Release: New Chrysler Emerges as a Stronger, More Competitive Global Company

 

PRESS RELEASE:

Chrysler Group LLC and Fiat Finalize Global Strategic Alliance; New Chrysler Emerges as a Stronger, More Competitive Global Company

  • C. Robert Kidder to be named Chairman of U.S. Automaker
  • Sergio Marchionne to Serve as Chief Executive Officer

Auburn Hills, Mich. / Turin, Italy  -

Chrysler Group LLC and Fiat Group announced today that they have finalized their previously announced global strategic alliance, forming a “new” Chrysler that has the resources, technology and worldwide distribution network required to compete effectively on a global scale. The new Chrysler will begin operations immediately.

As part of the alliance, Fiat will contribute to Chrysler its world-class technology, platforms and powertrains for small- and medium-sized cars, allowing the company to offer an expanded product line including environmentally friendly vehicles increasingly in demand by consumers. Chrysler will also benefit from Fiat’s management expertise in business turnaround and access to Fiat’s international distribution network with particular focus on Latin America and Russia.

“This is a very significant day, not only for Chrysler and its dedicated employees, who have persevered through a great deal of uncertainty during the past year, but for the global automotive industry as a whole,” said Sergio Marchionne, who today was named Chief Executive Officer of Chrysler Group LLC. “From the very beginning, we have been adamant that this alliance must be a constructive and important step towards solving the problems impacting our industry. We now look forward to establishing a new paradigm for how automotive companies can operate profitably going forward.”

Mr. Marchionne continued: “We intend to build on Chrysler’s culture of innovation and Fiat’s complementary technology and expertise to expand Chrysler’s product portfolio both in North America and overseas. Those Chrysler operations assumed by the new company that were idled during this process will soon be back up and running, and work is already underway on developing new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler’s hallmark going forward.

“The same attributes that first attracted us to this alliance – a global automotive company with first-class technology, a devoted workforce, improved efficiency, a strong, global distribution network and an unyielding passion for building great cars that consumers want – are even more true today. While it does not solve every issue faced by the automotive industry today, this alliance, established with the full support of President Obama’s Administration, is a very significant step toward positioning Fiat and Chrysler to be leaders among the next breed of global automakers. This has, I know, been a difficult process for everyone involved, but we are ready to prove to the American consumer that Chrysler can once again be a strong, competitive company that produces a full portfolio of reliable vehicles that capture the imagination and inspire loyalty,” Mr. Marchionne said.

Under the terms approved by the U.S. Bankruptcy Court in New York and various regulatory and antitrust regulators, the company formerly known as Chrysler LLC today formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC.

Chrysler Group in turn issued to a subsidiary of Fiat a 20 percent equity interest on a fully diluted basis in the new company. Fiat has also entered into a series of agreements necessary to transfer certain technology, platforms and powertrains to the new Chrysler. Fiat’s equity interest will increase in increments by up to a total of 35 percent in the event that certain milestones mandated by the agreement are achieved, but Fiat cannot obtain a majority stake in Chrysler until all taxpayer funds are repaid.

Similarly, the United Auto Workers’ Retiree Medical Benefits Trust, a voluntary employees’ beneficiary association trust (VEBA) has been issued an equity interest in Chrysler Group equal to 55 percent on a fully diluted basis. The U.S. Treasury and the Canadian Government have been issued an equity interest equal to 8 percent and 2 percent on a fully diluted basis, respectively. These interests reflect the anticipated share dilution as a result of Fiat’s incremental equity assumption once the milestones outlined in the strategic alliance agreement are achieved.

In addition to Mr. Marchionne, currently the Chief Executive Officer of Fiat S.p.A. serving as CEO, the new Chrysler 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 and updates will be announced as appropriate.

As previously announced, Chrysler has entered into an agreement with GMAC Financial Services to provide automotive financing products and services to the Company’s North American (NAFTA) dealers and customers. GMAC Financial Services will be the preferred lender in North America for Chrysler, Jeep® and Dodge dealer and consumer business, including wholesale of new and used vehicles as well as retail.

