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The Stirring Upside to Chrysler's Bankruptcy
As we all know, Chrysler couldn't avoid bankruptcy but they have averted total collapse. Though in many ways I find this unfortunate, there is at least one stirring upside.
Out of the ashes, a new company will be created to buy Chrysler's assets from bankruptcy court. Ownership has thus changed drastically:
- The United Auto Workers will own 55%
- Fiat will own 20% (with the option of another 15%)
- The U.S. government will own 8%
- Canada will own 2%
The best news? We will likely be saying goodbye to the entire current Board of Directors at Chrysler, a board long on wordy resumes and short on effective leadership.
So where will this new board come from? According to CNNMoney:
- The US Treasury Department will name four members
- Fiat will name three
- The UAW will name one
- The Canadian government will name one
This means a well-overdue automotive pink slip for CEO and Chairman Robert Nardelli, a man curiously hand-picked by Cerberus Capital Management in 2007 to right the Chrysler ship.
Believe it or not, Cerberus will retain Nardelli's services as an advisor to the notoriously secretive private equity firm, despite the fact that Chrysler's bankruptcy effectively erases Cerberus' 80% stake in the company.
Who at Cerberus is going to consult this guy on anything? My guess—anyone who wants to know what not to do next.
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