Fiat-Led Chrysler Begins Operations Immediately; New Staff Positions Announced
With the Supreme Court stepping aside, the sale of Chrysler LLC's strongest assets to a new company called Chrysler Group LLC was completed. The other parts of the automaker will remain in bankruptcy to be sold or closed.
Fiat obtained a 20% stake in the company that can grow to as much as 35%. The UAW Retiree Medical Benefits Trust now owns 55% of Chrysler Group. The U.S. Treasury owns an 8% stake and the Canadian Government receives the remaining 2% stake.
The sale completes the Obama administration-directed reorganization for Chrysler in just six weeks. Operations at the new company will begin immediately.
With the alliance, Fiat will contribute technology, platforms, and powertrains for small and mid-sized vehicles. Chrysler will also gain Fiat's expertise in business turnaround, and access to Fiat's international distribution network.
As part of the deal, Fiat CEO Sergio Marchionne became chief executive of Chrysler. After his 20 months with the company, former CEO Bob Nardelli left Chrysler and returned to Cerberus.
In his new role, Marchionne was quick to appoint a new management team that retains former President Jim Press and creates a brand organization similar to Fiat's. Press will become Marchionne's deputy CEO and a special adviser. Marchionne said Press will "assist the new company in transition" and will be "instrumental in the restructuring of the Chrysler Group LLC."
Frank Klegon, executive vice president of product development, will leave the company. He will be replaced by Scott Kunselman, who will be senior vice president of product engineering. Also, Steven Landry, executive vice president of North America sales, service, and parts, will retire.
Just as Fiat Group Automobiles' Fiat, Alfa Romeo, and Lancia brands each have executives responsible for profit and loss, Chrysler's three vehicle brands - Chrysler, Dodge and Jeep, as well as the Mopar parts unit - will each be assigned a head executive.
The new heads of Chrysler's brands are:
- Peter Fong, former director of Chrysler's Mid-Atlantic Business Center, is president and CEO of the Chrysler brand.
- Michael Manley, who was the executive vice president of international sales and global product planning operations, is president and CEO of Jeep.
- Michael Accavitti, former director of brand marketing, is president and CEO of Dodge.
- Pietro Gorlier, from Fiat Group Automobiles and CNH Case New Holland, is president and CEO of Mopar Service and Parts and Customer Services.
Also, Richard Palmer replaced Ron Kolka as senior vice president and CFO. Palmer was CFO at Fiat Group Automobiles. Kolka will lead the sale and closure of Chrysler LLC, the leftover assets that are still in bankruptcy.