2nd UPDATE:US Government, Fiat To Decide Chrysler Future Leadership
17 April 2009 - 8:02AM
Dow Jones News
Chrysler LLC's future leadership will be determined by the U.S.
government and Fiat SpA (FIATY) if Chrysler succeeds at merging
with the Italian auto maker.
Chrysler Chief Executive Officer Bob Nardelli, in a note to
employees obtained by Dow Jones Newswires, said a new board of
directors will be appointed by the federal government and Fiat once
a deal is completed. The majority of the directors will be
independent.
"The board will have the responsibility to appoint a chairman,"
Nardelli said in the letter distributed to employees via e-mail on
Thursday. "The board also will select a CEO with Fiat's
concurrence."
Nardelli's comments clarify speculation on who will control
Chrysler if a merger deal with Fiat is completed and what role
Nardelli might play in that new company.
Private equity firm Cerberus Capital Management LP installed
Nardelli as Chrysler's leader in August 2007 after acquiring an
80.1% stake in the automaker from former partner Daimler AG. Fiat
CEO Sergio Marchionne said earlier this week that he would be
willing to take over as Chrysler's leader if asked.
The letter also raises questions over the future of frontman and
vice chairman, Jim Press, who was also hired by Cerberus to help
run Chrysler. Press was president and chief operating officer of
Toyota Motors in North America Inc. before joining Chrysler in
September 2007.
Chrysler is racing to secure new union cost-cutting deals,
reduce its debt and ink a Fiat partnership before the federally
mandated April 30 deadline.
The Obama administration said it would not provide Chrysler
additional access to low-interest loans if the requirements are not
met, which could result in the third-largest U.S. auto maker filing
for bankruptcy protection.
General Motors Corp. (GM) is facing a June 1 deadline to also
win further cost-concessions from its unions and debt holders if it
wants to continue receiving access to low-interest loans. The auto
maker is also in the process of shedding some of its brands
including Hummer, Saturn and Saab. GM executives will update the
media on its progress later Friday morning.
Nardelli said seeking cost-concessions from the United Auto
Workers and Canadian Auto Workers is "critical" to receiving
continued support from the Obama administration. He didn't provide
an update on the status of the talks.
The UAW has set aside talks with GM to concentrate on reaching a
deal with Chrysler, according to a person familiar with the
negotiations. The CAW is slated to resume formal negotiations on
Monday. Chrysler has threatened to pull its automotive production
from that country if it doesn't get union concessions.
The auto maker is also waiting to hear back from its creditors
after the U.S. Department of Treasury extended a concessions
proposal to the group. The debt holders are expected to respond
shortly, Nardelli said.
"As we enter this crucial period, I want you to know that I
appreciate your tireless efforts and dedication to the cause of
ensuring Chrysler's future success," Nardelli said in the note. "I
ask you to stay focused on the job at hand, remain positive about
our future and keep supporting one another in everything you
do."
-By Jeff Bennett; Dow Jones Newswires;
jeff.bennett@dowjones.com; 248-204-5542