Mr. Chairman, members of the Committee, I appreciate this opportunity toaddress the current economic and financial crisis, the impact it is having onthe automotive industry, and the need for immediate action.

During the 15 months I've been part of Chrysler, and since we've emergedas the first privately held American auto company in 50 years, I've been proudto work with a team of dedicated men and women determined to restore this83-year old, iconic American brand to its rightful place in the automotiveindustry.

We are asking for assistance for one reason: to address the devastatingautomotive industry recession caused by our nations' financial meltdown, andthe current lack of consumer credit, which has resulted in the critical lackof liquidity within our industry.

With credit markets frozen, our customers -- average working Americans --do not have access to competitive financing to purchase or lease vehicles ...our dealers do not have access to market competitive funding to placewholesale orders for new vehicles ... resulting in the constriction of cashinflows to auto manufacturers. At the same time, Chrysler has billions ofdollars in cash payment obligations every month to pay wages, to paysuppliers, to fund health care and pensions, all in the range of $4 to $5billion per month.

This crisis has already driven U.S. sales to a 25-year low. In 2008 alone,our volume domestically has dropped from 17 million units to 11 million -- a38 percent decline. That volume drop is more than the total U.S. sales of Fordand Chrysler combined.

Therefore without immediate bridge financing support, Chrysler's liquiditycould fall below the level necessary to sustain operations in the ordinarycourse. This would put at risk health care coverage for retirees, which ispart of Chrysler's nearly $20 billion total health care obligation, $2 billionin annual pension payments to our retirees and surviving spouses,approximately $7 billion in current payables, $35 billion in future annualsupplier business, and 56,600 direct Chrysler employees earning $6 billion inwages.

Independent research firms have quantified the fallout of a domestic automaker bankruptcy to the overall economy, and the impact is devastating: 2.3 -3 million in lost jobs, $275-$400 billion in lost wages, and $100-$150 billionin lost government revenue.

But this is not a good option for Chrysler, and more importantly, for theauto industry or the broader economy -- for the following reasons:

1. We believe that retail sales would be impacted materially as a resultof declining consumer confidence, and we will be forced to heavily discountexisting inventory to move our product.

2. Given our common supplier base - at Chrysler, 96 of our top 100suppliers are common to Ford and GM - the bankruptcy of any one domesticautomaker would place enormous pressure on the supply chain and, consequently,that company's competitors.

3. Our factories would likely be idled for a significant period of timewhile we renegotiate contracts with each of our thousands of individualsuppliers.

4. Restructuring and reorganization costs and expenses will be materiallyhigher in connection with a Chapter 11 process: supplier and dealer supportand marketing costs will increase, general economic dislocation will followand significant fees and expenses will be paid to an army of bankruptcyprofessionals.

5. The overall amount and cost of financing the restructuring will besignificantly higher in a Chapter 11 process than the working capital bridgewe are requesting here today.

6. And finally, we cannot be confident that we will able to successfullyemerge from bankruptcy.

That's why as an industry we are requesting a $25 billion working capitalbridge to survive this liquidity crisis. However, both our private equityowner and I believe that while the immediate bridge financing is critical, thelong-term solution to the industry's problems and challenges requires industryconsolidation and cost rationalization to eliminate excess industry capacityand redundant costs.

I would expect Congress to insist that the American taxpayer be protected.We are willing to provide full financial transparency, and welcome thegovernment as a stakeholder - including as an equity holder. We are fullyprepared to comply with the current conditions and policies already put inplace as mandated by the government, under the recently enacted EmergencyEconomic Stabilization Act.

Our private equity owner, Cerberus Capital Management, L.P., has made itclear that it will forgo any benefit from the upside that would, in part, becreated from any government assistance that Chrysler LLC may obtain. Theprincipal of Cerberus Capital has stated that he will enter into legallybinding agreements requiring the contribution to the government of the GeneralPartner's future profits interest related to Chrysler LLC which he mightreceive if any are ever earned.

Immediately on the separating from Daimler in August 2007, and being newto the automotive industry, I recognized the need to question and sometimeschallenge the status quo, and seek significant opportunities to improveperformance throughout the business. We began an aggressive restructuring andtransformation of our business as an independent American auto company.

During the first 60 days, we approved more than 400 line item designchanges, representing an investment of half a billion dollars in improvementsto our products' reliability, durability, fit and finish, and consumer appeal.We offered our customers a lifetime powertrain warranty to build theirconfidence. Due to a focused product quality improvement effort during thepast year, we've seen our warranty claim rates drop by 29 percent and theimprovement trend continues. We made tough decisions to reduce operating costsand adjusted production schedules immediately. We prioritized every productinvestment with a strong emphasis on improving energy security andenvironmental sustainability by introducing advanced powertrain technologies,while at the same time we discontinued four vehicle models. We also identifiedover $1 billion in non-earning assets to sell and we're more than 75 percenttoward achieving that goal.

