According to the Free Press: “There’s only two times in my life when I have seen the Supreme Court act quickly,” said Jennifer Shaw, a retired bankruptcy attorney who has closely followed the Chrysler case. One was the Bush v. Gore recount, she said, and the other was whether President Richard Nixon had to comply with U.S. District Judge John J. Sirica’s order that Nixon turn over his tapes.

One of the only hurdles left is a small group of Indiana shareholders, who on Sunday filed product liability claims in order to save pensions. One of the terms of this sale states Fiat faces no risk from product liability lawsuits filed against Chrysler related to vehicles produced or sold until the day the sale closes.

NEW YORK — A federal bankruptcy judge approved the sale of most of Chrysler LLC’s assets to Italy’s Fiat, moving the American automaker a step closer to its goal of a quick exit from court protection.

“With this approval, the new Chrysler Group is created and can prepare to launch as a vibrant new company formed with Fiat,” Robert Nardelli, Chrysler’s outgoing chairman and chief executive, said in a statement. Nardelli is slated to leave Chrysler once the sale is final.

from Bloomberg.com:

Chrysler LLC may face an “impossible goal” in completing an alliance with Fiat SpA and meeting an Obama administration deadline to erase debt and win more union concessions by April 30.

Chrysler got its blueprint for the next month yesterday from President Barack Obama’s task force, which said that $6 billion in new aid hinges on “extinguishing the vast majority” of outstanding secured debt and new givebacks from the United Auto Workers.

Meeting those requirements would require help from lenders, which haven’t negotiated in the three months since Chrysler got its U.S. loans and have little incentive to do so because they would be paid off first in bankruptcy. Even Obama’s autos panel suggested Chrysler might fare better by reorganizing in court.

“It is an impossible goal,” said Sheldon Stone, a partner at Amherst Partners LLC, a restructuring firm in Birmingham, Michigan. “The likelihood is that the 30-day period is going to allow Chrysler to get their house in order for a bankruptcy.”

Fiat Chief Executive Officer Sergio Marchionne is in the U.S. today to talk about the Chrysler deal, a spokesman confirmed. Agence Presse-France reported the trip earlier.

‘Substantial Hurdles’

A Chrysler-Fiat combination would be the world’s sixth- largest by vehicle sales, behind Ford Motor Co. The companies said yesterday they have a framework for the alliance they agreed to in principle in January, while adding that “substantial hurdles” remain.

“Given the magnitude of the concessions needed, the most effective way for Chrysler to emerge from this restructuring with a fresh start may be by using an expedited bankruptcy process as a tool to extinguish liabilities,” Obama’s task force said.

Completing the Fiat deal is a precondition for loans beyond Chrysler’s first $4 billion, the task force said, which listed debt restructuring among six additional requirements. Chrysler, dependent on light trucks and on the North American market, can’t exist as a stand-alone company, Obama’s advisers said.

“I don’t really see how this is going to get resolved in the next 30 days,” said Stephen Spivey, an automotive analyst at Frost & Sullivan Inc. in San Antonio.

Fiat’s Holding

Fiat would take an initial holding of 20 percent in Chrysler, and ultimately would be limited to a 49 percent stake, a person familiar with the alliance plans said. The Turin, Italy-based automaker also has pledged to build Fiat-designed autos in the U.S., an administration official said on March 29.

Once the companies reach a final accord, they could develop a new business plan and then enter a government-orchestrated bankruptcy to eliminate Chrysler’s debts and re-emerge in as few as 30 days, the administration official said.

Obama’s task force didn’t spell out details of what it would expect in an expedited bankruptcy. In a restructuring plan submitted to the U.S. Treasury on Feb. 17, Chrysler said it expected an “orderly wind down” unless it were granted additional aid. The company didn’t refer to bankruptcy in a statement yesterday announcing the Fiat framework agreement.

“Chrysler is committed to working closely with Fiat, the administration, U.S. Treasury and the task force to secure the support of necessary stakeholders,” said CEO Robert Nardelli, who kept his job while the auto panel asked General Motors Corp. CEO Rick Wagoner to leave.

