Nardelli expects Chrysler to remain independent

Chrysler LLC Chief Executive Robert Nardelli said that he expects the automaker will be an independent company three years from now, and that Chrysler's private-equity owners were not second guessing their acquisition.

Nardelli, speaking at a conference in New York City, said there are benefits to running Chrysler under private ownership rather than as a public company. He said it streamlines the decision-making process and sidesteps some of the second guessing that comes from equity investors and analysts.

Chrysler became a private company last August after Cerberus Capital Management LP bought an 80.1 percent stake from Chrysler's former partner, German automaker Daimler AG, in a $7.4 billion deal.

Cerberus said last week that it has not sold any of its stake in Chrysler after a published report said the firm had sold more than half its equity to investors including major banks and hedge funds in order to reduce its risk.

Asked what the endgame was for Chrysler, Nardelli said that remains up to the owners - and shrugged off speculation he would have a role in such a decision.

"Strategic alternatives down the road is Cerberus' deal," he said at The Wall Street Journal's "Deals and Deal Makers" conference. "That keeps me focused on running the company."

With truck and sport utility vehicle sales tumbling and its US-based competitors either closing factories or cutting production, industry analysts have said Chrysler may be the next automaker to announce further cuts.

Chrysler has said that moves announced late last year are sufficient for now to deal with the declining US auto market, and Nardelli did not talk about further cuts in his speech. But he told The Wall Street Journal in an interview on the sidelines of the conference that Chrysler "may have to go back and resize" production again in light of declining truck sales.

High gas prices, the weak economy and low consumer confidence have taken their toll on larger vehicle sales industrywide.

Chrysler's sales were down 25 percent in May, a month in which the whole market dropped 11 percent when compared with May of last year.

Through the first five months of the year, Chrysler's sales were off 19 percent, with huge drops in larger vehicles that make up most of its lineup.

Agencies

(China Daily 06/12/2008 page16)