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June 2, 2009
Major developments overnight have seen the survival of American car giants, GM and Chrysler.
GM has filed for bankruptcy protection while the U.S Bankruptcy Court has appproved the sale of Chrysler LLC operations to a new company formed wth Italian giant, Fiat.
The GM move, backed by the US Government, was good news for GM Holden.
"This is an epic day," said GM Holden's chairman and vice president, Mark Reuss.
"We are safe, we are part of the new GM," he told a press conference at 9.0 am today.
He said Holden's operations were a `viable, sustainable, cash-positive and profitable' in the current downturn.' Mr Reuss said there were no plans to shed any of Holden's 7000 strong work force.
He said Holden would proceed with plans for fuel-saving technology for Commodore, which would be rolled out over the coming 12 months, while it's other main emphasis was on the new small-car Cruze. Cruze goes on sale soon, and by late next year would be manufactured by GM Holden in Adelaide. He said the company was also working hard to replace lost export markets.
Chrysler LLC today announced that the U.S. Bankruptcy Court, Southern District of New York, has approved its request to sell substantially all of its operations to Chrysler Group LLC, the new company formed in alliance with Fiat SpA.
“With this approval, the new Chrysler Group is created and can prepare to launch as a vibrant new company formed with Fiat,” said Robert L. Nardelli, Chairman and Chief Executive Officer of Chrysler LLC.
“Through the hard work and foresight of many Chrysler stakeholders, Chrysler Group will soon begin operations with significant strategic advantages, such as a wage and benefit structure for active and retired employees that is competitive with those of transplant manufacturers; a reduction of debt and interest expense; the disposition of idle assets; a rationalised and more efficient dealer network; and sound agreements with our suppliers.
While this has been an extremely difficult chapter in Chrysler’s history for all involved, the new Company and its customers, employees and suppliers can now begin on a fresh page.”
Chrysler’s Mexican, Canadian and other international operations will also be acquired by Chrysler Group.
"We are very pleased with today’s announcement and the opportunities that it brings to our company. At this stage, It is too early to comment or speculate about how the integration with Fiat might apply in our Australia or New Zealand regarding all aspects of the operation including dealer body and distribution," said Gerry Jenkins, Managing Director, Chrysler Australia.
The alliance with Fiat provides Chrysler Group with access to exciting products that complement the Company’s current portfolio, technology cooperation and stronger global distribution. Work with Fiat is already well underway to develop the next generation of environmentally friendly, fuel-efficient high-quality vehicles.
These and other important steps taken over the past month will position Chrysler Group to provide customers and dealers with the high quality vehicles and service they expect, and enable the new company to become a strong competitor. Many of Chrysler’s stakeholders have worked expeditiously together to launch Chrysler Group, which will move quickly to realise the benefits of the alliance.
As the Company announced previously on April 30, Mr. Nardelli, who had been leading Chrysler since August 2007, will resign from Chrysler LLC on completion of the transaction. He will return to Cerberus Capital Management LP as an advisor.
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