Working Together

Obama’s task force envisions Fiat and Chrysler to reach the necessary concessions with the UAW and bank lenders together, according to yesterday’s report.

Senator Bob Corker, a Tennessee Republican who has recommended bankruptcy for the GM and Chrysler, said he expects the government would support Chrysler’s use of court protection to force lenders to rework their debt agreements.

“In essence the company’s being given to Fiat,” Corker told reporters on a conference call.

Fiat rose 42 cents, 8.8 percent, to 5.2 euros at 3:44 p.m. in Milan trading. The stock fell 9.4 percent yesterday.

The Italian automaker’s original agreement called for acquiring 35 percent of Chrysler’s equity in exchange for sharing small-car technology. It would have had the option to increase its stake to 55 percent. Chrysler values the technology at between $8 billion and $10 billion.

While the paired companies may save costs to develop products, there’s no guarantee the small cars would make money, said analyst Maryann Keller of Maryann Keller & Associates in Stamford, Connecticut. Small-car profits are difficult to achieve in the U.S. because labor costs are the same as on larger vehicles while the prices are lower.

Chrysler’s Lenders

As of March 29, Chrysler hadn’t had any negotiations with its lenders, which include JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley, people familiar with the company’s efforts said.

Bank lenders in a bankruptcy would be repaid their debts first from the sale of Chrysler’s assets. They must be convinced it’s better to take an ownership stake in Chrysler than to take their chances in recovering their cash through liquidation, Amherst Partners’ Stone said.

The lack of progress with the lenders also has held up Chrysler’s efforts to reach a deal with the UAW over the retiree health-care trust fund that is pivotal to reducing labor expenses. Chrysler wants the UAW to trade 50 percent of the $10.6 billion obligation to the fund for a stake in the company.

Chrysler already has a tentative agreement with the union to reduce labor expenses, bringing the automaker’s hourly costs closer to those at U.S. factories for Japanese manufacturers such as Toyota Motor Corp. That accord doesn’t go far enough, Obama’s task force has said.

According to World Car Fans & Edmunds:

First up will be the release of a brand new 2010 Dodge Charger. This does not come as much of a surprise, since the Charger and Chrysler 300 share the same platform. Chrysler CEO Bob Nardelli had previously announced those new vehicles back in October. A new Dodge Durango is also coming down the pipeline. This is a huge surprise from the company, since the Durango was believed to be dead-in-the-water when Chrysler announced it was closing the Newark Assembly facility in Delaware where the SUV is built.

We started thinking about what Chrysler should build to impress the US Government. Think about today’s needs – fuel economy, sleek design, hybrid technology, easy iPhone syncing. But you need to hit your niche audience as well – muscle cars and horse power.

So tell us – will you be satisfied with a lousy Chrysler 300C or Jeep Grand Cherokee? We say no! Their partnership with Fiat and Chrysler’s new Phoenix V6 engine can help do for the brand what Minivans and the K Car did in the 80′s. So write to us and vent – what kind of car do you want to see from a reborn Chrysler? And what will help them survive? Maybe we’ll put a few good ideas together and send them over to CDJ HQ.

Chrysler LLC Viability Plan Submitted Today to The U.S. Treasury Department

* Chrysler LLC viability plan to be finalized by March 31 deadline
* Chrysler to complete its aggressive restructuring started in 2007 and 2008
* Chrysler viability plan is conservatively based and newly reflects an average annual 1.8 million-unit reduction in the Company’s expected annual U.S. SAAR through 2012
* Chrysler’s viability plan is built around a robust product plan, including 24 launches in 48 months and the introduction of electric vehicles to help meet current federal fuel economy standards
* The Company’s submission demonstrates standalone viability which could be enhanced through a strategic alliance
* UAW, dealers, suppliers and 2nd lien lenders’ concessions have been implemented or fundamentally agreed upon
* Due to unprecedented economic decline and a drop in current and forecasted U.S. SAAR, the Company adds $2 billion to its original $7 billion loan request
* Payback of Chrysler LLC’s working capital loans with a premium would begin in 2012

