Chrysler - Hughes Telematics relationship closed to be over

Chrysler - Hughes Telematics relationship closed to be over

Chrysler, like many automakers has faced significant challenges during this economic downturn, resulting in their filing for bankruptcy protection. HUGHES Telematics (HTI) has continued to support the Chrysler telematics program through the bankruptcy process and the formation of new Chrysler, which took over the Chrysler, Dodge and Jeep businesses from the bankrupt company. HTI and new Chrysler each sought to renegotiate the partnership contract to address specific business issues that were important to each company. To that end, HTI has been diligently negotiating a new telematics services agreement with new Chrysler, while also continuing in good faith to support the original program with our resources. Recently, new Chrysler introduced additional business terms that were not part of either the prior business discussions or the original arrangement. As a result, we reached an impasse in the negotiations and are ceasing our work with new Chrysler to deploy our hardware and launch our services with them in the fourth quarter of 2009, as was previously planned.

While we are disappointed at this outcome, we continue our dialogue with other OEMs and are enjoying great successes with Mercedes and in the aftermarket space with our in-Drive product and Networkfleet. At the same time, we are exploring exciting opportunities in other related markets.