Wednesday, May 27, 2009
Tuesday, May 5, 2009
A GM bankruptcy kills warranties
With bankruptcy for General Motors seeming more likely every day, has anyone stopped to consider the manufacturer's warranty issue?
As it stands now, the U.S. Treasury is guaranteeing GM warranties to consumers. That's all well and good, but actually getting your vehicle serviced will require going to your local GM dealership for service, assuming it is willing to work on your vehicle at all.
With a GM bankruptcy, we dealers become unsecured creditors who will be getting in line with everyone else to collect our receivables. The problem is the dealers will be just about the last in line. That means the hundreds of thousands of dollars we all have in factory receivables may or not get paid.
If the money does get paid, payment could be painfully slow. Our working capital could be consumed, and we would no longer be able or willing to perform warranty repairs.
In that case, the U.S. Treasury's protecting consumer warranties does no good because there will be no dealers willing to repair the vehicles.
Hasn't anyone thought of that? The GM franchise system could fall apart in days.
As it stands now, the U.S. Treasury is guaranteeing GM warranties to consumers. That's all well and good, but actually getting your vehicle serviced will require going to your local GM dealership for service, assuming it is willing to work on your vehicle at all.
With a GM bankruptcy, we dealers become unsecured creditors who will be getting in line with everyone else to collect our receivables. The problem is the dealers will be just about the last in line. That means the hundreds of thousands of dollars we all have in factory receivables may or not get paid.
If the money does get paid, payment could be painfully slow. Our working capital could be consumed, and we would no longer be able or willing to perform warranty repairs.
In that case, the U.S. Treasury's protecting consumer warranties does no good because there will be no dealers willing to repair the vehicles.
Hasn't anyone thought of that? The GM franchise system could fall apart in days.
Ford Fusion and Milan hybrids garner top safety pick
Ford announced this morning that its all-new Fusion and Mercury Milan hybrids were named a top safety pick by the Insurance Institute for Highway Safety.
The company credits the use of high-strength, light weight steel in the cars' frames as one of the reasons for the high marks.
Safety in hybrid vehicles create an interesting problem for engineers. One of the most important things during the design of these kinds of vehicles is cutting weight. The more pounds you lose, the greater the potential for higher mileage. I was recently testing the Fusion hybrid, and without trying, I managed 43 mpg on the highway. (This is better than the EPA numbers of 41 mpg city and 36 mpg highway.)
Currently, Ford has more IIHS top safety picks than any other carmaker -- something that I doubt most people know.
The company credits the use of high-strength, light weight steel in the cars' frames as one of the reasons for the high marks.
Safety in hybrid vehicles create an interesting problem for engineers. One of the most important things during the design of these kinds of vehicles is cutting weight. The more pounds you lose, the greater the potential for higher mileage. I was recently testing the Fusion hybrid, and without trying, I managed 43 mpg on the highway. (This is better than the EPA numbers of 41 mpg city and 36 mpg highway.)
Currently, Ford has more IIHS top safety picks than any other carmaker -- something that I doubt most people know.
Ford's image improves, study finds
Americans' perception of Ford Motor Co. has improved because of the automaker's decision not to ask Washington for financial aid, according to an independent study conducted by the Aloft Group Inc.
The brand consulting firm found that 63 percent of U.S. consumers now have a "positive perception" of Ford, compared to 41 percent before its domestic rivals, General Motors Corp. and Chrysler LLC, asked the federal government for bridge loans last fall.
"The fact that Ford did not take government loan money appears to have had a significant positive impact on how consumers perceive the Ford brand," said Matt Bowen, the firm's president and CEO. "Changing consumers' perception of a brand is typically a slow and uphill process. This is very unusual in that this positive brand perception upswing occurred in a relatively short time frame and under intense global scrutiny of the auto industry. This could considerably impact Ford's long term brand value."
The Aloft study also found that 33 percent of those surveyed said they "are more willing to consider buying a Ford since Ford chose to not take the bailout money."
But 24 percent believed that Ford does not actually need federal money.
Aloft conducted the online survey from Apr. 25-29 to better understand the impact of government intervention into the private sector on brand image. Its error margin was 5.3 percentage points.
"Recent economic events are unprecedented in the context of modern marketing and, as an agency that focuses on both domestic and international brand work, we are dedicated to understanding the effects that these events have had on brand perceptions, especially regarding some of America's oldest, blue chip brands such as Ford," Bowen said.