Auburn Hills, Mich., Feb 17, 2009 – Chrysler LLC today submitted its viability plan to the U.S. Treasury Department, outlining the Company’s plans to: enhance its product lineup; complete its ongoing aggressive restructuring; and achieve cost reducing concessions from stakeholders. The Company’s plan is required to be finalized by March 31. The submission outlines significant progress towards meeting the terms of the U.S. Treasury Department’s loan agreement related to achieving competitive costs and increasing fuel economy.

“On behalf of the men and women of our extended family, we thank the Administration and the Congress for the opportunity to continue the process of requesting federal loans to assist Chrysler LLC in the restructuring necessary to achieve long-term viability,” Chrysler LLC Chairman and CEO Robert L. Nardelli said. “We fully understand the need to adapt to significantly reduced annual U.S. sales and to national concerns over energy security and climate change.

“We believe that Chrysler LLC will be viable based on the updated assumptions contained in this submission, and that an orderly restructuring outside of bankruptcy, together with the completion of our standalone viability plan, enhanced by a strategic alliance with Fiat, is the best option for Chrysler employees, our unions, dealers, suppliers and customers. Today, our people are eager to re-establish Chrysler as an iconic American company and, in the process, repay the U.S. government and taxpayers for their faith in our future. We believe the requested working capital loan is the least-costly alternative and will help provide an important stimulus to the U.S. economy and deliver positive results for American taxpayers. This plan will ensure the continued provision of health care and pension benefits to our active employees and retirees, while continuing to protect hundreds of thousands of middle class, quality American jobs at Chrysler, our dealer network and our suppliers.”

To help meet customer needs and increased federal fuel economy standards, Chrysler plans 24 vehicle launches in 48 months, and announced electric technology as a primary strategy for developing fuel-efficient, low emission vehicles, including an electric-drive vehicle in 2010. The viability plan shows compliance with current federal fuel economy requirements as set forth in the Energy Independence and Security Act of 2007. Going forward, Chrysler supports the development of a uniform national standard that reflects the input of all constituents.

To reduce costs, UAW, dealers, suppliers and 2nd lien lenders’ concessions have been implemented or fundamentally agreed upon. The signed term sheets for the Labor Modifications and VEBA modifications fundamentally comply with the requirements set forth in the U.S. Treasury Loan and once realized would provide Chrysler with a work force cost structure that is competitive with the transplant automotive manufacturers.

Since Chrysler LLC’s original $7 billion submission, there has been an unprecedented decline in the automotive sector. The continued lack of available credit affects consumers and dealers, leading to reduced wholesale orders for Chrysler. Due to this continued lack of consumer credit, we are revising our Seasonally Adjusted Annual Rate (SAAR) forecast in the plan submitted today, which is conservatively based and reflects the reality of a declining automotive industry. We are now projecting a SAAR level of 10.1 million units for this year, (which is a 40-year low for our industry) and an average SAAR level of 10.8 million units for 2009-2012. This is a reduction from our original December submission of 7.2 million units, or an average 1.8 million units annually during the four years. For Chrysler, this represents a sales decline of approximately 720,000 units, (or an average 180,000 units per year) assuming a 10 percent market share. For Chrysler, this results in approximately $18 billion in lost revenue and a $3.6 billion decline in cash inflows during the four years.

Based on this, we will require incremental financial support to continue our orderly and effective restructuring and are therefore now seeking an incremental $2 billion in addition to the remaining $3 billion that was within the scope of our original December 2 plan submission.

Chrysler LLC Viability Plan Highlights

Strategic Alliance
Chrysler has signed a non-binding agreement to pursue a strategic alliance with Fiat that represents significant strategic and financial benefits to stakeholders. The written and oral testimony Chrysler submitted to the U.S. House and Senate in 2008 stated the Company’s intent to seek the benefits of global partnerships and alliances. The proposed Fiat Alliance would enhance Chrysler’s viability plan and would provide the Company with access to competitive fuel-efficient vehicle platforms, distribution capabilities in key growth markets and substantial cost-saving opportunities.

