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Senator: Chrysler Shouldn’t Get Money If It’s For Sale

Government shouldn't lend money to Chrysler because it would just be funding the automaker so it can stay in business until its private owners can sell it, says a U.S. senator.

DETROIT (AP) -- A U.S. senator is questioning whether the federal government should loan money to Chrysler LLC, saying that the cash would just keep it in business long enough to be sold.

Sen. Bob Corker, R-Tenn., a critic of the industry, said Thursday during a Senate Banking Committee hearing in Washington that Chrysler's private equity owner won't put any more money into the business and intends to sell it.

By loaning Chrysler the $7 billion it requested, the government would just be providing capital to keep the automaker afloat until a sale by Cerberus Capital Management LP, Corker said.

"You want to hang around long enough so you can date somebody and hopefully get married soon before you run out of money," he told CEO Robert Nardelli, who heads the Auburn Hills, Mich.-based company.

Nardelli told the committee that he never thinks about a sale, and that he and other Chrysler employees are working hard to make Chrysler stand on its own.

But Corker and Committee Chairman Chris Dodd, D-Conn., pointed out that Chrysler's viability plan submitted to Congress says it is looking for alliances and consolidation. Corker said Chrysler has been in talks with General Motors Corp. about GM acquiring Chrysler, which was later confirmed by GM Chairman and CEO Rick Wagoner.

"That hardly sounds like a go-it-alone deal," Dodd said.

But Nardelli said when the company refers to alliances it is talking of deals such as one between Chrysler and Nissan Motor Co. to make pickup trucks for the Japanese automaker, putting factories to more efficient use.

"It is sharing manufacturing facilities to avoid heavy capital expenditures on transmissions, on axles," Nardelli said. "That's really trying to improve our viability, not selling ourself."

Chrysler also is making minivans for Volkswagen AG, and it has signed a deal for Nissan to manufacture small cars to be sold by Chrysler.

Cerberus purchased 80.1 percent of Chrysler last year from Daimler AG in a $7.4 billion deal. Unlike Ford Motor Co. and GM, it is not publicly held, and some lawmakers have questioned whether the government should put money into a private company.

But Nardelli said investors in Cerberus are the same as those who put money into the other automakers, such as pension funds.

Chrysler, Corker said, hasn't invested in product development and doesn't have technology to compete with other automakers.

Nardelli said some of the criticism was "spot on" and said Chrysler was "somewhat hollowed out" by Daimler, which tried to sell European designs in the U.S. Some of those designs were canceled when he arrived, Nardelli said.

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