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September 15, 2008

GRAND RAPIDS, Michigan: The chairman of the private equity firm that owns most of Chrysler says a commitment to making better products and working more closely with dealers will be key factors in the struggling automaker's turnaround.

John Snow of Cerberus Capital Management LP said Monday after delivering a speech to representatives of the metal-forming industry that he is confident the seven new models Chrysler plans to offer by 2010 will appeal to consumers.

Chrysler LLC Vice Chairman Jim Press announced the new models last week, saying only that they will include the previously announced revision of the Jeep Grand Cherokee and a subcompact car jointly produced with Nissan Motor Co.

Snow declined to disclose particulars about the new vehicles, saying that information should come from Chrysler executives.

"I know there's a deep commitment here to putting out better products," he said at the International Council of Sheet Metal Presswork Associations' International Congress, held every three years.

He also said Chrysler is working in concert with its dealers to make sure it is building cars people will want to buy.

"In the end, this comes down to producing cars that people want at attractive prices, and having your dealers in concert with the manufacturer," Snow said. "I think we're going to get that right. I really do."

Chrysler's U.S. sales are off 24 percent so far this year, while the overall market is down 11 percent.

In August 2007, New York-based Cerberus obtained an 80.1 percent stake in Chrysler from DaimlerChrysler AG in a $7.4 billion deal. The German automaker, now called Daimler AG, retained a 19.9 percent interest in the new privately held company, Chrysler LLC.

Chrysler does not disclose detailed financial results but Daimler's most recent earnings report indicated Chrysler lost an estimated $510 million in the first quarter. Chrysler has said it is meeting its internal financial goals.

Snow, who served as treasury secretary under President George W. Bush from 2003 to 2006, said during his speech in Grand Rapids that he expects the nation's economy to continue going through a "painful" but "absolutely essential" adjustment period for the next 12 to 18 months to offset years of Wall Street excesses.

The news Monday that Bank of America Corp. had acquired financially troubled Merrill Lynch & Co. for $50 billion and Lehman Brothers Holdings Inc. had filed for bankruptcy protection "underscores the depth of the financial market's problems that the United States and the world are going through," Snow said.

LINK: Cerberus: New Chrysler products will have appeal - International Herald Tribune
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