The brand consulting firm found that 63 percent of U.S. consumers now have a "positive perception" of Ford, compared to 41 percent before its domestic rivals, General Motors Corp. and Chrysler LLC, asked the federal government for bridge loans last fall.
"The fact that Ford did not take government loan money appears to have had a significant positive impact on how consumers perceive the Ford brand," said Matt Bowen, the firm's president and CEO. "Changing consumers' perception of a brand is typically a slow and uphill process. This is very unusual in that this positive brand perception upswing occurred in a relatively short time frame and under intense global scrutiny of the auto industry. This could considerably impact Ford's long term brand value."
The Aloft study also found that 33 percent of those surveyed said they "are more willing to consider buying a Ford since Ford chose to not take the bailout money."
But 24 percent believed that Ford does not actually need federal money.
Aloft conducted the online survey from Apr. 25-29 to better understand the impact of government intervention into the private sector on brand image. Its error margin was 5.3 percentage points.
"Recent economic events are unprecedented in the context of modern marketing and, as an agency that focuses on both domestic and international brand work, we are dedicated to understanding the effects that these events have had on brand perceptions, especially regarding some of America's oldest, blue chip brands such as Ford," Bowen said.
New Fusions blend perfect mix of ideas
Variety, craftsmanship give 2010 Ford Fusion best, most complete midsize lineup
It doesn't matter which 2010 Ford Fusion you pick, it's going to be good.
It could be the new Fusion Sport powered by Ford's 3.5-liter V-6. Or the overhauled base model Fusion that features a new 2.5-liter I-4 engine mated to a six-speed automatic transmission that adds power and fuel economy. Or it could be the high-tech hybrid version powered by Ford's "Run Silent, Run Clean" mantra and a gas-electric system that breaks 40 miles per gallon without exerting any effort.
Pick one or start your own personal stimulus program and pick them all, because Ford now has the most complete -- and best -- lineup in the midsize car segment.
That's right. It's better than the Honda Accord and even the top-selling Toyota Camry. It's not going to outsell those vehicles, but it should.
No carmaker offers as much depth in a single model in this segment as Ford. Variety aside, the craftsmanship throughout the Fusion beats the competition -- during a time when domestic carmakers pride themselves on merely matching it.
After spending three weeks in the Sport, Hybrid and base model Fusions, I found it hard to select a favorite. Each seemed like a different model instead of a variation of the same vehicle.
I know; I can't believe it either.
Naturally, I'll be accused of being a homer by everyone outside of Detroit (as everyone in the Motor City tends to call me a traitor), but it doesn't matter. The second-generation Fusions are excellent. Each has a distinct personality, provides solid performance and comes with interiors that have moved from "this is nice" to "whoa, this is niccceeee."
After a decade of depreciating expectations in the midsize sedan segment, Ford has nailed a vehicle that should raise hope in Dearborn.
Like most of the changes to the Fusion, it starts with the inside and works its way out.
Yes, Ford did add a power dome hood, changed out the front fascia and replaced the headlights and taillamps. (The silver trimmed triangles on the backside of the previous-generation Fusion looked more like a futuristic yield sign than a taillight.) But the exterior changes pale compared to the rest of the overhaul.
Engine responds superbly
First are the powertrains.
Ford brought the 2.5-liter four-cylinder engine into the Fusion family -- replacing the 2.3-liter engine in the previous generation. This workhorse powers the base model Fusion as well as the hybrid. In both cases (though it is tuned much differently depending upon the car), the engine responds superbly.
On the base model I tested, the 175 horsepower and 172 pound-feet of torque provided plenty of pep. Better yet, the six-speed manual made this car outright sporty. A well-kept secret is the manual four-cylinder Fusion. (Between you, me and the world, the four-banger manual is much more fun than the automatic V-6.)
Instead of relying on the six-speed automatic, which does provide the best gas mileage, the manual provides more excitement. (There's also a V-6 model Fusion using Ford's nearly bulletproof 3-liter Duratec 30 -- to which Ford managed to add 19 horses while increasing the engine's mileage.)
Of course, the Fusion Sport also features a new engine for the Fusion: The 3.5-liter V-6. In my all-wheel-drive test vehicle, the Fusion Sport was a hoot. It attacked corners. Acceleration was quick, and the car felt surprisingly light when throttling it harder than most midsize sedan customers might.
The electric power assisted steering on the 2.5-liter and 3-liter models feels natural and well-weighted. This steering, developed for the hybrid, goes on all of the cars expect the sport model, which uses a hydraulic steering system.
