We are deeply appreciative for President Obama’s strong commitment and support of the American auto industry and its employees. Like him, we firmly believe that the best days of America’s auto manufacturers — including Chrysler — lay ahead. GM remains focused on accelerating the speed of its operational restructuring and reducing the liabilities and debt on its balance sheet. We look forward to working with the President’s Auto Task force to do so and are committed to transparent reporting of our restructuring every step of the way.
[The] announcement that Chrysler is filing for Chapter 11 bankruptcy is an important development during this unprecedented period for the auto industry and the global economy.
Our teams are monitoring the situation and have been working hard for months to ensure that the external environment and industry restructuring do not slow progress on our Ford transformation plan, which remains solid and unchanged.
Importantly, we share President Obama’s hope that Chrysler’s bankruptcy will be controlled and quick, while we continue planning for all contingencies as a prudent business measure. Our industry is highly interdependent, and the health of the supply base and dealer network is critical for all automakers. Ford appreciates that the U.S. Automotive Task Force is focused on the stability of the supply chain and is committed to ensuring that a healthy U.S. auto industry emerges from this difficult economic period.
At this time, we do not expect any disruptions to our operations as a result of today’s news.
All of us at Ford remain absolutely committed to continuing to make progress on our transformation plan. Our greatest opportunity is to create ONE Ford, leveraging our global assets and delivering more high-quality, fuel efficient vehicles that customers want and value.
The office of Canadian Prime Minister Stephen Harper issued the following statement, which it said was a joint statement with U.S. President Barack Obama:
The Governments of the United States and Canada, have reviewed and approved the restructuring plans of Chrysler LLC and its subsidiaries, including Chrysler Canada Inc.
As a result, thanks to the considerable contributions and sacrifices of company management, the United Auto Workers and Canadian Auto Workers, and major lenders, and a successful partnership agreement with Fiat SpA, our Governments are in a position to extend support to help Chrysler restructure itself and reemerge as a globally competitive automaker.
"We appreciate the close and cooperative relationship between the U.S. and Canadian governments during this period of restructuring in the auto industry. Together, we have put in place a financing package that will give Chrysler a chance to achieve financial viability," said President Obama.
"I want to thank President Obama and the U.S Automotive Task Force for their close cooperation with Canada on this challenging issue. Thanks to our joint efforts, there is now a road ahead to a stronger Chrysler and a stronger industry in the future on both sides of the border," said Prime Minister Harper.
The Governments will provide US$10.5 billion in financing, including short-term and medium-term capital and debtor-in-possession financing to assist with the court-supervised restructuring of Chrysler LLC. Of this amount, the United States is contributing US$8.08 billion and Canadian governments (including the Government of Canada and Government of Ontario) US$2.42 billion.
The United States will have 8 percent of the equity of the restructured Chrysler LLC, and Canada and Ontario will have 2 percent. The United States will appoint four independent directors to the new Chrysler LLC board, while Canada will appoint one independent director.
The following is a statement from the Chairman of the National Automobile Dealers Association (NADA), John McEleney, in response to the Chrysler bankruptcy:
“Bankruptcy is not the preferred option, but we have every expectation that Chrysler and its dealers will emerge stronger and more competitive than ever. We’re pleased to hear of the announced merger with Fiat which should help speed up Chrysler’s restructure. It’s important to point out that Chrysler will continue to honor all warranties and that Chrysler dealers will work with all parties concerned and, most importantly, will make sure that their customers are taken care of.
Bankruptcy, however, must not be used to drastically reduce dealer numbers. Dealers generate more than 90 percent of manufacturer revenue and are not a cost to the automaker. A rapid reduction in dealer numbers would not only do absolutely nothing to improve Chrysler’s viability in the short term, but it would actually work against Chrysler’s stated objective to increase revenue and cut costs.
Chrysler’s bankruptcy is especially disappointing. Like so many others, we were hopeful that all of the stakeholders would be able to reach agreement, and Chrysler’s restructuring could move forward out of court. The key now is to get in and get out of bankruptcy as quickly as possible. Since NADA represents all dealers both domestic and international our concern is to minimize disruption to the entire auto industry. In other words, the shorter the bankruptcy, the better for the entire industry both domestic and international.”
