Bob Nardelli, just 14 months into his tenure as CEO of Chrysler, now fears the collapse of an “extremely fragile” auto industry amid the credit crisis and Wall Street meltdown.
Nardelli said federal officials, preoccupied with trying to unfreeze credit, don’t appreciate the importance of the auto industry.
“You start to see the global collapse of the auto industry where strong, dominant international players are really feeling it in their home market,” he told Automotive News last week. “We thought the $4-a-gallon gas was going to be our biggest challenge, but that’s been minimized by the credit market.”
Nardelli’s comments came as shares of Detroit Three rivals General Motors and Ford Motor Co. cratered. GM closed at $4.89 on Friday, October 10, down from a 52-week high of $43.20. Ford ended at $1.99, off from a 52-week high of $3.34. On Friday, GM issued a statement saying it was not preparing to seek bankruptcy protection.
Nardelli said the auto industry faces unique federal regulatory burdens, such as increased fuel economy requirements.
“I’m not sure it’s registered at the highest levels the impact of losing the auto industry,” he said. “When I say the entire industry, it’s not only the OEMs; it’s the Tier 1, Tier 2, Tier 3” suppliers.
Nardelli said cash is “the No. 1 metric for the auto industry.” In Chrysler’s case, he said, “We’re concerned about it. We’re monitoring it, but we’re not on the edge.”