Ford also retuned the Fusion's suspension, tightening it up to provide a more exact ride. On the highway, the ride is smooth and quiet -- there were a number of adjustments to make the ride quieter, such as adding an acoustic windshield, thicker glass, hood insulators, improving the door seals and using new carpet. The improvements are noticeable on all the Fusion versions, if you have the wherewithal to notice what you don't hear.
And if you want a scary-quiet ride, hop into the hybrid that glides along a cushion of smugness worthy of its Japanese competitors. It can hit 47 mph on electric power only and drive more than 700 miles on a single tank of fuel.
The hybrid uses a plethora of technology to limit fuel use, reduce emissions and capture nearly 94 percent of the energy typically lost in braking, sending that juice back to the car's batteries.
The Smart Gauge, exclusive on the hybrid, combines an analogue speedometer and two digital screens to coach drivers into better performance without becoming pedantic.
Add to that real car dynamics and the Fusion hybrid can easily hold the title of best all-around hybrid on the road today.
Interior details improve
The other big improvement on the Fusion was Ford's attention to detail on the interior.
My Sport test vehicle arrived with a shocking blue interior -- almost too blue to be true -- and included all of the accoutrements you'd expect and a few you wouldn't.
Sync, Ford's infotainment system, continues to improve and remains the single best voice-operated, cell-phone working, iPod-playing, 911-dialing and optional navigation reading system available. Actually, when connected to Sirius Travel Link, it's even better than I make it out to be.
Ford added or refined even more features inside the cabin to make every driver, no matter which vehicle you pick, comfortable. The new instrument cluster looks much more sophisticated, and the dash has an easy flow. The touch points are soft, and every inch of the cabin uses high-quality materials. The Sport model includes a rubberized colored trim that is, gasp, fun.
From new seats to an unobtrusive blind spot detection system mounted on the outside mirrors, these Fords are ready to ride. The backup camera screen is logically hidden in the rearview mirror and disappears moments after you put the car in drive.
You can customize the interior lights, crank your customized play lists through 390 watts on the Sony branded stereo and breathe customized fresh air through the car's carbon air filter. Yes, this car caters to you, and it should, you're paying for it.
Ford has added new features to the Fusion and figured out ways to add features from its other vehicles without ever looking like it's showing off. There's no single piece I can point to that shows why this Fusion is so good, but rather it's the combination of all of these ideas that creates a machine greater than the sum of its parts.
Add them all up, and the Fusion is one of the best cars out, no matter what variation.
It doesn't matter which 2010 Ford Fusion you pick, it's going to be good.
It could be the new Fusion Sport powered by Ford's 3.5-liter V-6. Or the overhauled base model Fusion that features a new 2.5-liter I-4 engine mated to a six-speed automatic transmission that adds power and fuel economy. Or it could be the high-tech hybrid version powered by Ford's "Run Silent, Run Clean" mantra and a gas-electric system that breaks 40 miles per gallon without exerting any effort.
Pick one or start your own personal stimulus program and pick them all, because Ford now has the most complete -- and best -- lineup in the midsize car segment.
That's right. It's better than the Honda Accord and even the top-selling Toyota Camry. It's not going to outsell those vehicles, but it should.
No carmaker offers as much depth in a single model in this segment as Ford. Variety aside, the craftsmanship throughout the Fusion beats the competition -- during a time when domestic carmakers pride themselves on merely matching it.
After spending three weeks in the Sport, Hybrid and base model Fusions, I found it hard to select a favorite. Each seemed like a different model instead of a variation of the same vehicle.
I know; I can't believe it either.
Naturally, I'll be accused of being a homer by everyone outside of Detroit (as everyone in the Motor City tends to call me a traitor), but it doesn't matter. The second-generation Fusions are excellent. Each has a distinct personality, provides solid performance and comes with interiors that have moved from "this is nice" to "whoa, this is niccceeee."
After a decade of depreciating expectations in the midsize sedan segment, Ford has nailed a vehicle that should raise hope in Dearborn.
Like most of the changes to the Fusion, it starts with the inside and works its way out.
Yes, Ford did add a power dome hood, changed out the front fascia and replaced the headlights and taillamps. (The silver trimmed triangles on the backside of the previous-generation Fusion looked more like a futuristic yield sign than a taillight.) But the exterior changes pale compared to the rest of the overhaul.
Engine responds superbly
First are the powertrains.
