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The move will have minimal impact in Australia, as Chrysler Group is profitable and actually growing its market share despite the local showroom downturn.
Chrysler has retreated into Chapter 11 bankruptcy protection as it restructures ahead of a new global alliance with Fiat.
The smallest of the 'Big Three' automakers in the USA will go to court early next week to begin the next stage in its life after a small group of shareholders rejected a GM-style restructuring plan to ensure American government support to get it through the global economic crisis.
The move will have minimal impact in Australia, as Chrysler Group is profitable and actually growing its market share despite the local showroom downturn. Further into the future there is likely to be a liaison of some sort with the Fiat distributor, Ateco Automotive.
"For today, it's definitely Chrysler going forward," says the head of Chrysler Group Australia, Gerry Jenkins.
"Our customers have to know we're here and solid."
Jenkins was briefed this morning on the new situation during a global conference with Chrysler headquarters in Auburn Hills, a suburb of Detroit, and says he is pumped.
"Today it is clear what strategy we're going to embark on and who our partners will be and what the company is going to look like. We're focussed on what the future of Chrysler will look like," he says.
The Chapter 11 move comes after months of speculation about the total collapse of Chrysler.
It also comes as the latest development for a company which has bounced from drama to drama over more than 25 years, including a variety of alliances and links with everyone from AMC to Mitsubishi and Daimler. The German deal promised the most, and was promoted as a 'merger of equals' including the DaimlerChrysler name, but could not survive deep cultural differences between the companies and the financial difficulties of Chrysler's operations in the USA.
Jenkins says Chapter 11 is the best way for Chrysler to move forward and that the company is taking an accelerated form of the American financial protection, which could allow it to re-emerge within 30-60 days under a new structure.
"Effectively we hit the ground running," he says.
Fiat has welcomed the new development and, like Chrysler, can see the synergies going forward.
"This transaction represents a constructive and important solution to the problems that have plagued not just Chrysler in recent years, but the global automotive industry as a whole," says the CEO of Fiat Group, Sergio Marchionne.
"Our goal since we first entered discussions with Chrysler nearly a year ago was to leverage the strengths of both companies to yield the scale, efficiencies and cost savings necessary to create two stronger automakers able to compete more effectively on a global scale. This transaction is an important step toward achieving this objective."
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