* U.S. high court removes last obstacle
* Marchionne, Press on new slate of execs
* Fiat shares up more than 4.8 percent
* Analysts sees toughest part ahead with Chrysler revival
(Adds deal closure, names of new management team, adds DETROIT
to dateline)
By Gilles Castonguay and Poornima Gupta
MILAN/DETROIT, June 10 (Reuters) - Italian carmaker Fiat SpA
(FIA.MI) closed its takeover of Chrysler on Wednesday, sealing
the deal on Fiat's ambitious move to create a growing global
player following one of the worst crises in the auto industry's
history.
In a victory for the U.S. administration driving the
restructuring of bankrupt Chrysler, the Supreme Court on
Tuesday denied a request from Indiana pension funds to delay
the sale. [ID:nN09378913]
Fiat Chief Executive Sergio Marchionne will become CEO of
Chrysler. The automaker's former CEO, Bob Nardelli, will leave
the company and return to Cerberus Capital, its former majority
owner.
Chrysler's former vice chairman and president, Jim Press,
will become Marchionne's deputy chief executive, and Fiat's
chief financial officer, Richard Palmer, will become CFO of the
new company.
In a memo to employees, Marchionne voiced optimism about
the new company's outlook.
"There is no doubt in my mind that we will get the job
done," he said. He called the alliance a "bold first step to
implement" lessons learned.
He added that Fiat will begin the process of transferring
Fiat's technology, platforms and powertrains to Chrysler plants
in the next few months.
Fiat is joined by a union-aligned trust and the U.S. and
Canadian governments in taking over the best parts of Chrysler.
Fiat shares were up 4.85 percent at 7.79 euros following
news that the U.S. Supreme Court had removed the final obstacle
to the deal on Tuesday. [ID:nN26485137]
DROP IN SALES
Fiat began looking for partners to gain scale late last year
when the auto crisis intensified, leading to a dramatic drop in
car sales. [ID:nLA1034609]
CSM Worldwide, an industry consultancy, has forecast a 20
percent drop in global production to 52 million vehicles this
year as carmakers lay off workers and leave their factories idle
in the face of a sharp drop in demand. [ID:nWEN0239]
Others in the industry do not feel the urgency to look for
partners. Renault-Nissan (RENA.PA)(7201.T) Chief Executive
Carlos Ghosn, for example, said on Wednesday his group had no
problem with scale. [ID:nWEA6288]
In Fiat's case, CSM Worldwide said it saw a "tremendous
amount of risk" in trying to revive Chrysler.
Not only did it have to renew an aging product line but also
persuade former customers to buy a Chrysler again.
Fiat has sent a team of executives and engineers to Detroit
to work with Chrysler to cut costs and prepare for the U.S.
launch of the Cinquecento (500), Fiat's popular small car.
[ID:nN04329686]
Its stake in Chrysler will start at 20 percent and should
rise to 35 percent over time.
GERMANY
Fiat has had a harder time of persuading German auto and
government officials of its plans to create a world giant in
car industry.
It lost out to Canadian car parts maker Magna International
(MGa.TO) for General Motors Corp's GMGMQ.PK Opel unit
although the government invited it to improve its bid.
The sale is part of GM's restructuring, which caused it to
file for Chapter 11 bankruptcy protection on June 1 after
Chrysler did the same on April 30.
Erich Merkle, an independent auto analyst based in Grand
Rapids, Michigan, said the court's decision on Chrysler was
good news for GM because it was using a similar quick-sale
strategy to facilitate its way through bankruptcy.
(Additional reporting by Giancarlo Navach, David Bailey and
Soyoung Kim; Editing by David Cowell, Patrick Fitzgibbons and
Matthew Lewis)