Ford brought the 2.5-liter four-cylinder engine into the Fusion family -- replacing the 2.3-liter engine in the previous generation. This workhorse powers the base model Fusion as well as the hybrid. In both cases (though it is tuned much differently depending upon the car), the engine responds superbly.
On the base model I tested, the 175 horsepower and 172 pound-feet of torque provided plenty of pep. Better yet, the six-speed manual made this car outright sporty. A well-kept secret is the manual four-cylinder Fusion. (Between you, me and the world, the four-banger manual is much more fun than the automatic V-6.)
Instead of relying on the six-speed automatic, which does provide the best gas mileage, the manual provides more excitement. (There's also a V-6 model Fusion using Ford's nearly bulletproof 3-liter Duratec 30 -- to which Ford managed to add 19 horses while increasing the engine's mileage.)
Of course, the Fusion Sport also features a new engine for the Fusion: The 3.5-liter V-6. In my all-wheel-drive test vehicle, the Fusion Sport was a hoot. It attacked corners. Acceleration was quick, and the car felt surprisingly light when throttling it harder than most midsize sedan customers might.
The electric power assisted steering on the 2.5-liter and 3-liter models feels natural and well-weighted. This steering, developed for the hybrid, goes on all of the cars expect the sport model, which uses a hydraulic steering system.
Ford also retuned the Fusion's suspension, tightening it up to provide a more exact ride. On the highway, the ride is smooth and quiet -- there were a number of adjustments to make the ride quieter, such as adding an acoustic windshield, thicker glass, hood insulators, improving the door seals and using new carpet. The improvements are noticeable on all the Fusion versions, if you have the wherewithal to notice what you don't hear.
And if you want a scary-quiet ride, hop into the hybrid that glides along a cushion of smugness worthy of its Japanese competitors. It can hit 47 mph on electric power only and drive more than 700 miles on a single tank of fuel.
The hybrid uses a plethora of technology to limit fuel use, reduce emissions and capture nearly 94 percent of the energy typically lost in braking, sending that juice back to the car's batteries.
The Smart Gauge, exclusive on the hybrid, combines an analogue speedometer and two digital screens to coach drivers into better performance without becoming pedantic.
Add to that real car dynamics and the Fusion hybrid can easily hold the title of best all-around hybrid on the road today.
Interior details improve
The other big improvement on the Fusion was Ford's attention to detail on the interior.
My Sport test vehicle arrived with a shocking blue interior -- almost too blue to be true -- and included all of the accoutrements you'd expect and a few you wouldn't.
Sync, Ford's infotainment system, continues to improve and remains the single best voice-operated, cell-phone working, iPod-playing, 911-dialing and optional navigation reading system available. Actually, when connected to Sirius Travel Link, it's even better than I make it out to be.
Ford added or refined even more features inside the cabin to make every driver, no matter which vehicle you pick, comfortable. The new instrument cluster looks much more sophisticated, and the dash has an easy flow. The touch points are soft, and every inch of the cabin uses high-quality materials. The Sport model includes a rubberized colored trim that is, gasp, fun.
From new seats to an unobtrusive blind spot detection system mounted on the outside mirrors, these Fords are ready to ride. The backup camera screen is logically hidden in the rearview mirror and disappears moments after you put the car in drive.
You can customize the interior lights, crank your customized play lists through 390 watts on the Sony branded stereo and breathe customized fresh air through the car's carbon air filter. Yes, this car caters to you, and it should, you're paying for it.
Ford has added new features to the Fusion and figured out ways to add features from its other vehicles without ever looking like it's showing off. There's no single piece I can point to that shows why this Fusion is so good, but rather it's the combination of all of these ideas that creates a machine greater than the sum of its parts.
Add them all up, and the Fusion is one of the best cars out, no matter what variation.
Chrysler Ch. 11 filing said to be part of plan to seal Fiat deal
Obama says bankruptcy -- if necessary -- would be 'real quick'
DETROIT -- Chrysler LLC and Fiat S.p.A. are prepared to complete an alliance by Thursday that would be taken into bankruptcy court as a key element of the U.S. automaker's restructuring plan if needed, a person with direct knowledge of the situation said.
President Obama is planning to announce that Chrysler will file for Chapter 11 bankruptcy protection as it wraps up the Fiat deal, Bloomberg News reported. The Wall Street Journal said two versions of Obama's speech are being readied -- one if Chrysler files for protection and another if it avoids bankruptcy. The Washington Post said Chrysler CEO Bob Nardelli would be replaced by Fiat management under a bankruptcy plan being developed.
