Nardelli, who joined Chrysler two years ago, will leave after Chrysler emerges from bankruptcy and completes the alliance with Fiat. Fiat will be calling more of the shots after the combination as the deal calls for it to provide "management services" to Chrysler. A successor for Nardelli will be named by the new Chrysler board of directors, which will have four members named by the Treasury Department, three named by Fiat, and one each by the UAW and the Canadian government.
Once the deal closes, Fiat will examine the cost structure of Chrysler to find additional savings. Fiat has promised to use Chrysler's existing plants to build the small cars it now sells in Europe for the U. But the troubled year old automaker was able to avoid liquidation thanks to the deal with Fiat, concessions from the United Auto Workers union and agreements by major lenders to cut Chrysler's debt. The UAW announced late Wednesday night that its membership at Chrysler had overwhelmingly ratified the agreement reached between the company and union leadership on Sunday night.
The U. Nonetheless, the fact that Chrysler will not have a disorderly bankruptcy may prevent a rash of failures across the auto supplier industry that had the potential to disrupt production at other automakers. Some of those suppliers could still be hurt by the bankruptcy filing. And the auto industry's woes are far from over. Sales have plunged due to the global recession and tighter credit. Major automakers are expected to report dismal April sales on Friday. Chrysler has been among the hardest hit.
In addition, GM faces a government-imposed deadline to restructure by the end of May or it too could be forced into bankruptcy. Special Report Detroit's downfall. See all CNNMoney. Cars that wrecked Chrysler. Chrysler was king of the hill with its series just a few years ago. Oh how the mighty have fallen. View photos.
Quick Vote. It's doing what's appropriate. GM recalls , sedans Lessons from Detroit: Take a chance and buy a house Lessons from Detroit: Take a risk and start a business Lessons from Detroit: Take a risk and change careers Lessons from Detroit: Take a risk and cut your losses.
Obama says he's fighting for economy Auto industry woes extend beyond U. They're hiring! If the Fortune were a country Sponsored By:. Thanks for contacting us. We've received your submission. The Obama administration said it had long hoped to stave off bankruptcy for the third-largest U.
Clearing those debts was a needed step for Chrysler to restructure by a government-imposed Thursday deadline.
Chrysler filed for bankruptcy protection in New York with the hopes of emerging in as little as 60 days under the new partnership with Fiat. The government will also help appoint a new board of directors.
Under bankruptcy, Chrysler would still sell cars and the government would back its auto warranties. But Chrysler said Thursday that it will idle its plants during the legal proceedings. The Canadian and Ontario governments, which are also contributing financing, would have small stakes. But Fiat, which the Obama administration hopes can jump start Chrysler with its fuel-efficient and lower-emission technology, could end up the majority stakeholder.
Fiat would initially get 20 percent, a share that could rise to 35 percent if certain benchmarks are met.
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