Since 2007, Chrysler has reduced 1.2 million units of capacity, whichrepresents over 30 percent of our previous installed capacity, and whichresulted in the elimination 12 production shifts. Over the past 10 monthsalone, we've reduced our fixed costs by $2.2 billion, and unfortunately, bythe end of the year, we will have furloughed over 32,000 employees. That isthe most gut-wrenching part of this job, to see the effect on the lives ofgood men and women who lose their jobs through no fault of their own, butbecause of the actions the Company is forced to take in these difficult times.

We have increased our manufacturing productivity to equal Toyota asAmerica's most productive automaker in terms of hours of assembly per vehicle,and our recently negotiated labor agreement was an important step in makingour cost structure more competitive with transplants by 2010.

To further enhance our product portfolio, support growth and improve ourcost structure, we continue to aggressively pursue strategic alliances andpartnerships with other companies. I believe more restructuring andconsolidation is required for the industry to be viable in the long-run. Wewould welcome the opportunity to have an open discussion with the newAdministration and Congress on a collaborative approach to restructuring thatwould ensure any Government resources invested in the industry are usedefficiently and help achieve important national public policy objectives.

It is equally important that the lack of liquidity to provide loans andleases to customers and financing to dealers is addressed immediately. It isimperative that our affiliated financial companies receive access tocompetitive liquidity and financing capacity. They must in order to providecredit to our customers - average working Americans - and support wholesaleorders from our dealers.

Historically, over 90 percent of all new vehicles were purchased or leasedwith financing assistance, and the lack of readily available financing hassimply frozen sales. A perfect example of this consumer credit crisis is that20 percent of our revenue disappeared overnight when our finance company wasunable to offer leases. These sales literally vanished.At Chrysler, 75 percent of our dealers rely on Chrysler Financial to financetheir business, and 50 percent of all customers finance their vehiclepurchases through the Chrysler Financial. Normally, these loans and leases aresecuritized and sold in the secondary market to generate fresh liquidity andfinancing capacity.

Today, there is virtually no secondary market, and therefore, no way toraise capital. Money is not available for dealers to finance their wholesaleorders, invest in their facilities, and hire and train employees. Competitiveloans for the average working American - our customers - are virtuallynonexistent. This has directly and dramatically depressed vehicle sales,putting at risk not only auto manufacturers but also the widespread network ofsuppliers, vendors. In Chrysler's case, 3,200 entrepreneurs ... smallbusinesses owners called dealers, and the approximately 140,000 people theyemploy in every state across the country. The National Automobile DealersAssociation estimates more than 700 of them will go out of business by yearend. If we don't secure a bridge loan, all 13,600 dealers are at risk.

There are 4.5 million people depending on this industry, and withoutassistance, nearly three million of them could lose their jobs in the next 12months, according to a research memorandum published November 4, 2008, by theCenter for Automotive Research. Failing to act now will hurt many Americanfamilies and undermine our country's economic recovery, far outweighing thecosts related to supporting an industry that touches every district in everystate of the nation.

The crippling of the industry would have severe and debilitatingramifications for the industrial base of the United States, would undermineour nation's ability to respond to military challenges and would threaten ournational security. Chrysler has long contributed to our national defense. OurJeep(R) was an indispensable part of our nation's efforts in World War II andKorea.

Immediate financial assistance will serve the country and the economydirectly in two key ways. First, the lifeblood of the U.S. economy willcontinue to flow. The industry will be able to continue to pay at its currentlevels $22 billion in annual wages to our employees, $13 billion in annualpensions to our retirees and surviving spouses, and meet our currentcommitment of $102 billion in healthcare costs to employees. We will continueto pay $156 billion annually to our suppliers and work to keep them strong byproviding significant additional financial relief for distressed suppliersfighting to stay in business.

Second, America's auto companies are investing in innovation. Capitalinvestment in new technologies, improved operations, and future product willbe able to continue, including a combined $12 billion in annual spending forresearch and development. As an industry, we are moving full speed ahead tomake the transition to advanced propulsion vehicles that will help supportnational energy security and environmental sustainability goals.

Chrysler plans to emerge from the current downturn as a lean, agilecompany. We are, and will continue to be the quintessential American carcompany. Currently, 73 percent of our sales are in the U.S., 61 percent of ourvehicles are produced in the United States, 74 percent of employees work inthe U.S., 78 percent of our materials are purchased in the U.S. and 62 percentof our dealers are based in the U.S.

Today, Chrysler has a very strong pipeline, with a product renaissance for2010. In September we revealed our ENVI electric vehicle program, andannounced that we will begin producing one of these electric-drive models forNorth American consumers in 2010. This underscores our commitment to deliverenvironmentally friendly, fuel-efficient vehicles to customers, and to meetthis social responsibility faster and more broadly than any othermanufacturer. Today we are asking you to help us bridge a chasm created by anunprecedented financial meltdown. We are also asking you to consider investingin a company that will deliver real results for the American taxpayer.

I recognize that this is not an insignificant amount of money. However, webelieve this request is the least costly alternative considering the optionswe face ... with less impact on human capital, and would provide stimulus, asopposed to further depress the economy.

Thank you very much.

For more information, please visit the Chrysler media site athttp://www.media.chrysler.com.

SOURCE Chrysler LLC