Chrysler Announces Merger with Fiat

Automaker will file for Chapter 11 to hasten return to profitability

Chrysler Chairman and CEO, Bob Narelli

Chrysler announced today that it is going ahead with a global strategic alliance with Fiat SpA. The Big Three automaker also confirmed that it is filing for Chapter 11 of the US Bankruptcy Code, to hasten its return to profitability.

“My number one priority has been to preserve Chrysler and the thousands of people who depend on its success,” said chairman and CEO, Bob Nardelli. “While I am excited by the creation of the global alliance, I am personally disappointed that today Chrysler has filed for Chapter 11. This was not my first choice.”

Nardelli also announced his plans to leave Chrysler following the emergence of the new company from Chapter 11, and the completion of the alliance with Fiat. He will return to Cerberus Capital Management LP as an advisor.

What does this mean to current owners of Chrysler vehicles? According to Nardelli, it will be business as usual through the restructuring.

“We want to personally assure everyone that the new company will produce and support quality vehicles under the Jeep, Dodge and Chrysler brands as well as parts under the Mopar brand,” said Nardelli. “Chrysler employees will become employees of the new company. Chrysler dealerships remain open for business serving our customers. All vehicle warranties will be honored without interruption, and consumers can continue to purchase our vehicles with complete confidence.” Read the rest of this entry »