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Chrysler, GM back on fast track

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Chrysler, GM back on fast track

OK, so what did we expect Steven Rattner to say?

That General Motors and Chrysler will probably collapse like two flimsy houses of cards?

Of course not. And Rattner, the former head of President Barack Obama's auto industry task force who's now writing a book on the federal rescue of the two Detroit automakers, was indeed upbeat Monday in a Detroit speech about the prospects for GM and Chrysler.

But that doesn't mean he's wrong.

Indeed, there is mounting evidence that GM and Chrysler are on much more solid footing today than anyone had a right to expect 12 months ago, when Chrysler was already in Chapter 11 bankruptcy and GM was soon to follow.

With overall U.S. car sales a still-anemic 30% below the typical rate of the past decade, GM and Chrysler eked out an operating profit in the first three months of this year -- if Rattner's prediction is accurate that GM will soon report its first quarterly profit in three years.

And remember, this is a GM with only four brands instead of the eight it had a year ago -- and a product-starved Chrysler that has added only one new vehicle, a Ram pickup, to its lineup.

Too soon to declare victory

Now, neither Rattner nor Chrysler CEO Sergio Marchionne, who hinted broadly Monday at better profits and an earlier sale of Chrysler stock than previously forecast, nor Ron Bloom, Rattner's codirector of the auto task force, is declaring victory.

"They're not out of the woods yet," Bloom said of Chrysler and GM in East Lansing Monday.

Marchionne, while clearly confident, stopped short of boosting his official forecast of 2010 results until he sees two more solid quarters.

Rattner acknowledged that GM was guilty of "slightly elasticizing" its progress by touting early repayment of its $6.7-billion in loans to Uncle Sam, while neglecting to mention that more than $40 billion in taxpayer money is still tied up in GM equity.

Rattner also said while he is a strong believer in separating the jobs of the CEO and chairman of the board, he would not second-guess GM's Ed Whitacre for taking on both jobs and titles when the board ousted CEO Fritz Henderson last fall. He also supported Whitacre's shuffling of top management, which continued last week with the replacing of marketing chief Susan Docherty by an executive hired away from Nissan.

The bottom line, however, is this: "The fact is that GM is way ahead of anyplace we thought it was going to be or anybody thought it was going to be," Rattner said.

He's right about that, and the same goes for Chrysler.

And for that, everyone in metro Detroit and Michigan should be thankful.

And hopeful, too, that these new houses are being built well enough to withstand any new gusts of ill wind.



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