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|The Chrysler Bankruptcy: The First Bullet Points|
|Written by Rich Truesdell|
|Thursday, 30 April 2009 06:35|
Fasten your seat belts; it's going to be a wild ride, at least for the next 60 days.
It's official, President Obama has just announced that Chrysler now has in place a formal alliance with Fiat, who together with the US Treasury, will name a new board of directors. This board will name a new chairman who will announce a new CEO as current CEO Bob Nardelli will step down once Chrysler emerges from bankruptcy in 60 days or less. While some observers believe that it's close to impossible for Chrysler to restructure in two months, it seems that the Presidential Task Force on Automobiles (PTFOA) is confident that it can.
Here are the important points in President Obama's noon time speech.
In his closing comments President Obama said that "...this was a better outcome than I anticipated 30 days ago."
In an interview with Maria Bartalomo on CNBC, Chrysler CEO Bob Nardelli stated that a new board of directors will be formed with six members to be named by the US Government and three by Fiat. Together these nine will select a chairman and a CEO.
On the product front, Nardelli said the Fiat 500 can be adapted quickly to the US market. He also stated that Jeep, specifically, will benefit from the Fiat alliance and have a better opportunity to be exported to markets outside North America.
Later today, Automotive Traveler will publish an updated product plan based on our analysis of Chrysler and Fiat platforms and how they will be launched in Chrysler's dealerships.
My commentary? First, the Chrysler agreement sets the stage for negotiations between General Motors and its stakeholders, making a General Motors bankruptcy inevitable. Second, stripped of its crushing debt, Chrysler-Fiat (or Fiat-Chrysler) now has a fighting chance to be successful, and by 2012 will be able to effectively compete in North America against all comers.