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post #1 of 1 (permalink) Old 10-01-2009, 02:54 PM Thread Starter
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Chrysler to still close 8 plants

Chrysler CEO: no reprieve on U.S. plant closings
Thu Oct 1, 2009

AUBURN HILLS, Michigan - Chrysler Group LLC still plans to shutter eight North American plants according to its initial schedule, Chief Executive Sergio Marchionne said on Thursday, as he dismissed recent reports that a Detroit-area plant would get a reprieve.

Marchionne, who is also the head of the Italian carmaker Fiat SpA , said the No. 3 U.S. automaker will stay with business decisions it made at the time of its April 30 bankruptcy filing, and would advise the U.S. autos task force of its updated turnaround plan.

Under its previously announced restructuring plan, Chrysler said it would close eight auto plants in North America, aimed at steering the faltering automaker toward recovery.

In the past week, reports have said that Chrysler's Sterling Heights, Michigan plant slated for closure at the end of 2010 would remain open until at least 2012 as the company revamped the two sedans made there -- the Chrysler Sebring and the Dodge Avenger.

"There are no plans on my desk that the decision is going to be reversed," Marchionne told reporters at an appearance at Chrysler's global headquarters.

Chrysler is offering an update to the White House's autos task force this week, a U.S. Treasury official said on Tuesday.

"I think we are going to advise them of the fact, that, based on the current assessment of conditions, there is absolutely no need today to go up there and revisit that decision," said Marchionne.

"And, if and when that need were to arise, then we will look at this as part of a wider set of choices that may or may not include Sterling Heights."

Marchionne said Chrysler is working on the final details of a five-year turnaround plan to be unveiled in November. The company emerged from bankruptcy on June 10 by selling most of its assets to a group led by Fiat, which took a 20-percent ownership stake in Chrysler and full management control.

Marchionne said Chrysler is in a "cleansing process" similar to one that he led in 2004 when he started a successful turnaround of Fiat, and Chrysler's weak September sales results do not reflect the true viability of the company.

Chrysler on Thursday reported a 64-percent plunge in September U.S. sales, compared to a year earlier.

He said a combination of factors including the end of the U.S. "cash for clunkers" buyer-incentive program and reduced incentive spending led to depressed sales figures for September.

"We are not bleeding like people think we are," Marchionne said.

"The future (for Chrysler) is going to be a lot better" than what last month's sales figures would indicate, he said.

After the "cleansing process" that includes an emphasis on cutting costs, Marchionne said "We need to go back and make products that people want."

Many analysts, suppliers and other automotive executives say Chrysler desperately needs new vehicles after emerging from bankruptcy with $10 billion in U.S. government financing.

Marchionne said recently that he was surprised at the lack of product development done by Chrysler's previous owners, Cerberus Capital Management and Daimler AG, in the two years before his arrival in June.

People involved in the discussions told Reuters on Wednesday that Fiat will rush the first all-new Chrysler model to the U.S. market by the end of 2011 and create a new Ram brand for its truck line under a revival plan for Chrysler.

Article Link:Chrysler CEO: no reprieve on U.S. plant closings | Reuters

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