Essay on Chrysler's Struggles

5204 Words 21 Pages

The Struggle of Chrysler

Valerie Steinmetz

Pete Rohlman

Kelly Jane McLaughlin

Cardinal Stritch University

College of Business and


Rich Bruce, Instructor

Business Communication

January 28, 2010

Over the past ten years, America has had many historic moments. With planes flying into the World Trade Center to the election of our first African-American president, the American public has had much to be excited about and to fear. In more recent history, the American economy has been the main topic. From the Fall of Wall Street, crashing of the housing market, to the fall of the American Automakers. The government has stepped in to save
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In 1998, Chrysler was acquired by Daimler-Benz of Germany and spent the next eight years as a part of Daimler Chrysler. (Maynard, 2009)

Daimler’s inconsistent financial results and pressure from German shareholders prompted them to seek a buyer in 2007. It sold the company to Cerberus Capital Management, an investment fund, which installed Robert L. Nardelli as its chief executive. Nardelli was the former chief executive of Home Depot. Nardelli vowed that Chrysler would make a comeback as an American-owned company. Unfortunately the automaker was battered by a sales slump as a recession took hold. (Maynard, 2009)

In late 2008, Chrysler joined General Motors in seeking assistance from Congress. Congress rejected the company’s bid, forcing the Bush administration to step in with a financial lifeline. In January 2009, Chrysler announced it had reached a tentative deal with Fiat, the Italian automaker. In March, President Obama gave the companies 30 days to conclude the transaction. (Maynard, 2009)

This culminated in a restructuring plan with Fiat taking a major role in the company’s management. The United Automobile Workers (UAW) and major lenders agreed to concessions. The Obama administration was unable to get support from all of the bondholders for the plan. This lead to Chrysler filing for bankruptcy on April 30, 2009. (Maynard, 2009)

At the end of January

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