Posted by mike on 2009/6/10 11:57:56 (1376) reads
Today begins a new chapter for Chrysler - the "merger" with Fiat has been completed. The U.S. Supreme Court delayed the merger by a day, but as of about an hour or two ago, it is complete. From the official Chrysler press release:
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."
So - it's prediction time. A year from now, will this deal be seen as a positive or negative for the Jeep brand. Post your prediction in the comments.
The rest of the press release follows after the jump...
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 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.
Under the terms approved by the U.S. Bankruptcy Court in New York and various regulatory and antitrust regulators, the company formerly known as Chrysler LLC today formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC.
Chrysler Group in turn issued to a subsidiary of Fiat a 20 percent equity interest on a fully diluted basis in the new company. Fiat has also entered into a series of agreements necessary to transfer certain technology, platforms and powertrains to the new Chrysler. Fiat’s equity interest will increase in increments by up to a total of 35 percent in the event that certain milestones mandated by the agreement are achieved, but Fiat cannot obtain a majority stake in Chrysler until all taxpayer funds are repaid.
Similarly, the United Auto Workers’ Retiree Medical Benefits Trust, a voluntary employees’ beneficiary association trust (VEBA) has been issued an equity interest in Chrysler Group equal to 55 percent on a fully diluted basis. The U.S. Treasury and the Canadian Government have been issued an equity interest equal to 8 percent and 2 percent on a fully diluted basis, respectively. These interests reflect the anticipated share dilution as a result of Fiat’s incremental equity assumption once the milestones outlined in the strategic alliance agreement are achieved.
In addition to Mr. Marchionne, currently the Chief Executive Officer of Fiat S.p.A. serving as CEO, the new Chrysler will be managed by a nine-member Board of Directors, consisting of three directors to be appointed by Fiat, four directors to be appointed by the U.S. Government, one director to be appointed by the Canadian Government and one director to be appointed by the United Auto Workers’ Retiree Medical Benefits Trust. The Board is expected to name C. Robert Kidder as Chairman. The process of determining additional board members is continuing and updates will be announced as appropriate.
As previously announced, Chrysler has entered into an agreement with GMAC Financial Services to provide automotive financing products and services to the Company’s North American (NAFTA) dealers and customers. GMAC Financial Services will be the preferred lender in North America for Chrysler, Jeep® and Dodge dealer and consumer business, including wholesale of new and used vehicles as well as retail.
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Posted: 2009/6/12 3:42 Updated: 2009/6/14 10:34
Home away from home
Re: Chrysler/Fiat Deal is Official. Buongiorno!?
I would have to disagree...We will be looking forward to the ENVI Jeep Wrangler PiHV, with hub-mounted wheel motors, a 40 mile EV only range, and MABYE a small displacement Fiat Diesel engine to provide extended range driving, just like the HUMMER-Replacement military vehicle is going to be built, ultimately.
Also the Dodge Circuit, with 150-200 miles PURE electric driving range.
I may have to get one of each, as well as solar panels on my garage roof to supplement the charging of these new cars.
The Fiat 500 will compete with the MINI much like it does in Europe, and will provide an alternative to the SMART car.
I have advocated before that ALL Jeeps, Dodge, and Chrysler vehicles should, at the very minimum, be Mild Hybrid vehicles, stopping the engine when the vehicle is not moving, and starting the engine when the accelerator is depressed, and I would hope that PiHV Wrnagler is built first...Sign me up!
I just read too that with the 35.5 m.p.g. mandate, that means that SUV's will need to get 30 m.p.g. minimum, and cars 39 m.p.g. minimum, and unfortunately, there isn't one non-hybrid model out there that can meet that goal---So it looks like all models are going to need some form of hybrid assistance to meet that goal.
Posted: 2009/6/11 14:33 Updated: 2009/6/11 14:33
Just can't stay away
Re: Chrysler/Fiat Deal is Official. Buongiorno!?
I predict this "partnership" will flop just like the one with the Germans and we'll be driving unibody Fiat based hybrid Jeeps, that cannot get over a puddle much less the Rubicon, in a few years... well I won't but some soccer moms may buy them because they are cute! To me this "merger" suits Fiat more than Chrysler. Fiat had no presence in the US yesterday but today they do, what does Chrysler have other than some extra money to help them hold on for another year or two. Just another way to water down an American brand and sell out the rest of the once great nation to other countries.