DETROIT – Chrysler LLC Chairman and CEO Robert Nardelli fires back at critics who allege the auto maker does not deserve taxpayer-backed federal funds, saying uninformed opinions “created a cloud” that confused consumers.

“The best way to repair that is what we’re doing – come out boldly,” Nardelli says, displaying a combative side he did not show when he testified before Congress late last year in a bid to acquire bridge financing and avoid bankruptcy.

During and after his visit to Washington in December, Nardelli and his counterparts from Ford Motor Co. and General Motors Corp. heard withering criticism, including the suggestion that vehicles made by Detroit auto makers are neither desirable nor reliable.

Nardelli reminds journalists here at the North American International Auto Show of the 400 line-item changes Chrysler executives approved for immediate implementation in current and future products.

“That is really paying off,” he says. “We had the lowest warranty costs in the history of the company this past year.”

Nardelli also cites Chrysler’s 2008 track record for recalled vehicles. Its total was the lowest of any auto maker. On the restructuring front:

  • Capacity has been reduced by 30%, or 1.2 million units.
  • $2.4 billion in fixed costs have been eliminated.
  • Slow-selling vehicles have been axed from Chrysler’s lineup.
  • 32,000 workers have been furloughed.

Cutting payrolls is “very, very painful,” Nardelli admits. But as a result, the auto maker has “de-layered” its operations.

Among the eliminated functions was economic analysis. Instead of purchasing data and analyzing it in-house, Chrysler will rely on third-party analysis to monitor trends, insiders tell Ward’s.

Meanwhile, Nardelli concedes Project D, a D-segment vehicle-development program, is no longer a high priority.

“The segment has changed,” says Jim Press, vice chairman and president, adding consumers are looking for smaller vehicles.

Setting his jaw firmly, Nardelli declares: “We won’t build ‘em if we can’t build ‘em right.”