President Obama has officially announced that Chrysler will enter into Chapter 11 bankruptcy proceedings and on a more positive note the automaker has finally reached an agreement with Fiat and will enter into a partnership. The Chrysler and Fiat partnership will provide each automaker with access to additional markets. Additionally Fiat powertrains and technology will be produced at Chrysler plants.
"This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages," said Bob Nardelli, Chairman and CEO of Chrysler. "It enables us to better serve our customers and dealers with a broader and more competitive line-up of environmentally friendly, fuel-efficient high-quality vehicles. Benefits to the new company include access to exciting products that complement our current portfolio, technology cooperation and stronger global distribution."
The restructuring plan is expected to last 30-60 days. Also part of the announcement is that Chrysler CEO, Nardelli is going to step down once the restructuring process is complete. Nardelli claims that leaving is his choice and that he was not asked to leave.
"Now is an appropriate time to let others take the lead in the transformation of Chrysler with Fiat," said Nardelli. "I will work closely with all of our stakeholders to see that this new company swiftly emerges with a successful closing of the alliance."
Part of the restructuring process states that most manufacturing processes will be temporarily idled starting on May 4, 2009. Production will not restart until the restructuring is complete.
Also part of the plan states that Fiat can not become a majority owner until all the government loans are repaid.