Marchionne to Head Chrysler?
The initial 35 percent stake Fiat would take in Chrysler has remained the same, but Autonews reports that the parties have in mind a more active role for the Italians, some say possibly even with Marchionne as CEO. On one side, a person familiar with the negotiations says the CEO job will remain in American hands, while the chairman position is yet to be decided. Other sources say, on the other hand, that Marchionne's involvement might be even required by the US government.
The future CEO of Chrysler, should it not be Bob Nardelli, will be decided after an agreement is reached by all parties involved: Chrysler, Cerberus Capital Management, UAW and even Daimler. The US government has a big say in the matter also, as it initially stated it would not allow Chrysler to fall into foreign hands until its debt is repaid.
Meanwhile, the manufacturer is covering its tracks, as it rages battles on two fronts. Should the Fiat deal go south, Chrysler is preparing its papers for a Chapter 11 filling, a bleak prospect despite the company's reassurances. "We've got to be prepared to take care of the equity and the assets," Jim Press, Chrysler co-president said at the New York Auto Show.
If it enters bankruptcy, Standard and Poor's believes there will be nothing left to come out on the other side. The rating provider revised Chrysler's corporate credit rating, bringing it down to CC from CCC.
As Greg Maddock, Standard & Poor's recovery analyst says "If Chrysler goes into bankruptcy, I would expect it to go into liquidation, that its assets would be sold in whole or in part. Instead of being reorganized, there would be no carmaker after bankruptcy."