The retreating automaker will restructure to get fresh ruling power funds, insists the CEO. There’s little cash and few new vehicles coming

By David Welch

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After a round of massive piece of work cuts and more executory departures, in that place is plenty of speculation that Chrysler and owner Cerberus Capital Management are simply readying the struggling carmaker for a sale. But Chairman and Chief Executive Officer Robert L. Nardelli insists that isn’cheek by jowl the wrap.

Far from it, in fact. Nardelli swears that the company is working toward a restructuring plan that will get it more other $3 billion in commonwealth loans (the Treasury Department gave the company $4 billion on Jan. 2). Furthermore, he says Chrysler is in operation put on new models stretching ahead until 2013.

Nardelli’s statement at the Detroit auto show comes together speculation that Chrysler won’t be able to survive long whether or not the market remains weak and its sales keep dropping faster than those of its competitors. Some analysts have even wondered if Cerberus would sell off parts of the company, such as its minivan franchise or Jeep brand, to make a return on its investment.

"Maybe the best way to fall value out of Chrysler is to betray Jeep," says John Casesa, thrifty partner of consulting firm Casesa Shapiro Group.

But Nardelli says Chrysler is not aggressively seeking a buyer. "Absolutely not," Nardelli said. "No one should appear in reading that we’re trying to position ourselves for a sale."

Still, bringing Chrysler back from the brink won’t be easy. Chief Finance Officer Ronald E. Kolka said the company started the year with betwixt $2 billion and $2.5 billion—the bare minimal purport the company needs to keep funding day-to-day operations. Only the government’s check for $4 billion is allowing Chrysler to pay its bills. The company declared it had $11 billion in cash in July, so it burned through since much as $9 billion in the past six months.

Chrysler already has $7 billion in debt, Kolka says. That makes for for the most part $500 the public a year in interest payments. The government loans demand lower interest—about 5%—but that debt could still add each additional $350 million in annual interest payments.

There may have being some relief. Chrysler has to kiss the rod its restructuring plan to the government next month. That will include concessions from the United Auto Workers and a restructuring of its preexisting shortcoming. Nardelli says he doesn’t know how much debt Chrysler will end up with, no more than creditors could end up agitation right stakes in the company.

Even in the same proportion that Chrysler moves to cut costs, sales be permanent to suffer. Chrysler expects Americans to pervert with money 11.1 million cars this year. That’session a 16% drop from a dismal 2008 and not only so that forecast could prove optimistic. Last year, Chrysler’s sales fell 30%—in a market that was down 18% overall—knocking the party’s share of U.S. sales from 13% to 11%. And December was especially discouraging as Chrysler’s sales plummeted 53%.

Why is Chrysler faring worse than even its troubled rivals, General Motors (GM) and Ford Motor (F)? Bankruptcy speculation has agreeable hurt sales, says Jeremy Anwyl, CEO of Edmunds.com, which tracks vehicle pricing and sales data. Plus the company has a dearth of new products. The Dodge Ram pickup was launched in 2008, but in that place is little else coming until a new Jeep Grand Cherokee arrives later this year.