Chrysler in Trouble

ICMR HOME | Case Studies Collection

Case Details:

Case Code : BSTR338
Case Length : 21 Pages
Period : 2008-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : Chrysler Motors LLC
Industry : Automobiles
Countries : US

To download Chrysler in Trouble case study (Case Code: BSTR338) click on the button below, and select the case from the list of available cases:

Price:

For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

» Business Strategy Case Studies
» Case Studies Collection
» Business Strategy Short Case Studies
» View Detailed Pricing Info
» How To Order This Case
» Business Case Studies
» Area Specific Case Studies
» Industry Wise Case Studies
» Company Wise Case Studies

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

<< Previous

Chrysler Files for Bankruptcy Contd...

As part of its bankruptcy filing, Chrysler announced that it would establish a global strategic alliance with Fiat SpA (Fiat)⁶. It would create a new company in which Fiat would initially have a 20 percent stake, which would later be increased up to 35 percent.

The Voluntary Employees' Benefit Association (VEBA)⁷ would have a 55 percent stake in it and the US Treasury Department (US Treasury) an 8 percent stake. The Canadian and Ontario governments would have a combined 2 percent stake, with the Canadian government holding 1.33 percent and the Ontario government the remaining 0.67 percent stake.

Chrysler was struggling to stay afloat even after receiving financial aid in the form of a federal loan. The company had got a federal loan of US$ 4 billion in January 2009 out of the requested amount of US$ 7 billion...

Excerpts >>

6] Founded in 1899, Fiat SpA is an Italian automobile manufacturer headquartered in Turin, Italy. For the fiscal 2008, the company earned revenues of € 59.4 billion.

7] The Voluntary Employees' Beneficiary Association (VEBA) under Internal Revenue Code section 501(c)(9) of Internal Revenue Service of the United States Department of the Treasury is an organization organized to pay life, sick, accident, and similar benefits to members or their dependents, or designated beneficiaries. Members of this organization must be individuals who are employees who have an employment-related common bond. This common bond may be a common employer (or affiliated employers), coverage under one or more collective bargaining agreements, membership in a labor union, or membership in one or more locals of a national or international labor union. VEBA allowed a company to make tax free contributions into the fund, which is later used to pay benefits to its employees. The main aim of setting up this organization was to ensure the employees continued to get benefits even if the company got into financial trouble. (Source: http://www.irs.gov)

Case Studies in Business Strategy Volume VI

Case Study Volumes Collection

Business Strategy
Workbooks Collection