White House confirms Chrysler will file for bankruptcy

[Sprint XR8]

Chrysler will declare itself bankrutpt today, White House officials said, after last minute talks with the carmaker’s smaller lenders broke down late last night.

President Barack Obama, accompanied by members of his car taskforce, will make a statement on the issue at noon today.

White House officials said that the carmaker had the full support of its stakeholders, including its largest lenders and union.

An administration official accused Chrysler's smaller lenders of "failing to act in either their own economic interest or the national interest" but added that Chrysler now had an opportunity to restructure and "emerge stronger going forward".

"After a month of tireless negotiations, the Administration went into yesterday afternoon with the full support of Chrysler's key stakeholders, including the UAW and the largest creditors. That support remains."

The bankruptcy filing comes after talks failed with the smaller lenders that hold a portion of Chrysler's $6.9 billion debt who refused to write off their share of the borrowing.

Chrysler had offered $2 billion in cash in return for the debt being written off, which was accepted by the four largest lenders — JP Morgan Chase, Citigroup, Morgan Stanley and Goldman Sachs.

The US Treasury last night sweetened the offer to $2.25 million but smaller lenders, including a number of hedge funds, refused the offer.

The Treasury has prepared for Chrysler to enter a brief “surgical” bankruptcy that avoids liquidating the company. Chrysler's tie-up with Fiat, the Italian carmaker, is expected to go ahead and could be approved as early as next week. A quick bankruptcy would allow Fiat to pick and choose the assets it wanted from Chrysler without taking on some of the company's liabilities and underperforming businesses.

Under a deal signed in January, Fiat would first take a 20 per cent stake which would then rise eventually to 51 per cent.

It would pay nothing, but would provide access for Chrysler to its technology, particularly for smaller, more efficient vehicles.

A bankruptcy for Chrysler could be a prelude to a similar fate for General Motors (GM), its larger rival, which is also struggling in the face of the steepest economic downturn in decades.
http://business.timesonline.co.uk/to...cle6199335.ece

[Windsor220]

So what happens to Chrysler in Australia now?

[vztrt]

Originally Posted by Windsor220

So what happens to Chrysler in Australia now?

It will stay as it is considered profitable here. If it wasn't it would have been closed down a few months ago.

[The Monty]

How do they stay when there are no Chryslers being made?

[Yellow_Festiva]

Now saved by a merger with Fiat.

[csv8]

It will be interesting to see what models are culled. PT Cruiser ?, Sebring ? what about the Dodge and Jeep models ??
Remember FIAT stands for Fix It Again Tony !!!

[4Vman]

Originally Posted by csv8

It will be interesting to see what models are culled. PT Cruiser ?, Sebring ? what about the Dodge and Jeep models ??
Remember FIAT stands for Fix It Again Tony !!!

Sounds like a good "marriage" then.....

[Spanrz]

Yes, great a Fiysler or Chryiat. ;)

Merger talks should have been done and dusted months ago. Not at the 11th hour. But ignorance led the way. Silly yanks.

I've been involved with 2 sporting clubs that either faced death or merge, in a handful of years.
Whilst talks were in the mindset of "old fashioness", justice prevailed and clubs merged twice over for the clubs interests.
This club has now merged yet again about 2-3 years ago and now is at the top end of the sport. Whilst 3 clubs are no more, it has made a more competitve club overall.
The other 3 clubs never made it to this elite level.

[Dave_au]

Details of Chapter 11 Bankruptcy Protection can be found here: http://en.wikipedia.org/wiki/Chapter_11

[Dave_au]

Originally Posted by Spanrz

Merger talks should have been done and dusted months ago. Not at the 11th hour. But ignorance led the way. Silly yanks.

It is not quite as simple as two companies merging with each other to save themselves, the Fiat group is quite a strong going concern, and produces many industrial products in Italy, and is in fact the Italian's larget manufacturer. Brands include Ferrari, Maserati and Alfa.

