An Open Letter From Bob Nardelli
To Chrysler employees and other stakeholders:
We have received news that U.S. Treasury Secretary Henry Paulson willprovide $4 billion of initial funding to Chrysler LLC from the TARP(Troubled Assets Relief Program) as a loan to help bridge the currentfinancial crisis. We appreciate the Administration's confidence inChrysler.
As outlined in our submission to Congress, we intend to be accountablefor this loan, including meeting the specific requirements set forthby the government, and will continue to implement our plan forlong-term viability. The receipt of this loan means Chrysler cancontinue to pursue its vision to build the fuel-efficient,high-quality cars and trucks people want to buy, will enjoy drivingand will want to buy again.
For Chrysler to succeed in its mission to return to profitability, weneed the continued support of our many business partners. Termsassociated with the bridge loan include Chrysler's commitment to workwith key constituents â including our owners, lenders, suppliers,dealers, management and employees â to identify and achieve thecost-savings concessions we need to build a long-term viableenterprise. These concessions discussions will happen quickly, as afull governmental review and approval of our plan is expected by March31, 2009.
We are meeting with our suppliers, mindful that they are going througha difficult period as well. But we must cooperatively find ways tofurther reduce our costs while maintaining normal operations. We willask our suppliers to maintain their commitment to reasonable tradeterms and normal fulfillment of orders for as long as the federal loanis outstanding. This will assure that neither Chrysler, nor oursuppliers would suffer the substantial losses caused by theplant/production shutdowns that result from stop shipments or otherdisruptions.
We will seek continued dealer cooperation to improve our cash positionand consolidate our U.S. network. Project Genesis is on the path toaligning our product portfolio with a smaller, healthier tri-brandeddealer network based on the realities of our business environment.Because strong, healthy dealers are essential to our success, we arealso working with our dealers to keep dealer inventories in line withthe marketplace, focusing on how they can support their businessdespite the falloff in sales through sales of used vehicles, serviceand parts.
As a condition of the bridge loan, we have committed to work with ourlenders to seek their participation in concessions as well.
Cerberus has already agreed to forgo any benefit from the upside thatwould, in part, be created from the bridge loan and any othergovernment assistance that the Company may obtain.
All employees have and will continue to help support Chrysler'srecovery. We have also partnered with the UAW to find newopportunities to increase our competitiveness. The Company has alreadyundertaken and will continue to undertake significant cost reductionactions related to salaried workers also.
The bridge loan allows us to meet cash needs, pay our suppliers,continue developing great products and move forward with therestructuring and streamlining of our organization that we began in2007. This restructuring will reduce the number of personnel layerswhile increasing managers' span of control, enabling us to reducecosts, make faster decisions and do our jobs effectively with fewerresources.
In our drive to profitability, we will not slow down on plans toprovide the cars and trucks that people in markets around the worldwant to buy. We have 24 major launches in our plan from 2009 through2012, with a key feature of this future product strategy being ourcapability as an electric vehicle company. Building on our status asthe largest producer of electric-drive vehicles in the United Statestoday with our GEM unit, we are focusing on electric as our primaryclean-vehicle technology. Combined with our new products from our ENVIgroup, we expect that 500,000 Chrysler electric-drive vehicles will beon the road by 2013.
It is essential that we continue to promote our lineup of current andfuture products so that our customers understand the profound changestaking place at Chrysler. With that in mind, we will be revealingseveral important new products at the upcoming North AmericanInternational Auto Show. We also sought the support of our localDetroit area dealers for the auto show, and I want to express myappreciation to all those that have provided assistance to help fundour exhibit.
While promoting our products, we will also appropriately scale backsome of our presence at the auto show because of current businessconditions. We have conserved costs in our press event with vehiclereveals that are product-focused and straightforward, and a simplifiedproduct display.
As we draw to the end of this very eventful and difficult year, I wantto extend my thanks to all who contributed to Chrysler this year,including our many colleagues who have moved on. Against the difficultconditions of a global recession, you have once again shown theresilience that is the hallmark of Chrysler people. In recent weeks, Ihave received hundreds of letters of support from those in theextended Chrysler family, confirming that there is great enthusiasm torestore our company to success.
With the holidays upon us, I hope you can take time to enjoy thewarmth and companionship of good friends and family. Please have asafe and joyous holiday season, and let's all return in 2009 with arenewed commitment to making Chrysler the great company we all want itto be.
