ROBERT SIEGEL, host:
SIEGEL: From NPR News, this is All Things Considered. I'm Robert Siegel. When speaking of automakers, we still say The Big Three. It's a reflex we learned years ago. In fact, the biggest of the big three, GM is in serious trouble and under a great pressure to reorganize for its survival. The number two automaker, Ford, is in trouble, but so far, its bosses say they don't need billions from Washington to make it through the winter. It is Chrysler whose plight seems so extreme it deserves a fractional ranking, the company that runs at the big two and a half, perhaps. The private investment group, Cerberus Capital Management, took Chrysler off Daimler's hands last year. Daimler still owns about 20 percent of the company's stock, but Cerberus owns the rest, making Chrysler a very unusual beast for these times, a privately held carmaker. Can Chrysler really survive? That's our question for Neal Boudette, Detroit bureau chief for the Wall Street Journal. Neal, what do you think?
Mr. NEAL BOUDETTE (Detroit Bureau Chief, Wall Street Journal): The smart people in the industry say no. That Chrysler is too small. It's really only a North American auto company. It doesn't have many operations overseas. So therefore, it's not global and doesn't have a scale of a company like GM, or Ford, or Toyota. And really, I think Chrysler's future is in hooking up with another automaker. They've had some extensive talks with Nissan. And they have had some talks with GM. But really the company's future is in hooking up with somebody else.
SIEGEL: Here are some of the mixed signals that we hear about Chrysler. One day, it's reported the Cerberus is willing to sell its stock to the UAW, to the union. Then, it announces, it will invest the first $2 billion of profits from Chrysler Financial back into the parent company, the automaker. And Robert Nardelli, the CEO of Chrysler, says all kinds of new Chrysler models are going to be introduced next month at the auto show. Does this make senses to you?
Mr. BOUDETTE: I take whatever Cerberus or Chrysler says in public with a very large grain of salt, because if you look at just the statement about Cerberus putting the first $2 billion in proceeds from Chrysler financial, it's unlikely that Chrysler financial made any money this year. They may not make any money next year. So, really it's unclear when that money could come. In terms of announcing new models, well, Chrysler made a big deal in September, of showing some electric vehicles. But these were really just test vehicles. And they're a long, long way from being actual products. So, you really have to look very closely at what they say.
SIEGEL: And to as to whether it's a majority shareholder, effectively its owner Cerberus is in good shape, we just don't know.
Mr. BOUDETTE: That's true. Cerberus is a private equity group. They take money from private individuals and pension funds and other investment funds. And beyond that, we don't really know much about the company. They do say in public that they have $27 billion under management. But in terms of Chrysler, it's very hard to tell what their strategy and what their plan is. In fact, just today, the Wall Street Journal reported that Cerberus owns the Chrysler's headquarters, the actual property and building itself. They bought that as part of the original deal with Daimler in August 2007, and until now, that had been unknown. The employees at Chrysler themselves, did not know the building was no longer owned by the company.
SIEGEL: Yeah, what you're saying - Cerberus is much bigger than just Chrysler, and Cerberus, not Chrysler, owns the building, you're saying.
Mr. BOUDETTE: That's correct. Cerberus set up a company that owns the building. And Chrysler leases the building back from that company.
SIEGEL: Of course, Chrysler is famous for its near-death experience in the late 1970s, when it was bailed out by Washington. And it's often been described as a successful example by some of how the government can save a big company. It's so long ago, is that still it all part of the culture of Chrysler? Do you encounter it at all, or it is just an ancient history nowadays?
Mr. BOUDETTE: Well, employees will tell you that. Know that we have been through tough times before. In fact, Bob Nardelli in many of his speeches and emails that he sends to employees, he reminds them that this company has risen from the ashes before. Not just once, but many times. And he tells them that it will again. I think that's probably still an open question.
SIEGEL: Neal Boudette, Detroit bureau chief of the Wall Street Journal, thanks a lot for talking with us about Chrysler.
Mr. BOUDETTE: Pleasure being here.
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