About Chrysler Group LLC

Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep®, Dodge and Mopar® brand vehicles and products. With the resources, technology and worldwide distribution network required to compete effectively on a global scale, the alliance builds on Chrysler’s culture of innovation – first established by Walter P. Chrysler in 1925 – and Fiat’s complementary technology.

Headquartered in Auburn Hills, Mich., Chrysler Group LLC’s product lineup features some of the world’s most recognizable vehicles, including the Chrysler Town & Country, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group LLC to offer an expanded product line including environmentally friendly vehicles.

Follow Chrysler news and video on:

Chrysler Connect blog: http://blog.chryslerllc.com
Twitter: http://www.twitter.com/chryslercom and www.twitter.com/chrysler
YouTube: http://www.youtube.com/pentastarvideo
Streetfire: http://members.streetfire.net/profile/ChryslerVideo.htm

About Fiat

Founded in 1899, Fiat is an automotive-focused industrial group, serving customers in more than 190 countries around the world. With some 185,000 employees, 114 R&D centers and 178 plants worldwide, the Fiat Group designs, manufactures and sells passenger cars (Fiat, Lancia, Alfa Romeo, Abarth, Maserati and Ferrari), agricultural and construction equipment (CNH Case New Holland), trucks and industrial vehicles (Iveco), and automotive components (FPT Powertrain Technologies, Magneti Marelli and Teksid). More information available at www.fiatgroup.com or www.fiatgroupautomobilespress.com.

Source: Chrysler Media Services
Information on status of Chrysler LLC restructuring can be found at http://www.chryslerrestructuring.com
Additional information and news from Chrysler is available at http://www.media.chrysler.com.


  • TAZ Allen

    What about Dealer Bob and some of the other good dealers you have cut off ??????? Bob and the others could have been going out there pushing the sheet metal and telling customers your story…. All the good will that Dodge/Chrysler has build over the years with hot products (PT Cruiser,Challenger and others) has just went out the window with the action of cutting good dealers off like Bob…

    Tazallen

  • Clo

    TAZ Allen.. I am with you on this one… if FIAT is not smart enough to reinstate a dealer like Bob Fredericks, then I am looking elsewhere for my next car. As much as I hate to leave the mopar brand, how can I trust there judgment and product when they cannot realize the importance of a dealer like Bob.

    I know my comments here will not make a difference so this will be my last post on RLD… thanks for the good times and drive it like you stole it!!!

  • newsflash

    get over it “taz allen” stop your belly aching sure i hate to see any jobs lost! dealer bob is no different than the rest of the other dealers that were cut! if you did not produce? you are history! i am afraid that’s how it is with any business…. as for being a small business owner for the last (26) years i know! i bought (2) new dodge’s last year a avenger R/T , challenger SRT8 to be parked by my 1970 plymouth AAR cuda and 2002 dodge neon R/T. and guess what i will continue to buy “NEW MOPAR’S as long as there in business! You know why? I AM FROM A TRUE MOPAR FAMILY! MOPAR OR NO CAR :))) GOOD LUCK WITH BRAND X :)

  • HemiHead

    Fix It Again Tony (FIAT). Mopar is now sub-par. You have a nice collection of future classics. That’s what I’m hoping for my pre bankruptcy R/T Challenger.
    I don’t believe Frederick’s was an underperformer. I believe they were a victim of demographics. They will be better off than riding it out for the next destined bankruptcy of Chrysler Fiat Alpha Romeo UAW US GVT CAN GVT TARP INC.

