanpaolo, UniCredit Group and Goldman Sachs have been selected as global coordinators and will assist and guide Fiat in all the required operations in the months to come,” Fiat CEO Sergio Marchionne said in a statement.

Fiat said that it plans to put all of these new operations into a new company that would be listed and traded on the European stock exchange.

The company, seeing as everything goes to plan and GM sells Opel and its Latin Operation, would create the world’s largest auto group with sales of 6 million vehicles annually and revenues that would exceed $100 billion.

Source: Detroit News

The 2009 World Car of the Year competition is back for its fifth run, and the jurors have determined their ten, no, 11 finalists. The WCotY is determined by the votes of over 50 journalists from countries the world over (none of which works for Autoblog). Some of the finalists include the award-hoarding Nissan GT-R and Jaguar XF, plus strong entries like the Ford Fiesta, Fiat 500, and Audi A4. Due to a tie for 10th place, there are 11 finalists this year. Judges will next narrow their choice to the top three vehicles by March 9, and the winner will be announced at the New York Auto Show on April 9. Hit the jump to view the the WCotY finalists, along with a short press release.
[Source: World Car of the Year]

As reported yesterday, Fiat has confirmed that it has submitted a bid to buy General Motors Opel and Vauxhall brands. Sources familiar with the matter said today that Fiat submitted two bids, one with and one without an offer for GM’s Latin American operations.

Speaking to Automotive News Europe, sources said that Fiat also wants Saab but did not include its offer for the Swedish brand in the bid for Opel since its sale is a separate process.

Fiat declined to comment how much it offered for Opel and Vauxhall.

Magna International and investment group RHJ International have also submitted a bid for Opel

For the record - Sergio Marchionne lied to all of us. Earlier this month, the Fiat CEO said that he will become CEO of Chrysler after it emerges from bankruptcy in 60 days. Well, that wasn’t true.

Chrysler officially announced today that C. Robert Kidder, former Chairman of Borden Chemical Inc. and Duracell International Inc., will become Chairman and CEO of Chrysler LLC once it completes its global alliance with Fiat SpA. He will replace current CEO Bob (Robert) Nardelli.

“I am pleased to join Chrysler at a time when Chrysler is poised to launch an exciting new era,” said Kidder. “I am confident that Chrysler will emerge from Chapter 11 a lean and powerful competitor, combining its own rich history of innovation with Fiat’s technology and expertise to invigorate the American car market and to challenge other car companies around the globe.”

Shall we call him Bob Kidder?

Click through for the official statement from Chrysler.

Press Release:

C. Robert Kidder to Become Chairman of Chrysler Group LLC

Auburn Hills, Mich., May 20, 2009 - Chrysler LLC today announced that C. Robert Kidder, former Chairman of Borden Chemical Inc. and of Duracell International Inc., will become Chairman of Chrysler Group LLC, once it completes its acquisition of the operating assets of Chrysler LLC and completes a global alliance with Fiat SpA. He will succeed Robert L. Nardelli.

“We are most fortunate that Bob Kidder will lead the new company through its transformation,” said Nardelli. “My number one priority has been to preserve Chrysler and the livelihoods of thousands of people who depend on its success. With his broad expertise serving on numerous world-class boards and his accomplished business background, Bob will provide the leadership and strategic counsel that will help to create a strong global competitor moving forward.”

With more than 40 years of experience, Kidder currently serves on the boards of Morgan Stanley, where he is the lead director, Schering-Plough Corporation, and Microvi Biotech Inc. He previously has served as Chairman and Chief Executive Officer of both Duracell International Inc. and Borden Chemical Inc. and as director of such companies as Electronic Data Systems Corporation and General Signal Corporation. During his tenure with McKinsey and Co. Inc., Bob worked with a major OEM client in the automotive industry. Bob currently is Chairman and CEO of 3Stone Advisors LLC, an investment firm that focuses on clean-tech companies. He holds an M.S., Industrial Economics from Iowa State University and a B.S., Industrial Engineering from the University of Michigan. He resides with his family in Columbus, Ohio.

