The Obama Administration's auto task force is set to report by Mar. 31 on the wisdom of continuing to bail out GM and Chrysler. Recent reports suggest that the deadline may not be D-Day for Detroit, as some have billed it. Instead, it may be the first step in a longer-term look at troubled U.S. automakers—and how much help they should get from the feds. The likelihood that Detroit will get more assistance got stronger on Mar. 19 when the Treasury Dept. released a plan to offer $5 billion in rescue money to auto-parts suppliers. Meantime, a deal under consideration could give Fiat a 35% stake in Chrysler and perhaps open the way for a larger ownership position later. Clearly, this is a defining moment for Chrysler, so I talked with Bob Nardelli, the CEO hired by private equity owner Cerberus to turn around the struggling carmaker.MARIA BARTIROMO
How would you rate the job the auto task force is doing?ROBERT NARDELLI
I certainly understand the learning curve they're on, having gone through it myself over the last 18 months. So I give them very high marks.
The point men on that task force are Steve Rattner, a former journalist, private equity firm partner, and Democratic activist; and Ron Bloom, a labor restructuring expert. Have they spent any time with you, understanding the view from Chrysler's corner office?
We've had two face-to-face meetings and countless exchanges of phone calls and information. I would say those two gentlemen are totally engaged. They bring unique experience, albeit different experiences, to the table, which is very helpful to our discussions.
Do you truly believe that without Fiat, Chrysler has a long-term future as an independent car company?
We do. We have a viable standalone plan. And Fiat enhances the viability of that plan. Fiat (FIA.MI) brings $8 billion to $10 billion of real product advantage. We really need to change the perception out there that Fiat is basically getting a free ride. They're bringing hard technology. They're bringing platforms with proven reliability and durability that not only have a very high market value but will leapfrog [Chrysler] four to five years. And most important, in regards to the environment, they have the lowest-emission engine in Europe.
If the Fiat deal does not go through, is there a chance there could be some kind of merger with GM?
No. General Motors (GM) took that off the table, and I don't believe there's any opportunity to reopen that decision. I don't mean to be a broken record, but if a Fiat deal doesn't go through, we have a viable plan. And we would still have the opportunity to do product alliances with Fiat like we did with Volkswagen (VLKAY), Nissan (NSANY), and Mitsubishi. But [the relationship with Fiat] would be on a much smaller scale and wouldn't enhance our ability to pay back the government loan sooner.
How much money does Chrysler need to survive?
If you'll remember, when we submitted our original plan, we asked for $7 billion. We received $4 billion in early January. From the time we made our original submission through Feb. 17 we saw unprecedented, continually downward-spiraling sales in the U.S. market. As a result of that, we raised our overall request from $7 billion to $9 billion—$2 billion of incremental dollars. If we receive the $5 billion, that will take care of the financial needs of our standalone plan.