  • erinmaysdad

    newsflash needs some homework; many dealers that were HIGH Performers (ie westminster in Boston) got on the list. but dealers don’t cost the factory anything anyway! reinstate westminster! after 7 Dodge’s and a P/T, I’m off to Ford

  • http://aol kkelsk

    Is it true they will stop making the srt line I hope not I feel very bad for bob freddick he was a class act. dodge will never be the same. I here they will stop making the hemi engine available to cars and use it only in trucks the new dodge sucks

  • TazChally

    6-16-09

    Dear NewsFlash:

    I am not belly aching, I was just stating some facts. When a company throws some of there best “cheerleaders” under the bus (i.e.: Dealer Bob and Richard Petty.FYI: According to wire reports,Chrysler did not make payments to Richard Petty Motor Sports and forcing them to layoff and cut pay checks for employees) is just plain wrong…. I know Chrysler went into bankruptcy,but dealers like Bob and Richard Petty are some of Chrysler best advertisements and if the old/ new Chrysler just tossed them aside.

    Newsflash if you are questioning my Mopar Loyalty let me give you a short list of my family’s and I Loyalty to Chrysler !

    1. My grandfather was a Plymouth/Desoto dealer in Bastan,Va. Many years he sold and service Mopar and to this day (he is 98 years old) he always tell people about Chrysler superior engineering.

    2. Here is the list of Mopar Products me and my family have owned now and over the years.

    Plymouth: Fury,Barracuda,Voyager,Reliant K wagon.

    Chrysler: Cordoba,Laser,Lebaron,New Yorker,LHS,Concorde,300m,PT Cruiser,300C

    Dodge: Dakota,Cargo van,Caliber, Challenger SRT8

    Jeep: Cherokee 2 dr.

    If this not a true blue Mopar family I do not know what is!!!! Over the years I have got many people, family,friends and strangers to the Mopar brand. Chrysler has built some the worlds hottest and best cars but all that good will got threw out the window with their actions..

    I am in business too,one thing you learn is you do not burn bridges. During this bankruptcy Chrysler burned allot and they will find out they will need them !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    Most Sincerely,

    Tazallen

    PS: Thank you for all the blogers that came to my aid:)

  • GoDodge

    You tell them Taz…the guy (Bob Frederick) does your blog for you on his own time and you close his dealership. That is really good business smarts.

  • Tazallen

    Thanks Go Dodge…

    Tazallen

  • HemiHead

    Unbelievable! The first plant to start back up is the plant that makes Viper and employs 115 people! Well slap Obama in the face! Yes, we need to be leaner, close dealearships, make smaller cars, pay back tarp money,etc.,etc. But before we get started with any of that, lets get the Viper plant up and running! The world needs more $90,000, 600hp cars and FAST!
    Remember when the Challenger first rolled off the assembly line? The cars were going to a QC holding area waiting for parts/repairs. Imagine the parts that will not be there. Suppliers are not working, some have gone out of business. Chrysler stopped paying their bills on April 30. I don’t suspect cars will be rolling for a while. Anyone have news on Challenger production at Brampton Ontario? Oh yes, and by the way, why would we shut down US plants and keep the plant and jobs in Canada?

  • Merry Ragan

    Watching the C-Span Senate Hearings was sickening…at least the GM guy seems to be a somewhat decent human being. If you didnt get to watch it….go to c-span.com and check out their video archives.

    I want to know, did Frederick CJD GET their letter or phone call from Chrysler stating the REASON they were cut like Press said they would??

  • HemiHead

    You folks that had Challengers ordered before the bankruptcy, what are you hearing about the status of your cars?

  • Niotaboy

    HemiHead, my SRT8 Spring Special 6spd has moved to firm scheduling status as of the 15th. It should be one of the first ones built once Brampton reopens toward the end of the month, according to my sales rep. At least it’s activity. I placed my order 24 hours after they opened it up, but the dealer took a while to get an allocation.

  • Niotaboy

    UPDATE: My car just switched to D1 status today! I’ve got a VIN & a delivery date of 7/29! The ball is finally rolling. It’s too bad I can’t log on to Dodge’s website somehow and track its progress. I understand that people last year could do that…unless somebody knows something I don’t know?

  • HemiHead

    Great News, Niataboy! Glad to hear it. Don’t know if anyone can help with the tracking now that Bob left.