A year after emerging from bankruptcy, Chrysler CEO Sergio Marchionne said he felt confident about the company’s future and announced the addition of 1,100 new jobs at an assembly plant going back more than century.
“This is a signature vehicle for Chrysler,” Chrysler and Fiat chief Sergio Marchionne told reporters on Friday, as the automakers showed off the 2011 Grand Cherokee, the company’s first new vehicle in nearly a year.
“I don’t worry about the world economy,” Marchionne said when asked about chances that economic troubles in Europe could undermine the US economic recovery, which Chrysler is counting on too boost sales.
PHOTO: REUTERS
The new Grand Cherokee features an all new V6 engine that gets 9.8km per liter on the highway.
Marchionne also said after the official launch ceremony, which drew a host of exuberant local politicians, that Chrysler has ample orders to support the production on a second shift.
“We have enough orders,” said Marchionne, adding that part of the production would be exported around the world through Fiat’s distribution network.
“Based on what I see now, I don’t see any reason why we should not go public [next year],” he said.
“But don’t ask me which month,” Marchionne added.
Chrysler is also looking at ways to refinance the other part of the loans from the US Treasury that rescued the automaker from bankruptcy one year ago. But it’s very complicated matter, Marchionne said.
“They were designed to provide long-term relief to Chrysler. So before we shut down the financing source, we better be sure about what we’re doing,” he said.
However, the debt is very expensive for Chrysler, he added.
In other news, the US Treasury Department has hired Lazard Freres & Co as its adviser to prepare for an initial public stock offering (IPO) by General Motors Co (GM).
The Treasury signed the agreement on Monday but did not reveal it until Friday.
The agreement said that the New York-based investment bank would analyze and review alternatives for the government’s ownership stake, including giving advice on the use of “underwriters, brokers or other capital market advisers for the best means and structure to dispose of such assets.”
The United Auto Workers had used Lazard Freres to evaluate GM’s books before contract talks in 2007. Lazard Freres told the union that GM’s economic situation was worse than the company was maintaining.
The Treasury owns 61 percent of GM. The IPO would allow the government to begin recouping its investment. GM CEO Ed Whitacre has said he expects an IPO late this year or early next year.
To keep GM afloat and get it through bankruptcy court, the US government gave the company US$50 billion. GM repaid US$6.7 billion that the government considered loans. The remaining US$43.3 billion was converted to the 61 percent stake.
On Monday, GM’s chief financial officer Chris Liddell, who was hired recently from Microsoft Corp, said an IPO could occur over the next 12 months if things fell into place.
“Certainly over the next year, there’s a possibility we could do an IPO, but the market’s got to be ready, the automobile industry has to continue to improve and we have to continue to improve,” Liddell said.
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