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Chrysler May Not Survive This Year

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By TOM KRISHER and KEN THOMAS

The Associated Press

Published: January 8, 2009

DETROIT - Even by the standards of battered automakers, Chrysler is in dire shape.

Its sales in December were down a stunning 53 percent, far worse than Ford or General Motors, and analysts say it probably won't survive the year as an independent company - despite $4 billion in government loans and the possibility of more.

Things were so bad last year that a single Toyota model, the Camry/Solara midsize car, outsold the entire fleet of Chrysler LLC's passenger cars.

"Basically they're done," said Aaron Bragman, an auto analyst with the consulting company IHS Global Insight in Troy, Mich. "There is no real possibility of turning this thing around as an independent company in my opinion."

U.S. sales of Chrysler, Dodge and Jeep brand vehicles fell 30 percent last year, the worst decline of any major automaker. It lost more market share than any of its peers, down to 11 percent.

Analysts say an acquisition by General Motors Corp. is still possible. The two companies discussed it late last year before GM backed away.
Nissan Motor Co. could be interested in buying Chrysler's truck business.

When automakers went to Washington late last year, their aim was to get enough money to become viable again. They wound up with only enough help from the Bush administration to get them through March.

To get the loans, GM and Chrysler had to agree to negotiate concessions from creditors and the United Auto Workers union, but the specifics have yet to be worked out. The government can call in the loans March 31.

Chrysler CEO Robert Nardelli, in a presentation to the Senate Banking Committee last month, said the company could stay alive in the long term with reasonable concessions, a $7 billion bridge loan and $6 billion more out of the $25 billion Congress allocated to develop new fuel-efficient technology.

The Bush administration provided a $4 billion loan. Now, Chrysler is counting on an additional $3 billion in aid for its financing arm, Chrysler Financial.

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