FIAT was clearly aware of the massive debts owing to Chrysler, and they were not willing to form an alliance (where FIAT own's 20% of Chrysler) until the debt issue was sorted. The filing of Chapter 11 Bankrupcty protection now allows the director's of Chrysler, under guidance of the US courts, to restructure Chrysler in such a way that they can convert the debt outstanding to equity and change the priority of ranking of existing creditors to allow additional financing.

Once Chrysler get's its cards in order, FIAT will be willing to take on a larger exposure of the Chrysler business.

[snakeoil]

Dave does that mean that Chryslers total assets exceed their total liabilities and the chapter 11 allows the directors to dip further into this and trade on even though the company is technically insolvent?

Thanks

[vztrt]

Report on Chrysler going into bankruptcy

http://business.theage.com.au/busine...0501-ap5g.html

Chrysler to be saved through bankruptcy, Fiat deal
May 1, 2009 - 6:28AM

US President Barack Obama has announced plans to save troubled automaker Chrysler through a Government-backed bankruptcy and partnership with Italy's Fiat to help it emerge stronger.

The ailing auto giant will get a total of $US10.4 billion ($14.4 billion) in funding from both the United States and Canada to support the move.

Mr Obama says the new alliance and bankruptcy reorganisation are among the "necessary steps" taken "to give one of America's most storied automakers, Chrysler, a new lease on life".

"I am pleased the announce that Chrysler and Fiat have formed a partnership that has a strong chance of success," Mr Obama said.

"It's a partnership that will save more than 30,000 jobs in Chrysler and tens of thousands of jobs to suppliers, dealers, and other businesses that rely on this company."

Senior US officials said the company, founded in 1919 by Walter Chrysler, was forced to file for bankruptcy protection after major creditors baulked at a deal to reduce $US6.9 billion ($9.5 billion) in debt.

Mr Obama said: "I'm supporting Chrysler's plans to use our bankruptcy laws to clear away its remaining obligations so that the company can get back on its feet and on to a path of success."

The President said the bankruptcy filing "is not a sign of weakness, but rather one more step on a clearly charted path to Chrysler's revival".

Officials said the imminent court filing would not deter the Obama Administration from supporting Chrysler - which employed 54,000 people around the world at the end of 2008 - as it seeks to emerge from restructuring in the court process under Chapter 11 of the bankruptcy code.

A senior official said the Government would provide up to $US8 billion ($11 billion) in bankruptcy financing and exit financing.

The US Treasury would hold 8% of the equity of the new Chrysler under the plan and have a right to select four independent directors, but "will not play a role in the governance or management of the company", a White House statement said.

Officials said the Canadian Government would also support the effort with "$C1 for every $US3" to help the firm's operations in Canada that are integrated with US operations. Canadian officials confirmed plans for aid of about $US2.4 billion ($3.3 billion).

The alliance with Fiat "will make it a stronger company going forward", an official said.

The reorganisation envisions no further job cut or plant closings, and could allow Chrysler to grow as it expands globally under the Fiat partnership and gains new technology for smaller, fuel-efficient cars.

The official said the company and Government envision a 30- to 60-day bankruptcy process that would be able to reduce the debt that could not be cut under out-of-court talks.

[vztrt]

Originally Posted by The Monty

How do they stay when there are no Chryslers being made?

If they completely shut up shop then they would close down. But for now.

http://business.theage.com.au/busine...0501-aph5.html

Chrysler Australia unaffected by parent's bankruptcy
May 1, 2009 - 10:50AM

Chrysler Australia remains open for business after its parent automaker slid into bankruptcy in the US overnight.

The local company, which sells the Jeep and the Dodge Nitro through 60 dealerships nationwide expects to see ``no change whatsoever'' in the near term, the company said.

The Australian business ''isn't in the same situation at all'' as its US parent, said Chrysler Australia and New Zealand managing director Jerry Jenkins. Detroit-based Chrysler has sought court protection from creditors while it reorganises, in a restructure that will see Italian-car maker Fiat to take a stake.

However, news of Chrysler's bankruptcy is expected to cast a shadow over the company's worldwide sales, as the global auto industry contracts amid the recession. In the year to March, the total number of new cars sold in Australia dropped 23%, seasonally adjusted, according the Australian Bureau of Statistics.

czappone@fairfax.com.au

[4Vman]

They may remain open but all this uncertainty can't be good for buyer confidence in the brand....

[vztrt]

Originally Posted by 4Vman

They may remain open but all this uncertainty can't be good for buyer confidence in the brand....

It'll depend how quickly they restructure. I wonder if the media will report if Chrysler come out of CH11.

[XR_Strider_GuY]

Well this puts an end to a hope of bringing the Dodge Charger into Australia. Well at least I have driven one in the states, a big fairwell to the ol tough american bruiser.

In terms of how Chrylser Australia reacts and consumer confidence. We have to look at the 380 and how they are fairing in the market place.

[Elks]

Originally Posted by csv8

Remember FIAT stands for Fix It Again Tony !!!

No, I won't.

Tony.

[Elks]

Chapter 11, in Australia would be termed "in Administration" where the company still operates with the oversight of the courts.

Chapter 7 = Down the gurgler. Liquidation or what we call bankruptcy in Aus.

[Dave_au]

Originally Posted by myts

Chapter 11, in Australia would be termed "in Administration" where the company still operates with the oversight of the courts.

Chapter 7 = Down the gurgler. Liquidation or what we call bankruptcy in Aus.

Chapter 11 = Equivalent of Voluntary administration in Australia with the exception that in the US system the original company directors usually remain for the corporate restructure process and answer to the court.

The difference in Australia is that an External Administrator, who is a registered liquidator takes control of the business an needs to form a view whether it is in best interests of creditors to wind up the business, arrange a company agreement between the directors and creditors, or return the business to the directors.

So Aus rules are more rigid than US rules

[MethodX]

Originally Posted by csv8

It will be interesting to see what models are culled. PT Cruiser ?, Sebring ? what about the Dodge and Jeep models ??
Remember FIAT stands for Fix It Again Tony !!!

and Ford stands for forund on rubbish dumps.. lol.
In all seriousness Fiat are doing well.
In talks to buy Opel too.

[Ohio XB]

Since Chrysler is so much smaller than GM this might be a way to get an idea of how Chapter 11 affects GM's suppliers and dealers without catastrophic results.

Suppliers that have been waiting 2 months, 3 months, 5 months, and 6 months to get paid are now being blown off completely with the Chapter 11. Let's see how many fold and the affect on the other manufacturers.

Fiat started right away with the UAW and CAW workers. That was one of the delays. Once again, a company is looking for most of the cost savings from 10% of the business expenses.



Steve

[vztrt]

Just some news on Chrysler's view.

http://business.theage.com.au/busine...0502-aqtu.html

Sick Chrysler optimistic despite crash
Nick Bunkley, Detroit
May 3, 2009

CHRYSLER'S US sales fell by 48 per cent in April, underscoring the challenge it faces in trying to attract buyers while it reorganises in bankruptcy.

The decline was the biggest drop among the major car makers and considerably worse than the industry average of 34 per cent compared with a year ago.

But Chrysler's sales were dropping fast month to month as well. It sold 24 per cent fewer vehicles in April than in March, while Ford and even General Motors, which could find itself in bankruptcy by the end of this month, improved from March to April.

Chrysler executives, though, said they remained optimistic. On Thursday, the day Chrysler filed for bankruptcy protection and President Barack Obama urged consumers to buy US-made vehicles, they said the company had 11,400 sales, about 15 per cent of its total for the month.

"We closed a lot of deals after the fact," Chrysler's executive vice-president for North American sales, Steven Landry, said. "Our showrooms were busy last night. Dealers said customers bought a car based on President Obama's speech."

The one-day sales flurry — up to 20 per cent of a car maker's monthly sales typically occur on the last day of the month — might be encouraging. But experts cautioned that it might not be a good indication of Chrysler's prospects.

