BREAKING: Marchionne confirmed as post-bankruptcy Chrysler CEO
by Noah Joseph on May 7th 2009 at 11:15AM 
After weeks of speculation, Fiat confirmed today that its CEO, Sergio Marchionne, will assume the same role with Chrysler once it exits bankruptcy. According to statements from the Obama administration, Chrysler could emerge from "surgical bankruptcy" in as little as 30 to 60 days, after which Chrysler's current chief executive Bob Nardelli will step down and Marchionne will step in.
A dual Canadian and Italian citizen, the Ontario-educated Marchionne is credited with turning the Fiat Group around from a money-losing enterprise into one of the largest and most successful automakers in the industry. After taking over the helm at Fiat five years ago, Marchionne said he would need to double its sales to 5.5 million units annually in order to make the company financially viable. His vision for separating Fiat, Lancia and Alfa Romeo out of their parent company and into a new auto group together with Chrysler (and potentially with GM's European and Latin American assets) would make it the second-largest automaker in the world, with 6 million cars produced annually. The bulk of the debts, however, would remain with the shells of their former organizations, leaving the new one unencumbered and free to regroup. There's no further news at this point as to when Chrysler will emerge from its Chapter 11 proceedings, allowing Marchionne to step in, or how the reported Treasury Dept. regulations will affect Marchionne's salary, but we can expect to hear plenty more on this highly-rated executive and his vision for reshaping the auto industry in the very near future.
[Source: The Detroit News | Image: Giuseppe Cacace/Getty]
Reader Comments (Page 1 of 2)
Evan 11:22AM (5/07/2009)
Looks like a full-on takeover, and not just a team-up. Let's hope he does a better job...
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Bloke 1:07PM (5/07/2009)
You mean that's news to you? Chrysler's bankrupt. Fiat's bought into the company with various carrots dangled before them to increase their shareholding.
Tool 4:52PM (5/07/2009)
I hope he does a better job, but Chrysler was absolutely decimated by Daimler and Cerberus didn't do much except trying to pawn off whatever assets it could.
So Marchionne is going to have to resurrect Chrysler almost from the ground up. The challenge is going to be the next 2-3 years when the New New New Chrysler will have very little new product. Yes a new Grand Cherokee and a 300, but that is not exactly what consumers want.
So someone would have to explain how we (the U.S. Taxpayer) ever gets the patient off artificial respiration. Back in 1979 when Chrysler got loan guarantees ($1.5 billion) they had the K-cars in development.
To think that these Fiat cars are going to save Chrysler is utterly ridiculous.
I hate to say it, but Chrysler needs to be liquidated. Salvage the good parts -- whatever that would be.
Evan 5:07PM (5/07/2009)
bloke: No, not news, really. I just think it's funny how reality is so divergent here compared to how Chrysler is trying to portray it, especially in that "we're building an exciting new car company" ad. They really don't have much control over the issue, but are sure trying to make it seem otherwise.
Bloke 6:27PM (5/07/2009)
Evan: they're bankrupt. What sort of control do you expect them to have?
Avinash machado 11:22AM (5/07/2009)
Carlos Ghosn the second?
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Rocketboy 11:23AM (5/07/2009)
Nice... Let's hope he brings better brand managment with him... At least it would seem like we are not going to get watered down Fiats.
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why not the LS2LS7? 11:31AM (5/07/2009)
This just sounds like the merger of equals all over again.
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Sea Urchin 11:38AM (5/07/2009)
But its NOT. Chrysler is basically a dead company and Fiat offers it their technology.
mapoftazifosho 11:47AM (5/07/2009)
He was joking. The merger in 1997 was NOT a merger of equals...
why not the LS2LS7? 12:24PM (5/07/2009)
When Daimler-Benz took over Chrysler before, they called it "a merger of equals". It was not true that time and it's no more true this time. They're calling this a merger, tie-up or alliance, but now the CEO of the other company is CEO of this one. This looks like we're going to run the same script. Except I don't think FIAT is nearly as healthy as Daimler-Benz was.
Aprime 1:12PM (5/07/2009)
Yeah, except this guy's considered Fiat's savior. They're not their to leech from Chrysler or anything, and his salary's capped at 500,000. F'yeah Italian-Canadians.
Aprime 1:12PM (5/07/2009)
Considered to be*
Bloke 1:17PM (5/07/2009)
The 1997 merger was a merger of equals by the manner in which both companies were dissolved and a new company with new shareholdings created in their place. This situation is not the same - one company filed for bankruptcy via restructuring and another is graduallt buying it up.
jv2k 1:23PM (5/07/2009)
The difference is that Chrysler really doesn't have much to offer. When Diamler took control they took over a profitable company that offered highly popular models. This time it looks like Fiat can only help chrysler.
bakka 1:43PM (5/07/2009)
Benz bought Chrysler to get money out of Europe. DB no longer pays tax in the Fatherland. They had zero interest in Chrysler.
Taglane 11:55AM (5/07/2009)
It's gonna be interesting to see how this plays out.
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MikeyB 11:59AM (5/07/2009)
agreed
S K 12:06PM (5/07/2009)
Great to see Nardelli go! Thankfully he did not get a chance to drive Chrysler into the ground as Chrysler was already in trouble and rest was done by high gas prices and the severe recession.
Hopefully he won't get a golden parachute of some kind this time.(He got $200 million plus when he left Home Depot)
Marchionne seems capable, has managed to turn around FIAT but FIAT quality still isn't anywhere near the top.
FIAT + Chrysler actually sounds like axis of evil when it comes to quality and reliability.
I have a feeling that having tasted success Mr Marchionne seems to be falling for bigger is better - 6 million units will make the company viable- this alliance should focus on quality and reliability rather than chase volume blindly.
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jamie 12:07PM (5/07/2009)
Sergio plans are extraordinary to say the least!
He was going to bring the Tata pick-up over to Latin America, but Dodge Dakota was a better fit. Therefore, he bought the company. LOL
RED FLAG!::::Fiat is planning to buy GME -" free of debt!!!" Outrageous!!! Fiat Group Automobiles is planning to hide the company's debt -- which was 6.6 billion euros at the end of the last quarter -- with Fiat Group SpA. That is the truth.
So, now we have Fiat/Lancia/Alfa Romeo/Maserati/Ferrari/Iveco merging with Chrysler/Jeep/Dodge and also Saab/Opel/Vauxhall. How long before Sergio notices that Holden and Daewoo are dangling by a thread also? Then there is the penultimate possibility that Cadillac/Chevrolet/Pontiac/Buick/Saturn/GMC could be drawn into the maelstrom as well. Just what is going on here guys?
GM wants 30% of Fiat, but Fiat is only offering them 10%. Could GM end up taking the whole enchilda? Has GM and Chrysler found a new savior CEO in Sergio Marchionne?
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