Chrysler Bankruptcy: Central Wrap-Up

> Updated 5-7-09
> End game
> Court papers are available at Chrysler¹s site, chryslerRestructuring.com. The
> bankruptcy court judge, Arthur Gonzalez, has approved payments to employees
> and dealers, incentive payments, and honoring of warranties.
> On May 5, 2009, Judge Gonzalez gave potential bidders until May 20, with a
> hearing for approval of bids on May 27. Anyone can bid on Chrysler; if a bid
> deemed more attractive than that of the Treasury, the judge can choose it.
> That means that someone like Bill Gates, Steve Feinberg, China, or Dubai
> could buy Chrysler, or a consortium could buy parts of it and break it up.
> The bankruptcy is expected to be over in May or June. At that time Chrysler
> will be 20% owned by Fiat, 55% by an employee retirement plan, 8% by the U.S.
> Treasury, 2% by the Canadian government. The CEO is expected to be Sergio
> Marcchione, currently CEO of Fiat.
> Fiat¹s newly formed auto group will include Chrysler, Fiat, Lancia, Alfa
> Romeo, and, if current negotiations pan out, GM Europe (including Saab) and
> GM Latin America. That would make it the world¹s second largest automaker
> after Toyota ‹*and, one would suspect, very hard to manage. GM¹s size is one
> of the factors that has been blamed for its losses; the larger an
> organization is, the harder it is to manage (which is why Johnson & Johnson
> is a collection of companies rather than one monolithic organization).
> The new Chrysler will be managed by a board of directors consisting of nine
> directors, three of which will be appointed by Fiat (one of Fiat¹s must
> satisfy the criteria for independence under the New York Stock Exchange
> listing rules). VEBA and the Government of Canada will each appoint one
> Director, and the U.S. Treasury will have the right to make the initial
> appointment of four directors (three of whom must be independent). VEBA is
> expected to sell its 55% share, not necessarily all at once, but the UAW has
> already announced it has no interest in maintaining the holdings.

Mo
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