Chrysler: Without $5 billion more in loans, it's over UPDATE How bad is it at Chrysler? So bad they have one foot in the grave and the grave digger is beginning to backfill the hole.
You won't see many clocks on the walls at Chrysler's headquarters in Auburn Hills.
The automaker took most of them down -- to save an estimated $20,000 a year on batteries and having workers change the time twice a year for daylight saving time.
It's part of the company's intensified efforts to live on a shoestring budget as it operates on $4 billion in federal loans. Chrysler, which is seeking another $3 billion in assistance, is expected to turn in its viability plan to the government today as a condition of receiving those funds.
Meanwhile, Chrysler is cutting to save money. So far, it has:
• Stopped plowing the top floor of five parking decks and four paved lots at its headquarters complex, for a total savings of more than $350,000 this winter.
• Removed 40,000 of the 80,000 light bulbs at its headquarters complex to save $400,000 a year.
• Cut spending on Christmas decorations by at least $11,000, to $1,000 in 2008.
• Turned down the temperature in hallways from 72 degrees to 68, to save $70,000 a year.
• Put 32 pieces of art, appraised in 2007 at $2.3 million, up for sale.
• Cut food services. Hours were trimmed at the main cafeteria. Four satellite cafeterias, sandwich kiosks and the executive dining room have been shut down. Detroit Free Press02/17/09 Chrysler LLC will need an additional $5 billion to survive the U.S. recession, telling the Obama administration today that it plans to cut an additional 3,000 jobs this year and eliminate the Chrysler Aspen, Dodge Durango and the Chrysler PT Cruiser as part of its restructuring plan.
The automaker, which disclosed today that it lost $8 billion in 2008, warns that if it does not receive the federal money and needed concessions by March 31, "management believes the only alternative would be to immediately plan for an orderly wind down of all operations through a court-supervised liquidation.
"This is clearly not an alternative Chrysler would prefer, but is one that the Company is prepared to implement if required," the company said in its submission to the U.S. Treasury.
The additional money, some of which Chrysler has said it needs before the end of March, would come on top of the $4 billion that Chrysler received last year, for a total rescue of $9 billion.
Along with the job cuts, Chrysler said it is planning to cut total costs by $700 million this year, stop building three models, sell $300 million in assets and cut its factory capacity by 100,000 vehicles.
The company said it had reached agreement with the UAW for concessions on wages to be competitive with foreign-owned automakers in the United States and retiree health-care trust funds, but was still in talks with suppliers and debtholders.
Chrysler said the plan “demonstrates standalone viability which could be enhanced through a strategic alliance” with Fiat SpA. Chrysler says it plans envisions it beginning to pay back the federal loans through 2012.
The government requested that as part of its plan, Chrysler describe a liquidation plan, including a Chapter 11 plan. Under a Chapter 11 reorganization, the company would require $20 billion to $25 billion in financing to make it through two years.
“It would cost a lot more money and it would cause tension and concern both among the dealers and the customers that’s not necessary,” said Chrysler Vice Chairman Jim Press. Detroit Free Press