Sergio Marchionne, Chief Executive Officer of the New Chrysler Group, put in place a new organization at the same time the sale of Chrysler to Fiat was completed this morning.
The U.S. Supreme Court late yesterday lifted a stay, allowing the sale to proceed. Under the terms approved by the U.S. Bankruptcy Court in New York and antitrust regulators, the company formerly known as Chrysler LLC formally sold substantially all of its assets, without most of its debts and liabilities, to a new company that will operate as Chrysler Group LLC.
In addition to Mr. Marchionne, currently the Chief Executive Officer of Fiat S.p.A. serving as CEO, Chrysler Group LLC will be managed by a nine-member Board of Directors, consisting of three directors to be appointed by Fiat, four directors to be appointed by the U.S. Government, one director to be appointed by the Canadian Government and one director to be appointed by the United Auto Workers’ Retiree Medical Benefits Trust. The Board is expected to name C. Robert Kidder as Chairman. The process of determining additional board members is continuing.
Chrysler Group LLC said in a statement that it is restructuring to concentrate on the Chrysler, Jeep, Dodge vehicle lines and the Mopar brand of aftermarket parts.
A large, potentially fatal, issue remains with Chrysler’s currently depressed sales levels, and as a result how long it takes to sell off the current inventory. All Chrysler plants have been idled since its bankruptcy filing and it is uncertain when they will resume production. Its suppliers are facing their own insolvencies.
The sales challenge confronting Chrysler as it emerges from bankruptcy is gargantuan. 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.
“I personally feel privileged to have the opportunity to lead the New Chrysler and to work with senior management to build this company and our great brands into all we know they can and should be,” said Sergio Marchionne, who today was named Chief Executive Officer of Chrysler Group LLC. “That effort starts with leadership.”
To assist the new company in the transition, Jim Press is appointed Deputy CEO and Special Advisor, reporting to Mr. Marchionne. The company said Press will be instrumental in the restructuring of the Chrysler Group. Press served most recently as Chrysler LLC Vice Chairman & President.
Steven Landry, Executive Vice President, North American Sales & Marketing, Global Service & Parts, announced his intention to retire. Mr. Landry offered to assist the new company in the transition. (more…)