Products
Chrysler’s product line is a key component of its Viability Plan. In 2010, the Company will launch four highly successful platforms: a new Jeep Grand Cherokee, a new Dodge Charger, a new Dodge Durango and a new Chrysler 300 (the most awarded car in automotive history since its launch in 2005). The Chrysler 300 launch will be followed by a new, bolder Dodge Charger and an all-new unibody Dodge Durango.

In 2008, Chrysler offered six vehicles with highway fuel economy of 28 miles per gallon or better. For 2009, 73 percent of Chrysler LLC’s vehicles show improved fuel economy compared with the prior year’s model. Fuel economy will continue to improve in 2010 with the introduction of the all-new Phoenix V-6 engine, which will provide fuel efficiency improvements of between 6 to 8 percent over the engines it replaces. A two-mode hybrid version of the Company’s best-selling vehicle, the Dodge Ram is scheduled for 2010. The first Chrysler electric-drive vehicle is also scheduled to reach the market in 2010. It will be followed by other electric-drive vehicles, including Range-extended Electric Vehicles, in the following years in order to further reduce fuel consumption.

The proposed Fiat alliance would further help the Company achieve these standards as Chrysler gains access to Fiat’s smaller, fuel-efficient platforms and powertrain technologies. The alliance would enable Chrysler to reduce its capital expenditures while supporting the company’s commitment to develop a portfolio of vehicles that support the country’s energy security and environmental objectives.

Restructuring Actions
Chrysler LLC has aggressively restructured operations to significantly improve cost competitiveness while improving quality and productivity. Through year end 2008, Chrysler has:

* Reduced fixed costs by $3.1 billion
* Reduced its work force by 32,000 (a 37 percent reduction since January 2007)
* Eliminated 12 production shifts
* Eliminated 1.2 million units (more than 30 percent) of production capacity
* Discontinued four vehicle models
* Disposed of $700 million in non-earning assets
* Improved manufacturing productivity to equal Toyota as the best in the industry as measured by assembly hours per vehicle according to the Harbour Report
* Achieved lowest warranty claim rate in Chrysler’s history
* Recorded the fewest product recalls among leading automakers in 2008

The following additional restructuring actions are planned in 2009:

* Reduce fixed costs by $700 million
* Reduce one shift of manufacturing
* Reduce total manpower by 3,000 people
* Discontinue three vehicle models
* Take out 100,000 units of capacity
* Sell $300 million additional non-earning assets

Management Concessions
Chrysler will fully comply with the restrictions established under section 111 of EESA relative to executive privileges and compensation. In addition, the Company has suspended the 401k match, incentive bonuses, merit increases and has eliminated retiree life insurance benefits.

Dealer Concessions
Chrysler will achieve cost savings/improved cash flow through a number of initiatives including: reduced dealer margins, elimination of fuel fill, reduction of service contract margins.

Union Concessions
The signed term sheets for the UAW Labor Modifications and VEBA modifications fundamentally comply with the requirements set forth in the U.S. Treasury Loan and once realized would provide Chrysler with a work force cost structure that is competitive with the transplant automotive manufacturers.

Supplier Concessions
The Company has initiated the dialogue with its suppliers and believes that it will be able to obtain substantial cost reductions from suppliers that will result in achieving targeted savings. Chrysler supports the supplier associations’ proposals, which would provide a government guarantee of OEM accounts payables.

2nd Lien Debt Holders Concessions
Chrysler anticipates that the holders of the 2nd Lien Debt will agree to convert 100 percent of their debt to equity. Chrysler’s Viability Plan includes expectations to further reduce its outstanding debt by $5 billion. In addition to strengthening the Company’s balance sheet for the long term, this reduction will also provide immediate cash flow via interest savings of between $350 million and $400 million annually.

