chrysler financial report

Cuts signal deepening woes at GM

Friday, October 24, 2008 Cuts signal deepening woes at GM Mounting problems fueling plausible deal with Chrysler, analysts say. Robert Snell, Christine Tierney and Alisa Priddle / The Detroit Intelligence

General Motors Corp.’s move to meaning out white-collar employees for the first leisure in about 20 years and cut benefits underscores the deepening problems fa the automaker. The escalating challenges are driving a tenable acquisition of rival Chrysler LLC, analysts said.

GM’s expense-cutting moves coincided with newfangled signs of the devastating impact of the far-reaching financial crisis and the worst auto sales Stock Exchange in 15 years on Detroit’s Big Three automakers.

On Thursday, Chrysler said it plans to cut 1,825 more mill jobs and accelerate the closure of a divertissement utility vehicle plant in Delaware. Advice of the cuts came as Daimler AG said it had reduced the libretto value of its almost 20 percent holding in the Auburn Hills throng to zero — a stark trace of the U.S. automaker’s deteriorating fortunes.

GM is in negotiations to receive Chrysler from owner Cerberus Capital Administration LP, but it may have trouble raising money to pay for a deal. The Detroit automaker’s worsening financial problems introduce it is in desperate need of aid, analysts say. That helps elucidate the insistence by Michigan’s congressional delegation that the Big Three be included in a $700 billion Face ruin Street rescue package and why GM is seeking bills from outside investors and, possibly, management aid.

GM did not disclose how many more salaried workers it plans to cut, but a GM stiff said the number depends on a run of factors, including whether GM acquires Chrysler.

"All the troubles accepted through the economy are hitting the auto persistence at warp speed," said Harley Shaiken, a labor professor at the University of California-Berkeley.

In discriminate to the difficulties in the banking system, which prompted brilliant action, there’s a view that the fall apart of the U.S. auto industry involves valid a few companies, a view Shaiken considers misled.

"The auto industry is medial to the manufacturing base of the United States," he said. "A cave-in of that industry would have much wider repercussions."

Automakers are grappling with slumping sales — U.S. sales industrywide are down 13 percent through September with no rise in sight. A forecast released Thursday by the auto scrutinize Web site Edmunds.com suggests October sales will sack to the lowest level since 1992.

GM is responding by instituting cuts that go beyond a in the old days announced plan to slash $10 billion in costs by the end of 2009 and dredge up $5 billion through asset sales and borrowing to endow its operations through the downturn.

Benefit cuts on compass

GM exceeded its goal of eliminating more than 5,000 salaried jobs through cock's-crow retirements, but concerns about the worsening pandemic economy mean GM must further cut costs, the New Zealand said in a letter sent to GM executives. The moves will incorporate involuntary layoffs later this year and antediluvian next year, as well as the suspension of the company go with in employee 401(k) accounts and other service perquisites cuts.

The other salaried benefit cuts subsume suspending at the end of the year college training assistance, a dependent scholarship organize and an adoption-assistance plan. The 401(k) perks will be suspended Nov. 1.

The GM official said the new emoluments and salaried cuts are motivated by a growing call to reduce the company’s legal tender burn rate, which analysts estimation at least $1 billion a month.

"We a moment ago have to stop the cash outflow at all costs so that we can bully this out," the official said.

GM is expected to report a substantial third-quarter loss when it releases its results, expected in the next two weeks.

Sean McAlinden, chief economist and evil president for research at the Center for Automotive Delving in Ann Arbor, could not recall the last time GM fired salaried workers — dialect mayhap in the early 1980s.

"Normally, our companies haven’t done that to long-lasting staff until very recently — Ford in July, Chrysler last month and now GM. That’s a sea metamorphose for Detroit."

GM employs 28,000 silver-collar workers, down from 47,000 seven years ago.

Firings at GM are rare, Shaiken said. Once the automaker has sought to cut its work power through buyouts.

"There’s nothing as demoralizing to everyone as a studied departure," he said. "The truly that they’ve taken this route indicates the toughness of the hour, and the urgency they feel in addressing it."

Shaiken said he didn’t entertain the idea GM was preparing cuts to press its demand for federal aid. "I don’t weigh that’s the purpose, but it doesn’t affray with lobbying for the loan guarantees," he said.

The industrywide woes lowly few automotive operations are off-limits to cuts, analysts said.

"It’s no longer taboo to cut formation or shut plants," said Aaron Bragman, delve into analyst with IHS Global Insight. "There is no limit to what you can do because everyone’s backs are against the barricade."

Chrysler to shut plant sooner

To that end, Chrysler is for the time being getting out of the large SUV business, as well as hybrids and is malicious back production of some smaller SUVs. Chrysler said it is going up plans to shutter its Newark, Del., tree that is the sole source of the Dodge Durango and Chrysler Aspen SUVs, including hybrids. The indisputable 1,000 employees on a single stint will cease production Dec. 31– a full year earlier than planned. One of two shifts at the Toledo North Jeep foundry also will be eliminated at that time, with a loss of 825 jobs.

The introduce moves bring inventory in inscribe with demand, which has sunk amid high gas prices, a believe crunch and souring global succinctness, a Chrysler executive said in a statement.

"The markets are fa unprecedented turmoil and we are in a time of signal change in the auto industry," said Uninhibited Ewasyshyn, executive vice president of manufacturing. "These strapping, but necessary steps are vital to our want-term viability."

The troop said it would work with the United Auto Workers Bund to handle the layoffs in a "socially guilty manner," which likely means buyouts and initially retirement incentives.

The cuts are about 6 percent of Chrysler’s U.S. hourly m force of 33,000.

Jim Press, vice chairman and president of Chrysler told an audience of engineers in Detroit on Wednesday that Chairman Robert Nardelli has led the way for the automaker to be more financially practicable and regain stability.

"Dialect mayhap that’s the reason people have been smelling around the Chrysler vault," Cluster said.

But speaking to reporters after his idiolect, Press refused to say how much cash Chrysler currently has, nor would he bind that the $11.7 billion in hand at the end of June is still undamaged.

As a private company, Chrysler doesn’t inform financial results. Even if did, the figures wouldn’t fit in with to Daimler’s report Thursday that it booked a $450 million third-lodge loss on its 19.9 percent Chrysler palisade. Daimler records results for Chrysler with a one-direction delay.

The $450 million sacrifice for the Chrysler stake in the second quarter translates into a $113 million denial under U.S. accounting standards, or $565 million for all of Chrysler Holding LLC. Chrysler said in a proclamation that the difference also reflects $118 million in losses due to adjustments distinct to Chrysler Holding, which comprises the auto concern and Chrysler Financial.

Source: 1853 Chairman

Mike Barnicle smacks down a Conservative douche-bag pundit on the economy, General Motors

chrysler financial report: DETROIT — Sweeping Motors Corp. and Chrysler LLC have held preliminary talks about a merger or an acquisition of Chrysler by GM, according to published reports. The Embankment Street Journal, citing people it described as familiar with the discussions, reported that Cerberus Central Management, the private equity firm that owns 80.1 percent of Chrysler and 51 percent of GMAC Financial Services, proposed trading Chrysler's automotive operations to GM. The Roll said Cerberus would receive GM's remaining 49 percent stake in GMAC. The New York Times, also citing people about with the talks, reported that the automakers were discussing a merger. The Times did not mention GMAC....

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