The Journal also reported that talks between the U.S. Treasury Department and a group of holdout lenders collapsed late Wednesday, making a Chrysler bankruptcy "all but certain." The paper cited people familiar with the matter.
Obama, in an address to the nation Wednesday night, said he's more hopeful than he had been that "a viable Chysler" can emerge from the crisis. He said it's not yet clear if Chrysler will have to file for bankruptcy -- and if it does "it will be real quick."
He spoke on the eve of Chrysler's government-imposed deadline to forge the deal with Fiat and secure concessions from the UAW and creditors in order to qualify for additional U.S. rescue loans.
The UAW late Wednesday ratified cost-cutting contract terms that would also cut in half the remaining cash portion of Chrysler's $10.6-billion obligation to a trust fund for retiree health care.
If some Chrysler lenders reject an offer from U.S. officials to take $2 billion in cash in exchange for debt, a Fiat-Chrysler deal would be part of the plan submitted to a bankruptcy judge, according to the source who spoke on condition of anonymity about the merger discussions.
A separate government source familiar with the negotiations said Chrysler will survive and avoid liquidation, but whether it will file for bankruptcy hasn't been determined. Chrysler spokesman Todd Goyer and a spokesman for Chrysler majority owner Cerberus Capital Management LP declined to comment.
Creditors
The Treasury Department has reached an agreement with Chrysler's largest creditors to cancel $6.9 billion of debt in exchange for $2 billion in cash. But the deal still must get unanimous approval from all the debt holders.
A person knowledgeable about the talks said Oppenheimer Funds, Perella Weinberg Partners and Stairway Capital are the holdouts. Oppenheimer declined to comment while spokespersons for the other two lenders didn't return phone calls.
The Michigan congressional delegation and the administration are in contact with the holdouts in an attempt to get them to reach a deal, this person said.
David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., estimated the likelihood of a Chrysler bankruptcy at 50-50.
"The higher the threat of death is, the more likely it can be worked out," he said. "The wild card is whether any of the remaining bond holders have taken out insurance policies that pay them in full if Chrysler fails. If anybody benefits more from a bankruptcy than from no bankruptcy, then you have a problem stopping it."
Cole said beyond the remaining bondholders, the Obama administration must still negotiate a deal with the dealers it insists Chrysler eliminate to avoid a bankruptcy. That is virtually impossible to do quickly with a large body of dealers, but if Obama's team can find a settlement pattern before the deadline -- cash or perhaps equity in Chrysler -- details could be worked out later, Cole said.
Douglas Bernstein, a partner at law firm Plunkett Cooney in Bloomfield Hills, Mich., said the automaker can't shed a large block of dealers without court protection.
"Chrysler still needs a bankruptcy filing," Bernstein said. Even if Chrysler reaches agreement with all its bondholders, it has to rely on a bankruptcy judge to cancel dealer franchises or face the prospect of years of dealer lawsuits in multiple states, he said.
Obama's update
In St. Louis earlier today, Obama said he was hoping a tie-up would be worked out but said he was not sure "if the deal is going to get done."
"We're hoping we can get a merger where the taxpayers will put in some money to sweeten the deal but ultimately the goal is -- we get out the business of building cars and Chrysler goes and starts creating the cars that consumers want," Obama said in a town-hall style meeting near St. Louis.
"We don't know yet whether the deal is going to get done," Obama said. "I will tell you that the workers at Chrysler have made enormous sacrifices -- enormous sacrifices -- to try to keep the company going.
"One of the key questions now is, are the bond holders, the lenders, the money people, are they willing to make sacrifices, as well? We don't know yet, so there's still a series of negotiations that are taking place."
Earlier, White House spokesman Robert Gibbs told reporters: "Hurdles still remain, but we remain optimistic and hopeful that something in the next many hours will get done that will provide a pathway for Chrysler's viability without continued government assistance." The automaker is surviving on $4 billion in U.S. loans.
Chrysler's Nardelli, in a letter to employees today, said the automaker continues to make progress in its efforts to complete the proposed alliance.
"If approved, it would clear a significant hurdle on our continuing journey toward long-term success, but the proposed agreement still needs to be approved by all of the secured lenders," Nardelli said in the memo.
DETROIT -- Chrysler LLC and Fiat S.p.A. are prepared to complete an alliance by Thursday that would be taken into bankruptcy court as a key element of the U.S. automaker's restructuring plan if needed, a person with direct knowledge of the situation said.