This is good news for both companies. Chrysler is believed to be in the worst shape out of all the Big Three. Fiat, which hasn’t sold vehicles on American soil in decades, could make a successful comback to North America with either their own models or rebranded Chrysler products. According to World Car Fans (via Wall Street Journal): “The terms of the deal do not require Fiat to pay any cash to Chrysler right away. Instead, Fiat will receive equity in Chrysler for investments it will make in retooling a Chrysler plant to produce Fiat models for the US market. Fiat may reach its intended 35 percent stake by the middle of the year.”

This Friday, December 19th, will be the last day all of the 30 Chrysler assembly plants will be open until mid January. News came this past Wednesday that due to no bailout plan and worsening financial crisis in the automotive world Chrysler decided to take a full month off from production. Employees have been asked to not return until January 19th, 2009.

The company usually shuts down operations between December 24 and January 5 for the holidays. Closures such as this normally run two weeks. This is the first time Chrysler closes for a month. Chrysler Financial has tightened lending terms for buyers and announced it would no longer offer leases. Yikes…

Canadian officials wanted to see how the United States bailout plan would work out, but with the recent vetoes and turn downs it was time to act. According to The Detroit Free Press, about 30,000 people are employed by Big 3 assembly plants in Ontario. Thousands more work in the supplier industry for those companies. So, is it now up to other countries to help the struggling American auto industry stay afloat?

It’s a consideration both sides are thinking about, since the Senate likes the idea of giving a fixed sum to one entity instead of two separately. Senator Bob Corker was quoted as saying “Our country cannot really deal with three separate US automakers.” A merger could save up to $10 Billion a year in financial loans. Chrysler better not think too hard – Wall Street Journal recently reported that Chrysler hired Jones Day bankruptcy firm for a consultation. Tough times still to come.

Chrysler is in last place when it comes to asking Congress (again) for money – as they came in behind GM and Ford with a restructuring plan to help them though the next two years. The $11 billion will be used to produce “seven to nine” new models but have yet to confirm what those models actually are. Chrysler has been touting their EV electric car line up at the auto shows, but those only consist of three vehicles (Chrysler EV minivan, Jeep EV and Dodge Sport EV). Chrysler CEO Bob Nardelli, like the Ford and General Motors owners, has pledged to work for only $1 and take no health/insurance benefits.

Chrysler may have to drastically cut their production by January of these funds are not put into action. As for the pay back? 2012 is the date when the loan return must begin – we’d hate to see the interest on that number. For Chrysler’s sake let’s hope the Mayans were right.

Strike 1 – Assembly Line Closures & Job Cuts

Today, Chrysler announced they would cut 5,000 salary and contract labor positions amidst talks of the General Motors takeover. Job loses will include 1,825 assembly line workers at Chrysler’s Newark, Del. plant and their Jeep line in Toledo, OH. These cuts will be followed by possible future plant closures. The cuts will take effect as of December 31st of this year.

Strike 2 – Nose-diving Sales & Production Cuts

Chrysler has suffered a huge nose dive in sales thanks to everything from poor band designs, to a struggling financial situation in our country, to the roller coaster effect on gas prices. Hybrid technology vehicles are being put on hold, while larger trucks and SUV’s like the Durango will be slashed in the near future. Chrysler plans to come back into the hybrid game by 2010, though by then GM may have most of their similar models put to a stop.

Sssssstttttttrrrrrrrike 3, You’re Out! – Hostile Takeover & Merging Models

Yes, it is still a rumor, but GM and Chevrolet have apparently spilled some of the beans about their merger plans, which would include GM keeping Jeep brands and Chrysler’s minivan line, while completely getting rid of any similar Chevy/Dodge models (ie: the new Dodge Charger could be lost and replaced with more Camaro productions). In fact, Dodge may become a product of the past, if GM has their way. In all, it looks pretty bad for Chrysler, but much like the World Series finalists Rays, it’s not over until the last fly ball is caught.