Chrysler, Fiat Sign Deal, Get Down To Business
UPDATED at 10:16 a.m. with official statement:
Chrysler has concluded its breakneck bankruptcy and this morning signed the deal to transfer its good assets to Italian automaker Fiat.
The deal concludes hours after the Supreme Court lifted its stay late Tuesday, removing the last obstacle to the government-engineered sale.
A $6.6 billion wire transfer this morning gives Chrysler the exit financing it needs.
The news was first reported by Associated Press and the New York Times.
Fiat chief executive Sergio Marchionne will run the combined companies, meaning the exit of Chrysler chief executive Bob Nardelli, who was installed by Cerberus Capital Management when the private equity firm took controlling interest in Chrysler in 2007.
Here's the full text of the statement from the two companies:
"Chrysler Group LLC and Fiat Group announced today that they have finalized their previously announced global strategic alliance, forming a 'new' Chrysler that has the resources, technology and worldwide distribution network required to compete effectively on a global scale.
The new Chrysler will begin operations immediately.
As part of the alliance, Fiat will contribute to Chrysler its world-class technology, platforms and powertrains for small- and medium-sized cars, allowing the company to offer an expanded product line including environmentally friendly vehicles increasingly in demand by consumers.
Chrysler will also benefit from Fiat’s management expertise in business turnaround and access to Fiat’s international distribution network with particular focus on Latin America and Russia.
'This is a very significant day, not only for Chrysler and its dedicated employees, who have persevered through a great deal of uncertainty during the past year, but for the global automotive industry as a whole,' said Sergio Marchionne, who today was named chief executive officer of Chrysler Group LLC. 'From the very beginning, we have been adamant that this alliance must be a constructive and important step towards solving the problems impacting our industry. We, now look forward to establishing a new paradigm for how automotive companies can operate profitably going forward.'
Mr. Marchionne continued: 'We intend to build on Chrysler’s culture of innovation and Fiat’s complementary technology and expertise to expand Chrysler's product portfolio both in North America and overseas. Those Chrysler operations assumed by the new company that were idled during this process have or will soon be back up and running, and work is already underway on developing new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler's hallmark going forward.'
'The same attributes that first attracted us to this alliance – a global automotive company with first-class technology, a devoted workforce, improved efficiency, a strong, global distribution network and an unyielding passion for building great cars that consumers want – are even more true today. While it does not solve every issue faced by the automotive industry today, this alliance, established with the full support of President Obama's administration, is a very significant step toward positioning Fiat and Chrysler to be leaders among the next breed of global automakers. This has, I know, been a difficult process for everyone involved, but we are ready to prove to the American consumer that Chrysler can once again be a strong, competitive company that produces a full portfolio of reliable vehicles that capture the imagination and inspire loyalty,' Mr. Marchionne said."
June 10, 2009; 10:16 AM ET
Categories: The Ticker | Tags: Bob Nardelli, Chrysler, Fiat
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