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Business as Usual at Chrysler Australia

May 4th, 2009
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It’s business as usual at Chrysler Australia after Chrysler LLC overnight announced a proposed strategic alliance with Fiat SpA and filed for protected restructuring, under Chapter 11 of the United States bankruptcy provisions, as part on-going organisational changes. Chrysler’s international operations are not part of any bankruptcy filing, including Australia and New Zealand.

Chrysler Australia will continue to provide quality motor vehicles, parts and services to Australian consumers under the Chrysler, Jeep®, Dodge and Mopar parts brands through the current network of dedicated and professional authorised dealers.

“Australian customers can rest assured that it’s business as usual for Chrysler Australia. We are a solid, profitable business and here to stay” assured Gerry Jenkins, Managing Director – Chrysler Australia.

“Despite the global economic challenges and the downturn in vehicle sales in most countries, we are one of the top international markets for Chrysler, and are the leading right-hand drive market in the world” added Jenkins.

The global strategic alliance announced with Fiat SpA will form a new company that allows both Chrysler and Fiat to fully optimise their respective manufacturing footprints and the global supplier base, while providing each with access to additional markets. Fiat powertrains and components will also be produced at Chrysler manufacturing sites. In the future, the advantages of the new company will provide exciting new motoring options for Australian consumers.

"This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages,” said Bob Nardelli, Chairman and CEO of Chrysler LLC.

“It enables us to better serve our customers and dealers with a broader and even more competitive line-up of environmentally friendly, fuel-efficient high-quality vehicles. Benefits to the new company include access to exciting products that complement our current portfolio, technology cooperation and stronger global distribution."

In order to realise its plans with Fiat and other operational goals, Chrysler LLC has elected to file voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code, with the full support and direction of the US Treasury. Chrysler LLC and 24 of its wholly-owned U.S. subsidiaries are included in the filing, but no international operations are affected.

“Locally, we don’t expect to see any impact from the Chapter 11 proceedings,” Jenkins explains.

“The term ‘bankruptcy’ means different things from country to country, and it’s important to understand that this Chapter 11 filing does not mean Chrysler is going to disappear. Rather, it is a positive step forward in the on-going improvement of the Chrysler organisation.”

Chrysler will also file a motion under Section 363 of the Bankruptcy Code requesting the swift approval by the Court of the agreement with Fiat and the sale of Chrysler’s principal assets to the new company. The benefit of this type of filing is speed. It should allow a leaner new company to emerge in a matter of 30 to 60 days, well positioned for long-term viability.

“After months of speculation, the path forward for our parent company is now clear. A new company will emerge in just 30 – 60 days that is lean and well-structured to meet the current and future demands of our customers in Australia and New Zealand” declared Jenkins.

“I’m very excited about the opportunities provided by the strategic alliance with Fiat and the other changes within our business. I’ve been with Chrysler for 30 of its 80-year history, and the future has never looked brighter” Jenkins adds.


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