- The Washington Times - Thursday, April 9, 2009

NEW YORK | Chrysler President and Vice Chairman Jim Press said Wednesday that the government's May 1 deadline for the automaker to complete a deal with Italian automaker Fiat allows “ample time” to reach a definitive agreement that could be key to saving Chrysler LLC from bankruptcy.

“We prefer having a shorter time frame to get through this period, get all the questions out of our minds, and get back to business as usual,” Mr. Press said during a day of media previews at the New York International Auto Show.

He surprised reporters at Chrysler's news conference to unveil a new Jeep Grand Cherokee by arriving on the stage in an iconic Fiat 500 subcompact. The 500, one of the Italian automaker's most successful models, would help fill the void of small vehicles in Chrysler's lineup if Chrysler survives and brings Fiat cars to U.S. showrooms by 2011, as planned.

“Don't you think that this would be a perfect car to get around New York City?” he asked reporters. Shortly after, the 2011 Jeep Grand Cherokee rounded the stage's corner and ascended a series of steps onto the stage.

The vehicle, which will be 11 percent more fuel-efficient than its predecessor, will go on sale early next year.

General Motors Corp., meanwhile, introduced a new sport utility vehicle of its own this week - a five-passenger crossover dubbed the Terrain. The car comes with a fuel-sipping four-cylinder engine that includes an “eco” mode that can boost highway mileage to 30 mpg.

The struggling automaker also demonstrated a new two-seat, electric-powered vehicle called the PUMA in New York. The company is developing the small vehicle, capable of hitting 35 mph and running for 35 miles on a single charge, with Segway Inc., makers of the personal transporter.

Officially, the Personal Urban Mobility and Accessibility Project - or Project PUMA - could revolutionize city travel, GM and Segway said.

“It could allow people to travel around cities more quickly, safely, quietly and cleanly - and at a lower total cost,” the companies said.

Mr. Press said Chrysler has been aggressively moving to reduce costs while still unveiling new vehicles. The company has plans to introduce eight new vehicles within the next 18 months.

“We realize we have a responsibility to the American public,” he said.

Mr. Press said Chrysler has been having a “constructive dialogue” with Fiat. The automaker's chief executive, Sergio Marchionne, flew to Detroit on March 30, the day the Obama administration announced Chrysler and General Motors' restructuring plans were insufficient and set strict deadlines for the companies to reach new goals or face bankruptcy.

“At this point in time with Fiat, we don't see anything that would be an impasse or a deal breaker,” Mr. Press said. “We've had a constructive dialogue going, a cooperative dialogue with all the stakeholders, and we're hopeful that we'll be able to achieve the goals.”

He said the company is progressing under the assumption that bankruptcy will not be required.

“We're pursuing the deal with Fiat assuming that a bankruptcy would not be the favored option. It wouldn't be in the best interest,” he said. “Obviously, you can't rule anything out, but we're working full speed, 24 hours a day to achieve the alliance and get our viability plan approved.”

The government has said it will continue providing short-term aid for Chrysler while the Auburn Hills, Mich., company works out a deal, but Mr. Press said Chrysler hasn't needed more than the $4 billion the government provided earlier this year.

“We've been assured that if we need additional short-term aid, it's available from the government,” he said. “Right now we're OK at this point in time.”

Mr. Press declined to comment on reports that banks that lent Chrysler $6.8 billion in 2007 are resisting efforts to convert most of the automaker's debt to equity.

“We've got a lot of discussions going on with a lot of stakeholders, a lot of balls in the air,” he said. “Those discussions are going on right now.”

In an announcement on the auto industry earlier in the day, the Treasury Department said GM and Chrysler have launched financing support programs for auto suppliers backed by $5 billion in government funds.

The programs provide government guarantees that money owed to the suppliers by the ailing auto makers will be paid. It's funded by the $700 billion bailout fund.

Treasury spokeswoman Jenni Engebretsen said the programs will restore credit in a sector that employs more than 500,000 people.

The department said last month that it would provide financial assistance to the auto suppliers. Besides money from the bailout fund, the government is supporting the auto industry with about $25 billion in loans.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide