Fiat CEO Marchionne Could Be Chrysler CEO as Well, Trade Journal Says
April 13, 2009
Fiat CEO Sergio Marchionne could add Chrysler CEO to his list of titles under one scenario
being discussed by the two companies regarding an alliance, a trade journal reported.
The future Chrysler board also may include members of President Obama's automotive task force, Automotive News says in Monday's edition.
The publication says the companies are discussing a revised ownership structure, a new board and possibly a different management team for Chrysler. Under consideration is splitting Chrysler chairman and Chrysler CEO into two jobs. Robert Nardelli currently holds both titles. Marchionne could gain the CEO title, giving him a direct role in Chrysler's operations. The chairman role would be held by an American, Automotive News said.
Quoting unnamed sources, the publication says the plan is to elect a seven-member Chrysler board that would include representatives from Fiat and possibly President Obama's automotive task force.
Neither company is commenting on the report.
As publicly announced, however, the current scenario calls for Fiat to own 20 percent of Chrysler in exchange for not cash but small-vehicle technology that Nardelli has estimated to be worth $8 billion to $10 billion.
But getting the deal done faces major obstacles -- most notably the clock. President Obama has given the two automakers until the end of April to finalize an agreement or Chrysler faces bankruptcy.
The United Auto Workers union and the banks that hold Chrysler's debt have to agree to new terms of their deals, likely a swap of debt for equity in the new company. Also, Cerberus Capital Management, which owns 80.1 percent of Chrysler, and Daimler, which once owned all of the American auto company and still holds a 19.1 percent stake as well as some of its debt, are in contentious negotiations over Daimler's ownership stake and Chrysler's debt owed to Daimler.
Fiat Seeks Funds in U.S.
Meantime, the Detroit Free Press reports, that Fiat is seeking billions of dollars in U.S. banking rescue funds through one of its subsidiaries -- money that could be used to prop up its deteriorating cash reserves and, ultimately, help Fiat and Chrysler finalize an alliance that could rescue the American automaker.
Fiat is seeking the funds through its majority-owned subsidiary, CNH Capital, which expects to borrow from a Federal Reserve program to repay a $5.2-billion loan from Fiat last year, the Free Press said.
CNH Capital is the finance arm for CNH Global, the world's second-largest maker of farm and construction equipment. Fiat owns 90 percent of CNH Global, which grew out of the 1999 merger between New Holland and Case Corp.
Fiat wants the loan it gave to CNH repaid as it is burning through cash at a rapid rate in the deteriorating global market. Consequently, Standard & Poor's cut Fiat's credit rating last month to junk bond status, questioning its ability to meet debt payments coming due in the next year.
The funds may come from the Term Asset-Backed Securities Loan Facility, or TALF, funds.
Posted by Michelle Krebs at 10:42 AM under Chrysler , Companies , Personalities , Rumors | Comments (0) | digg this | Seed Newsvine
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