"The challenge is going to be for Chrysler to communicate some sort of a compelling reason to buy their products," said Jeremy Anwyl, the chief executive of Edmunds.com, a website that gives car-buying information to consumers.

"What's the reason to consciously pick a Chrysler, Jeep or Dodge over a competitive vehicle with all of this stuff going on?"

Sales fell 33 per cent at GM, which could follow Chrysler into bankruptcy by June 1, the deadline set by the Obama Administration for GM to prove to the Government it has a viable business plan and should receive more Government loans.

AP

[vztrt]

The US court has allowed Fiat Chrysler deal to go ahead.

http://news.theage.com.au/breaking-n...0506-auwk.html

US court clears way for Chrysler-Fiat deal
May 6, 2009 - 2:09PM

A US bankruptcy judge has approved a fast-track sale plan proposed by the Obama administration to shore up ailing automaker Chrysler, clearing the way for a possible partnership with Fiat.

At the end of a hearing that lasted nearly eight hours, federal bankruptcy judge Arthur Gonzales rejected the arguments from a group of Chrysler lenders who called "illegal" the restructuring plan unveiled last Thursday by the iconic US automaker and the government.

Fiat's drive to create a global car giant from the remnants of General Motors in Europe and Chrysler met with fierce resistance on both sides of the Atlantic.

Unions expressed fears that Fiat head Sergio Marchionne would close plants and slash thousands of jobs if what he calls his "marriage made in heaven" to form the world's second-biggest automaker after Toyota becomes reality.

A report in Wednesday's edition of the Germany daily Frankfurter Allgemeine Zeitung (FAZ) appeared to confirm their fears.

Citing a sensitive internal document, it said Fiat would want to cut 18,000 jobs, closing or scaling down 10 factories in Europe if it closed the Opel/GM deal.

Worst hit would be GM's Vauxhall factories in Britain, an Opel factory in Belgium and factories in Italy, said the paper, citing "Project Football," a leaked Fiat document marked "highly confidential" and dated April 3.

Earlier, Marchionne told the German daily Bild that he would not close any factories in Germany, where GM Europe employs about half of its 56,000 European workers at Opel.

But he added: "Opel can never make money in its current size, and if you don't make money you won't survive... The workforce of course has to be reduced. No one can change that."

In Britain, the head of the country's main carworkers' union Unite had already said he feared that Vauxhall -- part of GM Europe, employing over 5,000 workers in Britain -- could be sacrificed if Marchionne got his way.

"Quite frankly this move sends shivers down my spine... These proposals are not so much a sale as a giveaway," Unite joint general secretary Tony Woodley said.

Unions in Italy were also unhappy. Fiat is by far the country's biggest private sector employer, paying the wages of more than 82,000 people including 30,000 in its auto division at five assembly plants.

Fresh from securing a 20-percent stake in the bankrupt Chrysler last week, Marchionne also wanted to snap up GM's European business to create a new giant making between six and seven million vehicles every year.

GM is expected by analysts to follow fellow Detroit "Big Three" behemoth Chrysler into bankruptcy soon and has been trying to offload some of its European operations, based on Opel and Vauxhall, for some time.

Industry sources told AFP on Tuesday that Fiat was also looking at picking up GM's operations in Latin America where the US firm sold 1.2 million vehicles last year.

A spokesman for GM's unit Saab said however that Fiat was not among 10 parties from North America, Europe and Asia seeking to acquire the Swedish firm.

On Monday a smiling Marchionne was in Berlin touting his plans to ministers in the hope that the German government would help the takeover become reality.

But Economy Minister Karl-Theodor zu Guttenberg said that although Fiat's plans were "interesting" he needed more details and that there were other interested parties.

Hendrik Hering, economy minister in the state of Rhineland-Palatinate where Opel employs 3,000 people at an engine factory that might not form part of Marchionne's vision, went further, calling Fiat's scheme "unacceptable."

German Chancellor Angela Merkel's government has reportedly drawn up a 14-point list of criteria that any buyer of GM Europe has to fulfil before Berlin opens its chequebook.

