In an unusual Sunday evening announcement, Chrysler Group LLC said tonight that with the appointment of five additional members to its Board of Directors, its new governance structure is now complete.
The nine-member Board will be responsible for the future profitability of the group, which is largely held by the United Auto Workers Union, and U.S. and Canadian taxpayers. Fiat has a 20% stake in the company, which is due to rise to a majority interest over time.
Chrysler Group LLC, was formed in June 2009 from an “alliance” with the Fiat Group, and produces Chrysler, Jeep, Dodge, Mopar and Global Electric Motors (GEM) brand vehicles and products.
The new board appointments have experience in finance, corporate restructurings and modifying or breaking union contracts in the airline industry.
They face an immediate sales problem. Even though Chrysler Group emerged from bankruptcy early last month, its June sales results continued the trend that ultimately forced the liquidation of the Old Chrysler. The ongoing shift of buyers away from trucks and truck-derived vehicles has left it on the wrong side of the supply curve.
Before the Chrysler bankruptcy filing in March, the company had an average of $5,566 of incentives in effect — roughly 20% to 25% of the wholesale cost of a vehicle — and sales declined almost 50% anyway.
Overall in June, Chrysler Group sales declined to 68,297 vehicles, a decrease of 42% compared with June 2008, while the market is down on average 37%. It was the largest decline among the major automakers.
“The formal creation of our Board of Directors is another important step toward building a viable Chrysler Group for the long term,” said C. Robert Kidder, acting Chairman of the Board, which is expected to hold its first meeting on July 29. “Our board members bring a wealth of talent and experience in areas such as transportation, finance and investing, energy and government. We will work together as a Board of Directors to support Chrysler Group’s success to the benefit of all stakeholders.”