Bob Nardelli’s reaction to the news
This letter was sent to Chrysler employees:
Dear Employees:
We are all obviously disappointed in what transpired in the Senate last night. While a majority of Senate members supported the bridge loan request (52 in total, including 10 Republicans), the required 60 votes necessary were not achieved. While concessions from all key constituents were a condition of the loan, attempts to negotiate specific industry cost concessions during Senate consideration failed, leading to the breakdown.
Despite this setback, we will continue to make our case in Washington that an immediate, short-term bridge loan is critical for Chrysler to survive the current financial crisis and is just as important to the health of the overall American economy. We also will continue our discussions with the White House and with the Treasury Department, and will continue to seek funding options for Chrysler and Chrysler Financial through existing programs including the Troubled Assets Relief Program (TARP).
To that end, we were pleased to see the commitment from the White House in the following statement released today:
“It is disappointing that while appropriate and effective legislation to assist and restructure troubled automakers received majority support in both houses, Congress nevertheless failed to pass final legislation. The approach in that legislation provided an opportunity to use funds already appropriated for automakers, and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds go only to firms whose stakeholders were prepared to make the difficult decisions to become viable, competitive firms in the future.
Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary – including use of the TARP program — to prevent a collapse of troubled automakers. A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.
While the federal government may need to step in to prevent an immediate failure, the auto companies, their labor unions, and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable.”
I also want you to know that we are in on-going discussions with the presidential transition team, and key members of the incoming administration are aware of the importance of addressing the short-term and long-term viability of our industry and our company.
All of us can help with these efforts. First and foremost, we must eliminate every unnecessary cost in every aspect of our business. While a bridge loan is critical to manage through this financial crisis, we must continue to manage the factors under our control. Continued cost reduction is important to ensure the future viability of the company. At the same time, let’s not forget that we have a solid plan for recovery and viability, great products in our pipeline and the most dedicated people in the business. Let’s all maintain our commitment to each other to work toward a great future for our Company.
I also would encourage every U.S. employee to take a minute today and call the White House comment line at (202) 456-1111, or send a note to the White House at comments@whitehouse.gov. Voice your support for immediate action to assist Chrysler and the millions of Americans who depend on the automotive industry. Urgent action is needed to prevent the failure of this important industry that provides $293 billion in annual economic benefit to this country. Please tell your friends and family to do the same. Together, we will make our voices heard.
Thank you for your continued support.
Bob
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