Bob Nardelli
To Chrysler employees and other stakeholders:
We have received news that U.S. Treasury Secretary Henry Paulson willprovide $4 billion of initial funding to Chrysler LLC from the TARP(Troubled Assets Relief Program) as a loan to help bridge the currentfinancial crisis. We appreciate the Administration's confidence inChrysler.
As outlined in our submission to Congress, we intend to be accountablefor this loan, including meeting the specific requirements set forthby the government, and will continue to implement our plan forlong-term viability. The receipt of this loan means Chrysler cancontinue to pursue its vision to build the fuel-efficient,high-quality cars and trucks people want to buy, will enjoy drivingand will want to buy again.
For Chrysler to succeed in its mission to return to profitability, weneed the continued support of our many business partners. Termsassociated with the bridge loan include Chrysler's commitment to workwith key constituents â including our owners, lenders, suppliers,dealers, management and employees â to identify and achieve thecost-savings concessions we need to build a long-term viableenterprise. These concessions discussions will happen quickly, as afull governmental review and approval of our plan is expected by March31, 2009.
We are meeting with our suppliers, mindful that they are going througha difficult period as well. But we must cooperatively find ways tofurther reduce our costs while maintaining normal operations. We willask our suppliers to maintain their commitment to reasonable tradeterms and normal fulfillment of orders for as long as the federal loanis outstanding. This will assure that neither Chrysler, nor oursuppliers would suffer the substantial losses caused by theplant/production shutdowns that result from stop shipments or otherdisruptions.
We will seek continued dealer cooperation to improve our cash positionand consolidate our U.S. network. Project Genesis is on the path toaligning our product portfolio with a smaller, healthier tri-brandeddealer network based on the realities of our business environment.Because strong, healthy dealers are essential to our success, we arealso working with our dealers to keep dealer inventories in line withthe marketplace, focusing on how they can support their businessdespite the falloff in sales through sales of used vehicles, serviceand parts.
As a condition of the bridge loan, we have committed to work with ourlenders to seek their participation in concessions as well.
Cerberus has already agreed to forgo any benefit from the upside thatwould, in part, be created from the bridge loan and any othergovernment assistance that the Company may obtain.
All employees have and will continue to help support Chrysler'srecovery. We have also partnered with the UAW to find newopportunities to increase our competitiveness. The Company has alreadyundertaken and will continue to undertake significant cost reductionactions related to salaried workers also.
The bridge loan allows us to meet cash needs, pay our suppliers,continue developing great products and move forward with therestructuring and streamlining of our organization that we began in2007. This restructuring will reduce the number of personnel layerswhile increasing managers' span of control, enabling us to reducecosts, make faster decisions and do our jobs effectively with fewerresources.
In our drive to profitability, we will not slow down on plans toprovide the cars and trucks that people in markets around the worldwant to buy. We have 24 major launches in our plan from 2009 through2012, with a key feature of this future product strategy being ourcapability as an electric vehicle company. Building on our status asthe largest producer of electric-drive vehicles in the United Statestoday with our GEM unit, we are focusing on electric as our primaryclean-vehicle technology. Combined with our new products from our ENVIgroup, we expect that 500,000 Chrysler electric-drive vehicles will beon the road by 2013.
It is essential that we continue to promote our lineup of current andfuture products so that our customers understand the profound changestaking place at Chrysler. With that in mind, we will be revealingseveral important new products at the upcoming North AmericanInternational Auto Show. We also sought the support of our localDetroit area dealers for the auto show, and I want to express myappreciation to all those that have provided assistance to help fundour exhibit.
While promoting our products, we will also appropriately scale backsome of our presence at the auto show because of current businessconditions. We have conserved costs in our press event with vehiclereveals that are product-focused and straightforward, and a simplifiedproduct display.
As we draw to the end of this very eventful and difficult year, I wantto extend my thanks to all who contributed to Chrysler this year,including our many colleagues who have moved on. Against the difficultconditions of a global recession, you have once again shown theresilience that is the hallmark of Chrysler people. In recent weeks, Ihave received hundreds of letters of support from those in theextended Chrysler family, confirming that there is great enthusiasm torestore our company to success.
With the holidays upon us, I hope you can take time to enjoy thewarmth and companionship of good friends and family. Please have asafe and joyous holiday season, and let's all return in 2009 with arenewed commitment to making Chrysler the great company we all want itto be.
Bob Nardelli