Frank Schwope, auto analyst at NordLB bank, said that Fiat also has its work cut out winning over GM executives in Detroit. "GM, at the most, will allow Fiat to take a minority stake in Opel," he told AFP.

Fiat is also not the only show in town.

The Financial Times reported that as many as six others including sovereign wealth funds from Abu Dhabi and Singapore and three private equity groups were also eyeing GM Europe.

Another possible suitor is Canadian car parts giant Magna, teaming up with Russian automaker GAZ, controlled by billionaire Oleg Deripaska, and Russia's biggest lender Sberbank.

Marchionne also faces a group of disgruntled Chrysler creditors who on Monday launched a bid to block the US firm's "illegal" and "fatally flawed" restructuring.

Under a plan announced on Thursday by US President Barack Obama, Chrysler aims for a "surgical" bankruptcy to wipe out a portion of its debts, allowing the creation of a new firm owned by unions, governments -- and Fiat.

© 2009 AFP

[Sprint347]

My understanding is this allows the company to rid themselves of the UAW and hire staff at 'market rate' to make them competitive with asian manufacturers?

[Piotr]

Originally Posted by Dave_au

Chapter 11 = Equivalent of Voluntary administration in Australia with the exception that in the US system the original company directors usually remain for the corporate restructure process and answer to the court.

The difference in Australia is that an External Administrator, who is a registered liquidator takes control of the business an needs to form a view whether it is in best interests of creditors to wind up the business, arrange a company agreement between the directors and creditors, or return the business to the directors.

So Aus rules are more rigid than US rules

A VA isn't appointed by the court and does not answer to the court. Only an Official Liquidator in an Official Liquidation does .A VA is appointed by the directors. Further the VA does not come up with Deed of Company arrangements they are proposed by the Directors and voted on by creditors.

Lastly it is possible for these type of arrangements to happen in any type of administration in Australia

[vztrt]

More info on the Chrysler Fiat deal

http://www.goauto.com.au/mellor/mell...2575B400083410

Way cleared for Fiat/Chrysler deal

Creditors throw in the towel and drop legal challenge to Fiat deal

By IAN PORTER 12 May 2009

A LEGAL challenge that could have delayed, perhaps derailed, the intended Chrysler deal with Fiat has been dropped, clearing the way for a speedy exit from bankruptcy for Chrysler.

Two of the five members of a dissident group of investors holding Chrysler unsecured notes withdrew from the legal challenge late on Friday night. The remainder of the group will now disband.

“It reached a point where we didn’t have a significant enough group, and it wasn’t sensible to proceed,” said Glenn Kurtz, a lawyer involved in the challenge,

After Oppenheimer Funds and Stairway Capital Management pulled out, the remaining members of the group held just 2.8 per cent of the Chrysler debt.

A White House spokesman said the decision to disband was “another important and promising step in Chrysler’s favour to go through a very quick restructuring and bankruptcy and to very quickly have Chrysler and Fiat emerge together as partners to put a very storied automobile company back on a path toward viability”. Chrysler directors also welcomed the backdown.

“We are pleased with the decision by the minority secured lenders to withdraw their opposition to Chrysler’s proposed sale to Fiat. We believe this in the best interests of all Chrysler stakeholders.”

Four large banks holding $US6.9 billion ($A9.01 billion) of Chrysler debt decided to accept the Obama administration’s offer of 29 cents in the dollar and did not join the dissident group.

Oppenheimer last week joined the group arguing that it was entitled under US bankruptcy law to more than was being offered.

Meanwhile, Chrysler has been able to pay its US dealers for all their incentive and warranty claims that had been outstanding. There had been fears that these payments may be held up when Chrysler went into Chapter 11 bankruptcy.

What’s more, Chrysler will speed up these payments in future. Previously, the company would pay incentive and warranty claims once a week, on a Monday.

The company’s chief of North America sales has told dealers their claims will be processed overnight from now on.

