Money losing Chrysler to be ditched soon

While Chrysler LLC gathered journalists from around the world last week to its Chelsea Proving Grounds to show off its 2009 model year lineup, there are growing concerns about the future of the Auburn Hills automaker. An influential annual study of the U.S. automotive product pipeline says Chrysler's lack of future product plans is an indication of a near-future breakup or sale by the automaker's majority-owner, Cerberus Capital Management.

"Chrysler's product pipeline severely lags the industry on a number of key metrics, which is an ominous sign for its market share," Merrill Lynch's recently issued Car Wars report said. "We believe that this is an active decision by new owners to rationalize the product portfolio in advance of a breakup/sale."

A Chrysler spokesman called the prediction of a sale ridiculous and a Cerberus spokesman said the private equity firm has "a model that is buy, fix and hold."

Industry analysts are predicting the next 18 months or so could be incredibly trying for the truck-heavy Chrysler, especially as $4-a-gallon gasoline leads more car shoppers to turn to fuel-efficient cars.

"Chrysler's product pipeline over the near term is relatively modest, indicating that the company's lineup may remain misaligned with the market," a note by Fitch Ratings said last week. "Limited cash resources and capital constraints remain a distinct competitive disadvantage in a period of rapid product migration and technological change." Detroit Free Press