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Cerberus confident despite Chrysler's financial problems

Cerberus Capital Management, Chrysler's new owner, expressed confidence about the automaker's future on Friday after its chief executive said it was "operationally" bankrupt.

"We remain extremely enthusiastic about our investment in Chrysler," Cerberus chief operating officer Mark Neporent said in a statement.

"Our underwriting assumed, and fully planned, that Chrysler would incur losses in the near term," Neporent said.

He also said that under the company's new leadership team, "Chrysler is already on track to exceed its multi-year restructuring and recovery plan on virtually all key metrics."

The statement came after The Wall Street Journal reported that Chrysler chairman and CEO Robert Nardelli, who was appointed in August, told employees at a meeting this month that the company was "operationally" bankrupt.

"Someone asked me, `Are we bankrupt?'" Nardelli said at the meeting, according to the Journal, which said that the chief executive confirmed the account.

"Technically, no. Operationally, yes. The only thing that keeps us from going into bankruptcy is the 10 billion [US dollars] investors entrusted us with," the Journal cited Nardelli as telling the meeting.

Cerberus also gave a vote of confidence to Nardelli and vice chairmen James Press and Tom LaSorda.

"We met with the management team this week and fully endorse their strategic direction and their plan to meet the challenges of the current environment," Neporent said.

"We are confident that Bob, Jim and Tom are taking the right steps to bring Chrysler to profitability. Our mutual resolve to restore Chrysler to its leadership position as an iconic brand is unwavering," he said.

Cerberus acquired the US automaker from Germany's DaimlerChrysler in August for US$7.4 billion.
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