Chrysler Group LLC, the new Chrysler, will begin operations immediately with a subsidiary of Fiat getting a 20 percent equity interest on a fully diluted basis in the new company with that holding increasing in increments up to a total of 35 percent in the event that certain milestones mandated by the agreement are achieved, but Fiat cannot obtain a majority stake in Chrysler until all taxpayer funds are repaid. The U.S. Treasury and the Canadian Government have been issued an equity interest equal to 8 percent and 2 percent on a fully diluted basis, respectively.
Fiat has also entered into a series of agreements necessary to transfer certain technology, platforms and powertrains to the new Chrysler for small- and medium-sized cars, allowing the company to offer an expanded product line including environmentally friendly vehicles. Chrysler will also benefit from Fiat's management expertise in business turnaround and access to Fiat's international distribution network with particular focus on Latin America and Russia.
Sergio Marchionne was named Chief Executive Officer of Chrysler Group LLC in addition to his role as Chief Executive Officer of Fiat S.p.A. The new Chrysler will be managed by a nine-member Board of Directors, consisting of three directors to be appointed by Fiat, four directors to be appointed by the U.S. Government, one director to be appointed by the Canadian Government and one director to be appointed by the United Auto Workers' Retiree Medical Benefits Trust.
The Board is expected to name C. Robert Kidder as Chairman. The 64 year old Kidder has been Chairman and Chief Executive Officer of private investment firm 3Stone Advisors LLC since August 2006 and prior to that was a Principal of Stonehenge Partners, Inc., another private investment firm, from April 2004 to July 2006. He was Chairman and Chief Executive Officer of dairy, food and beverage company Borden, Inc. from 1995 to 2003 and was also a Founding Partner of Borden Capital Management Partners. Prior to that, he was at battery maker Duracell International Inc. from 1980 to 1994, assuming the role of President and Chief Executive Officer in 1984. He is also a director of investment company Morgan Stanley and drug firm Schering-Plough Corporation.
Jim Press, who came to Chrysler in 2007 after 38 years at Toyota Motor Corp., will be Marchionne's deputy CEO and a special adviser.
As previously announced, Chrysler has entered into an agreement with GMAC Financial Services to provide automotive financing products and services to the Company's North American (NAFTA) dealers and customers. GMAC Financial Services will be the preferred lender in North America for Chrysler, Jeep and Dodge dealer and consumer business, including wholesale of new and used vehicles as well as retail.
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