“I am pleased to join Chrysler at a time when Chrysler is poised to launch an exciting new era,” said Kidder. “I am confident that Chrysler will emerge from Chapter 11 a lean and powerful competitor, combining its own rich history of innovation with Fiat’s technology and expertise to invigorate the American car market and to challenge other car companies around the globe.”

Chrysler LLC announced on April 30, 2009, that, as a result of the comprehensive restructuring plan agreed to by many of its stakeholders, it had reached an agreement in principle to establish a global strategic alliance with Fiat to form a vibrant new company.

On the same day, Chrysler LLC and 24 of its wholly-owned U.S. subsidiaries also filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the Southern District of New York. Chrysler also filed a motion under Section 363 of the Bankruptcy Code requesting the swift approval by the Court of the agreement with Fiat and the sale of Chrysler’s principal assets to the new company. The benefit of this type of filing is speed. It will allow a leaner new company to emerge in less than 60 days from the time of filing, well positioned for long-term viability.

Nardelli, Chrysler’s Chairman and CEO since August 2007, announced on April 30 his plan to leave the company following the completion of the transactions. He will return to Cerberus Capital Management LP as an advisor. He said that it was “an appropriate time to let others take the lead in the transformation of Chrysler with Fiat, and I will work closely with all of our stakeholders to see that this new company swiftly emerges with a successful closing of the alliance.”

As stated in the terms of agreement, upon successful completion of the alliance, a board of directors for the new company will be appointed. The majority of the directors will be independent (not employees of Chrysler or Fiat). The board will select a CEO with Fiat’s concurrence.

At a recent roundtable with reporters, Chrysler president Jim Press was quizzed about the nonbinding potential deal with Fiat Auto. Here’s a lowdown on what Press said about the likelihood of the tie-up becoming official and the implications for Chrysler LLC.

On the chances of the deal scuttling partnerships with Nissan and VW—over a Versa-based small car and a Ram-based pickup, and the Routan minivan—and nixing any future deals with other automakers:

“We are always open to new partnerships, and the Fiat deal doesn’t preclude them, but we are not talking with anyone else at the moment. We can’t speculate on what restrictions would be in place if the deal was done. We will still produce our own cars. Fiat is essentially giving us billions of dollars’ worth in platforms and engines and technology, and they have a wider and better range of A-, B-, and C-segment cars than anyone in North America. They get access to our distribution network and our dealers are able to fill in the part of the portfolio we don’t have [small, fuel-efficient cars], plus we have access to their export distribution, which helps with Jeep and minivans. It’s like a hand-in-glove fit for both of us. We can go from viability to prosperity as a global powerhouse.”

Our take on this is simple: Fiat gives Chrysler the small car platforms it needs, although Press is wrong about the quality of the Fiat platforms. Ford, for instance, has a more impressive range of B- to C-segment cars in Europe, from the Fiesta through the Mondeo, than Fiat, which is traditionally weak at the larger end of this spectrum. As to whether Fiat and Chrysler will be a global powerhouse, time will tell. It looks more like this deal may be the only way that two relatively small players can survive in the short-to-medium term.

The proposed alliance between Chrysler and Fiat Group will reportedly see seven new vehicles introduced to the U.S. market, with most of the cars expected to be produced at idle Chrysler plants across North America. According to sources that have seen the product-sharing agreement, several of the vehicles will be sold through select Chrysler, Dodge and Jeep dealerships. The plan includes vehicles on four Fiat platforms, with models planned for the minicar, or A-segment, right though to the midsized D-segment.

Just as Chrysler and Nissan plan to keep their previous platform and product sharing deals now that the American carmaker is on the verge of an alliance with Fiat Group, the Italian giant is likely to keep its own dealings with BMW alive as well. Fiat and BMW announced a tentative alliance in July of last year, revealing that the two carmakers were considering the possibility of co-operation in the areas of components and architectures for their Mini and Alfa Romeo vehicles. Fiat is now expected to make a new announcement about a future cooperation with BMW, reports Car and Driver.