Chrysler's Bid For Survival Auto analysts say that any more government money should not be used to help Chrysler continue as is. Instead, they say, Chrysler should use the money to wind down its business or merge with a stronger automaker.
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Chrysler's Bid For Survival

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Chrysler's Bid For Survival

Chrysler's Bid For Survival

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STEVE INSKEEP, Host:

It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.

ARI SHAPIRO, Host:

NPR's Frank Langfitt reports on whether the company can survive.

FRANK LANGFITT: Here's just a sampling of what they said.

MICHAEL ROBINET: From many perspectives, possibly the best solution for Chrysler right now is really a controlled wind- down of the organization.

BILL VISNIC: It just doesn't appear to be a recoverable sort of a situation now.

BRIAN JOHNSON: We simply have too much capacity, too many brands, too many factories, and Chrysler's the least viable company.

LANGFITT: And that was Michael Robinet, an auto forecaster with the Michigan company CSM, Bill Visnic, a senior editor at Edmunds.com, the auto consumer Web site, and Brian Johnson, an analyst with Barclays Capital in New York. Chrysler dismisses this sort of talk. Here's company spokesman Stuart Schorr.

STUART SCHORR: You know, we understand at Chrysler there's always skeptics out there, and I'm pretty sure that none of those people have had an opportunity to see our plan. And the submission that we're going to give to the Treasury Department will outline Chrysler's plans for the company to be viable over the long term, under a number of different scenarios, including the difficult economic times that we face today.

LANGFITT: Here's how Frank Klegon, who oversees Chrysler's product development, described the deal.

FRANK KLEGON: The alliance will give us access to Fiat Group vehicle platforms, which will complement our current product portfolio with fuel-efficient, environmentally friendly small cars and powertrain technology.

LANGFITT: But Maryann Keller, an automotive consultant and author, says Fiat can't save Chrysler in the short run. Building Fiats here will take a lot of investment and time to convert factories.

MARYANN K: We're talking probably billions of dollars and a few years if everything worked perfectly. Who's going to provide that money?

LANGFITT: Patrick Anderson is a Michigan economist. He says the fact that Cerberus and Fiat won't support Chrysler makes the pitch for government aid that much harder.

PATRICK ANDERSON: If normal investors don't want to put their own money at risk, we should be asking ourselves whether the taxpayers should ever put a dime in there.

LANGFITT: Kim Korth runs IRN, an auto consulting firm in Grand Rapids. She says buyouts help the bottom line, but have cost Chrysler talent.

KIM KORTH: There are very few people of any historic basis in Chrysler or any significant in-depth competence that are still there.

LANGFITT: And why have they all left?

KORTH: I think there's been a concern that Cerberus, the owner, is not committed to the long-term business plan. And I think they decided that this was probably, to some degree, a sinking ship.

LANGFITT: Unidentified Man #2: Jeep Grand Cherokee. Are you having fun yet?

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LANGFITT: Jesse Toprak is a senior analyst with Edmunds.com. He says other companies, including foreign ones, might want those vehicles.

JESSE TOPRAK: If you go to anywhere in the emerging world, you go to Asia or Eastern Europe or South America, if you have Jeep Grand Cherokee, it's a symbol that you made it.

LANGFITT: But Aaron Bragman, an analyst with IHS Global Insight, says selling the stronger lines like Dodge Ram to other companies could be tough in this economy.

AARON BRAGMAN: There aren't any buyers. There isn't anybody out there who has the cash, who has the financing, or who has, really, the interest in taking on these brands.

LANGFITT: Bragman is more optimistic about Chrysler than most. He thinks the Fiat deal could be a big boost. But he also says that with much lower demand for vehicles, sustaining three Detroit auto companies may not be possible.

BRAGMAN: This is really the new reality of the auto industry globally. It's going to be smaller. There are going to be fewer players. And whether or not Chrysler is still part of it is really, I think, going to be decided in the next two months.

LANGFITT: Frank Langfitt, NPR News, Washington.

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