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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]

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    • 1 Second Ago
      • 6 Years Ago
      I think Sergio Marchionne is a really good choice to run the new Chrysler. Growing up in both North America and Italy, he is at home in both cultures. He may also be the first CEO since Iaccoca to instill a new spirit in the company. With Daimler it was really a clash of two cultures - not just automotive but cultural as well. "Vee haff to do it zis vay, Mr. so and so" doesn't fly over here. They spent countless Euros on cultural trainers but to no avail. - you can lead a horse to water but you can't make him drink. I'm not expecting this to be exactly painless but I give Chrysler with Marchionne at the helm a good chance of making it.
      • 6 Years Ago
      Good Luck.

      Next Lee Iacocca
      Next Rick Wagoner?
      • 6 Years Ago
      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?
      • 6 Years Ago
      LS2LS7 - nobody's saying it means anything. The DB-Chrysler deal was a bog standard merger because of the manner which the companies' structure changed.
        • 6 Years Ago
        Personally I don't care whether you're playing or not.

        A merger occurs when two companies enter into an agreement to cessate their existing companies and create one new company. That is achieved by formally dissolving those companies and the shares of each of the old companies are valued at the time of dissolution. The shareholders each then receive shares in the new company, and the amount they receive is based on the values of the shares in the former companies. If the two companies involved are of broadly similar size, then it is considered a "merger of equals" by definition. If one company is larger than the other, it's still a merger although the media will brand it as a takeover - but technically it is not.

        A takeover or buyout occurs when one company buys the shareholding of another company. The existing shareholders are then obliged to sell/transfer their shares at an agreed price to the new company which becomes the new shareholder. The company being bought is not dissolved and it becomes a subsidiary of the company which has bought it.

        In either case, whoever sits on the board after the fact is irrelevant to the kind of transaction that has taken place. In the case of a merger, that board is voted on at the time of the merger. If more execs of one former company or the other lose their place on the new board subsequently, that in no way detracts from the type of transaction which occurred.

        In DB-Chrysler's case, the transaction was a merger.
        • 6 Years Ago
        "You're saying the term merger of equals has a meaning, apparently a strong enough meaning that I should somehow ignore the actual operational information"

        A merger of equals is one where two companies of a similar size conduct a merger. The term only refers to the size of the two outgoing companies. it does not refer to share values, who sits on the board, or anything else.
        • 6 Years Ago
        You're saying the term merger of equals has a meaning, apparently a strong enough meaning that I should somehow ignore the actual operational information about the transaction and just call it what Daimer wanted us to call it. Sorry, I'm not playing along. They can call it a merger of equals, it's their choice. But from all the outcome of it, you can tell it was really a takeover all along.
      • 6 Years Ago
      It seems like Chrysler often ends up with a CEO of Italian descent. Lee Iacocca, Robert Nardelli, and now Sergio Marchionne. I hope he works out as well as Iacocca did in '79, although that would be a long shot.
      • 6 Years Ago
      This just sounds like the merger of equals all over again.
        • 6 Years Ago
        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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        Benz bought Chrysler to get money out of Europe. DB no longer pays tax in the Fatherland. They had zero interest in Chrysler.
        • 6 Years Ago
        But its NOT. Chrysler is basically a dead company and Fiat offers it their technology.
        • 6 Years Ago
        He was joking. The merger in 1997 was NOT a merger of equals...
      • 6 Years Ago
      I was originally warming to this alliance but between this and the UAW intent to liquidate itself as the shares appreciate, I'm just going to have a quiet weep and acknowledge that we're just going to have another foreign occupation inside Auburn Hills. maybe if this works out then a Japanese make will have a turn at owning the company ten years down the line to complete the Axis Powers symbolic conquering of American assets. We got'em almost 70 years ago, and they're getting us now...

      ...well, maybe i can get that $6,000 incentive to buy an AMERICAN Challenger R/T.
      • 6 Years Ago
      I have a feeling he knows what he is doing.

      There are far too many car names out there that aren't real makes in any sense of the word, and people are beginning to know it.

      Many old names will die, and soon Chinese ones will turn up to add interest. Unfortunately.

      Sadly some of these old names will have to go, and so will the excess manufacturing capacity that goes with them. There is no point in all the names merging as a single company if there are not cuts in costs, which means plant, employees and duplication of marques.

      Unions will hate it of course, but the status quo ante is gone forever.

      Blame the shareholders. They allowed 'their' companies to produce turgid rubbish for too long, and the collapse was inevitable.

      • 6 Years Ago
      Carlos Ghosn the second?
      • 6 Years Ago
      Looks like a full-on takeover, and not just a team-up. Let's hope he does a better job...
        • 6 Years Ago
        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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        Evan: they're bankrupt. What sort of control do you expect them to have?
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