There was still no word on how many of Chrysler’s 3200 dealers would be retained after bankruptcy. About 2500 of them have already signed up to switch their financing arrangements to GMAC, which is now Chrysler’s designated lender.

[vztrt]

Chrysler is shutting 3200 dealerships in the US.

http://news.theage.com.au/breaking-n...0515-b54v.html

Chrysler to shut quarter of dealerships
May 15, 2009 - 8:44AM

Chrysler wants to eliminate roughly a quarter of its 3,200 US dealerships by early next month, saying in a bankruptcy court filing on Thursday that the network is antiquated and has too many stores competing with each other.

The company, in a motion filed with the US Bankruptcy Court in New York, said it wants to shed 789 dealerships by June 9. Many of the dealers' sales are too low, the automaker said, with just over 50 per cent of dealers accounting for 90 per cent of the company's US sales.

Dealers were told on Thursday morning if they would remain or be eliminated.

The cuts are likely to harm cities and towns across the country as thousands of jobs are lost and taxes are not paid.

Chrysler Vice Chairman Jim Press called the cuts difficult but necessary. He said the list of dealers is final and there will be no appeal process.

"This is a difficult day for us and not a day anybody can be prepared for," Press told reporters.

A hearing is scheduled for June 3 in US Bankruptcy Court in New York for the judge to determine whether to approve Chrysler's motion.

Judges often rely on companies in bankruptcy to help determine what is in their best business interests, such as the closure of dealerships or cancellation of contracts.

More than half the dealerships being eliminated sell less than 100 vehicles per year, Chrysler said, and account for 14 per cent of US sales.

The company is also trying to reduce the number of single-brand dealerships to bring all three Chrysler brands - Jeep, Chrysler and Dodge - under a single roof, they said. It also wanted to limit competing dealerships.

"We recognise in the short term we will see some loss of sales," Press said. "But based on the long term ... the dealer (network) is key and it's going to be very strong, powerful, with a much better financial viability."

Chrysler dealerships aren't the only ones scheduled to get bad news this week. General Motors says it is notifying 1,100 dealers that it will not renew their franchise agreements when they expire at the end of September of 2010.

John McEleney, a Clinton, Iowa, auto dealer who serves as chairman of the National Automobile Dealers Association, said about 187,000 jobs could be lost from the closing of GM and Chrysler dealerships.

Chrysler said in its filing that dealers are not competitive enough with foreign brands. Chrysler sold an average of 303 vehicles per dealer in 2008, according to its filing. By contrast, Honda sold about 1,200 vehicles per dealer, while Toyota sold nearly 1,300 per dealer.

© 2009 AP

[Fev]

man thats bad news.. so many jobs lost

[vztrt]

Apparently if Fiat deal falls through Chrysler will be in big trouble.

http://business.theage.com.au/busine...0517-b7ds.html

Fiat deal the only hope for Chrysler
Tomoeh Murakami Tse, New York
May 18, 2009

DESPERATE to keep the car maker alive, Chrysler executives have combed the globe over the past 2½ years for a healthy and willing partner.

In meetings in Tokyo, Paris, Geneva, Mumbai, Seoul, New York and Chrysler's headquarters in Michigan, the manufacturer tried to strike a deal with at least 10 companies.

Some of the discussions went far enough to be given names. The Nissan-Renault talks were called Project Go Global. Negotiations with General Motors were known as Project America. Some efforts fell apart in a matter of weeks. An overture to Honda was rejected after just one day. With the clock ticking, Chrysler invited Chinese car makers to buy parts of it in the months leading up to its April 30 bankruptcy filing, but failed to secure any agreements.

Details of the search, which have trickled out over the past two weeks before a US Bankruptcy Court judge, illustrate just how bleak Chrysler's situation had become.

The difficulty in securing a partnership also suggests that buyers will not be rushing to compete for Chrysler in the wake of a government-backed sale to Italian car maker Fiat.

