AutoReporter

Chrysler is busily working on a viability plan to hand into the U.S. government on February 17th, and the Michigan automaker is banking on more supplier price cuts being part of that report. Chrysler’s suppliers are already contractually obligated to give Chrysler annual price decreases, but the embattled automaker is seeking further cuts in order to aid its North American turnaround efforts.

In a letter sent out to Chrysler suppliers, Scott Garberding, Chrysler’s purchasing chief, ordered further price cuts by April 1st. Garberding did not specify how big of a cut Chrysler was seeking, but one supplier told Automotive News that it would be handled on a case-to-case basis.

However, the cuts won’t be easy to come by as suppliers are facing the same economic hardships as Chrysler, not to mention the rising costs of raw materials. Chrysler addressed that issue it its letter, but says the cuts are needed nonetheless.

The government’s conditions for Chrysler’s bailout package included further concessions from all levels, including suppliers.



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