President Obama is planning to announce that Chrysler will file for Chapter 11 bankruptcy protection as it wraps up the Fiat deal, Bloomberg News reported. The Wall Street Journal said two versions of Obama's speech are being readied -- one if Chrysler files for protection and another if it avoids bankruptcy. The Washington Post said Chrysler CEO Bob Nardelli would be replaced by Fiat management under a bankruptcy plan being developed.
The Journal also reported that talks between the U.S. Treasury Department and a group of holdout lenders collapsed late Wednesday, making a Chrysler bankruptcy "all but certain." The paper cited people familiar with the matter.
Obama, in an address to the nation Wednesday night, said he's more hopeful than he had been that "a viable Chysler" can emerge from the crisis. He said it's not yet clear if Chrysler will have to file for bankruptcy -- and if it does "it will be real quick."
He spoke on the eve of Chrysler's government-imposed deadline to forge the deal with Fiat and secure concessions from the UAW and creditors in order to qualify for additional U.S. rescue loans.
The UAW late Wednesday ratified cost-cutting contract terms that would also cut in half the remaining cash portion of Chrysler's $10.6-billion obligation to a trust fund for retiree health care.
If some Chrysler lenders reject an offer from U.S. officials to take $2 billion in cash in exchange for debt, a Fiat-Chrysler deal would be part of the plan submitted to a bankruptcy judge, according to the source who spoke on condition of anonymity about the merger discussions.
A separate government source familiar with the negotiations said Chrysler will survive and avoid liquidation, but whether it will file for bankruptcy hasn't been determined. Chrysler spokesman Todd Goyer and a spokesman for Chrysler majority owner Cerberus Capital Management LP declined to comment.
Creditors
The Treasury Department has reached an agreement with Chrysler's largest creditors to cancel $6.9 billion of debt in exchange for $2 billion in cash. But the deal still must get unanimous approval from all the debt holders.
A person knowledgeable about the talks said Oppenheimer Funds, Perella Weinberg Partners and Stairway Capital are the holdouts. Oppenheimer declined to comment while spokespersons for the other two lenders didn't return phone calls.
The Michigan congressional delegation and the administration are in contact with the holdouts in an attempt to get them to reach a deal, this person said.
David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., estimated the likelihood of a Chrysler bankruptcy at 50-50.
"The higher the threat of death is, the more likely it can be worked out," he said. "The wild card is whether any of the remaining bond holders have taken out insurance policies that pay them in full if Chrysler fails. If anybody benefits more from a bankruptcy than from no bankruptcy, then you have a problem stopping it."
Cole said beyond the remaining bondholders, the Obama administration must still negotiate a deal with the dealers it insists Chrysler eliminate to avoid a bankruptcy. That is virtually impossible to do quickly with a large body of dealers, but if Obama's team can find a settlement pattern before the deadline -- cash or perhaps equity in Chrysler -- details could be worked out later, Cole said.
Douglas Bernstein, a partner at law firm Plunkett Cooney in Bloomfield Hills, Mich., said the automaker can't shed a large block of dealers without court protection.
"Chrysler still needs a bankruptcy filing," Bernstein said. Even if Chrysler reaches agreement with all its bondholders, it has to rely on a bankruptcy judge to cancel dealer franchises or face the prospect of years of dealer lawsuits in multiple states, he said.
Obama's update
In St. Louis earlier today, Obama said he was hoping a tie-up would be worked out but said he was not sure "if the deal is going to get done."
"We're hoping we can get a merger where the taxpayers will put in some money to sweeten the deal but ultimately the goal is -- we get out the business of building cars and Chrysler goes and starts creating the cars that consumers want," Obama said in a town-hall style meeting near St. Louis.
"We don't know yet whether the deal is going to get done," Obama said. "I will tell you that the workers at Chrysler have made enormous sacrifices -- enormous sacrifices -- to try to keep the company going.
"One of the key questions now is, are the bond holders, the lenders, the money people, are they willing to make sacrifices, as well? We don't know yet, so there's still a series of negotiations that are taking place."
Earlier, White House spokesman Robert Gibbs told reporters: "Hurdles still remain, but we remain optimistic and hopeful that something in the next many hours will get done that will provide a pathway for Chrysler's viability without continued government assistance." The automaker is surviving on $4 billion in U.S. loans.
Chrysler's Nardelli, in a letter to employees today, said the automaker continues to make progress in its efforts to complete the proposed alliance.
"If approved, it would clear a significant hurdle on our continuing journey toward long-term success, but the proposed agreement still needs to be approved by all of the secured lenders," Nardelli said in the memo.
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