Chrysler And Bankrutpcy, Is This Possible?
I’ve said previously that Chrysler LLC’s ability to stay independent wouldn’t 
last. After all, the company is too dependent on North American sales and weathering the current crisis alone looks to be a near impossible feat.
In April, Nissan and Chrysler announced a deal whereby Chrysler would provide the platform for the next generation Titan truck, while Nissan would build a small car for Chrysler to sell stateside. I theorized then that this was the start of an eventual Renault-Nissan-Chrysler alliance and I’m sticking to my guns with that.
Now comes word that Chrysler LLC CEO Bob Nardelli has warned employees that industry-wide U.S. sales in June are expected to fall to the lowest level in 16 years. Not too much of a surprise, given that Chrysler especially is overly dependent on big vehicles. A few bright spots like the Dodge Journey, Dodge Caliber, and Jeep Compass are available, but Chrysler LLC just doesn’t have the product line to retool as quickly as Ford or GM.
Cerberus Capital Management is the owner of Chrysler, and although the company hasn’t stripped Chrysler as some had feared, they’re probably looking to flip the company as soon as an opportunity comes up.
Since Chrysler is now a private company, it is difficult to gauge just how bad the bleeding is right now. The company does have cash on hand but that money may not be able to sustain the company in a market where $4 per gallon is the norm. My thinking is that Chrysler will be racing through cash at a rate much faster than expected making it impossible for the company to tap cash to retool.
In my not so business analysis of the company I will say this — no suitor may be interested in Chrysler LLC in the position it finds itself in now. If gas prices should continue to rise, I expect that the only alternative for Chrysler will be bankruptcy, a once unthinkable option, but perhaps the only way Chrysler will survive apart from being purchased outright.
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