Under the terms of the proposed Fiat sale hammered out by the Obama Administration, Chrysler would gain access to Fiat's technology in making small, fuel-efficient vehicles as well as entry into Europe and South America through its dealership network. Fiat, putting up no cash, would receive a 20 per cent Chrysler stake.

Former Chrysler president Tom LaSorda said: "This proposed alliance with Fiat will not only maximise the value of Chrysler's business assets for the benefit of its stakeholders, it is Chrysler's last best hope."

WASHINGTON POST

[vztrt]

Chryslers new chairman

http://www.goauto.com.au/mellor/mell...2575C100153148

Chrysler names Nardelli replacement as new alliance with Fiat takes shape

By TERRY MARTIN 25 May 2009

CHRYSLER has named former Duracell International chief and a one-time Ford Motor Co consultant Robert Kidder as its incoming chairman, replacing Robert Nardelli who will quit the embattled US auto giant once it emerges from bankruptcy and completes its alliance deal with Fiat.

The position of chief executive for the newly named Chrysler Group is still to be announced, although overseas reports indicate that Fiat CEO Sergio Marchionne should assume the role.

This will be one of the first decisions from the still-to-be-formed Chrysler Group board, which will include four directors appointed by the US treasury – which has $US8 billion tied up in loans with Chrysler – and three appointed by Fiat.

Mr Kidder’s appointment counts as the first nominee from the US government, while Fiat choices named in overseas reports include Fiat Powertrain Technologies CEO Alfredo Altavilla and petroleum powerbroker Lou Noto.

Interestingly, Mr Noto also sits on the board of the Penske Automotive Group, which is a potential bidder for General Motors’ Saturn marque – and which confirmed last week that it had hired recently departed Chrysler president Tom LaSorda as a consultant.

A former senior executive with GM, Mr LaSorda left Chrysler after it filed for bankruptcy on April 30 and will almost certainly be advising Penske on its possible bid for Saturn as GM itself faces Chapter 11 bankruptcy when the latest government-imposed restructuring deadline expires at the end of this week.

GM is attempting to sell Saturn, Saab and Hummer, and is negotiating over the possible sale of Opel and Vauxhall. Fiat is on the shortlist as potential proprietor of all bar Saturn, which in turn has led to claims that the Italian manufacturer – should it gain control of GM Europe – will shed up to 20,000 jobs in Germany alone.

However, Fiat hit back at those claims last Friday with a statement that read: “These comments are entirely unfounded. The Fiat plan is for total employee reductions – which would take place gradually and be distributed throughout Europe – of less than 10,000. The impact for the workforce in Germany, therefore, would be significantly lower than speculated.”

In the US, Chrysler’s emphasis last week was on job preservation under Fiat rule.

Commenting on the change in leadership, Mr Nardelli – the man who deposed LaSorda after Cerberus Capital Management purchased Chrysler in 2007 (and who is now returning to Cerberus as an advisor) – said: “My number one priority has been to preserve Chrysler and the livelihoods of thousands of people who depend on its success.

“With his broad expertise serving on numerous world-class boards and his accomplished business background, Bob (Kidder) will provide the leadership and strategic counsel that will help to create a strong global competitor moving forward.”

Mr Kidder, 64, is a former chairman and CEO of Duracell International and Borden Chemical and currently serves on the boards of Morgan Stanley (as lead director), Schering-Plough Corporation and Microvi Biotech Inc.

He is also chairman and CEO of 3Stone Advisors, an investment firm that focuses on clean-tech companies.

“I am pleased to join Chrysler at a time when Chrysler is poised to launch an exciting new era,” Mr Kidder said. “I am confident that Chrysler will emerge from Chapter 11 a lean and powerful competitor, combining its own rich history of innovation with Fiat’s technology and expertise to invigorate the American car market and to challenge other car companies around the globe.” Chrysler expects to emerge from bankruptcy before the end of next month.

In yet another personnel twist to the tale, GM’s head of Hummer, Saab and Cadillac, Mark McNabb, resigned last week “to pursue other career opportunities”. The former Nissan Motor Co executive had been in job 13 months.