Chrysler filed for bankruptcy protection in New York on Thursday and announced an alliance with Fiat SpA that would see new small cars from the Italian automaker built in the United States.
Following are key facts on the planned alliance.
NEW COMPANY STRUCTURE
* Chrysler will ask the bankruptcy court in New York to approve the sale of substantially all of its assets to a new company.
* Pending this approval, the current Chrysler will continue normal business operations, and the U.S. Treasury and the Canadian government will provide the company with debtor-in-possession financing.
* The restructured company will assume the corporate name of Chrysler and become the owner of substantially all the Chrysler's businesses without certain debts and liabilities.
OWNERSHIP STRUCTURE
* Fiat will initially hold a 20 percent ownership stake in the new Chrysler.
* Fiat's ownership stake will increase to 35 percent in three increments as it meets the following criteria: 5 percent for bringing a 40 mpg vehicle platform to Chrysler to be produced in the United States; 5 percent for providing a fuel-efficient engine family to be produced in the United States for use in Chrysler vehicles, and 5 percent for providing Chrysler with access to its global distribution network to export Chrysler vehicles. (Each of the 5 percent increments will be held in trust until Fiat is able to claim them.)
* Fiat will be granted an option to acquire an additional 16 percent shareholding that will bring its total ownership stake to 51 percent.
* The option, exercisable from Jan. 1, 2013, until June 30, 2016, will allow Fiat to raise its shareholding to 49 percent once outstanding U.S. Treasury loans have fallen to $3 billion or less. When all U.S. government loans have been repaid, Fiat will be able to take a full 51 percent stake.
* The United Auto Workers union retiree healthcare trust, Voluntary Employee Benefit Association, will own 55 percent of the new company.
* The U.S. Treasury and the Canadian Government will collectively hold a 10 percent equity interest.
NEW BOARD
* The new Chrysler will be managed by a board consisting of nine directors, three of whom will be appointed by Fiat.
* U.S. Treasury will have the right to make the initial appointment of four directors. The union healthcare trust and the government of Canada will have the right to appoint one director, respectively.
PRODUCT TIE-UP
* Chrysler will provide Fiat with access to the North American market.
* Chrysler will use all Fiat car platforms for the production of Chrysler vehicles in North America, and certain of Fiat's other key technology, such as engine technology.
* Chrysler will participate in Fiat's purchasing and procurement programs.
* Fiat will give Chrysler access to its distribution network outside North America, particularly in countries in which Chrysler currently has a limited presence.