Fiat closes Chrysler deal; new management team named

By Poornima Gupta and Gilles Castonguay

DETROIT/MILAN (Reuters) - Fiat SpA closed its acquisition of Chrysler's strongest assets on Wednesday, a key step in the Italian carmaker's ambitious plan to create a global player to ride out the worldwide auto sales downturn.

The Fiat and Chrysler announced deal revives the 84-year old U.S. automaker that had been down to its last dollars before government intervention in late 2008 and completes an Obama administration-directed fast-track reorganization for Chrysler.

Other parts of Chrysler will remain in bankruptcy to be sold or closed.

Fiat Chief Executive Sergio Marchionne became CEO of the new Chrysler Group LLC on Wednesday. The automaker's former CEO, Bob Nardelli, will return to Cerberus Capital, the former majority owner of Chrysler, as an adviser.

Chrysler's former vice chairman and president, Jim Press, has been named Marchionne's deputy chief executive, and Fiat's chief financial officer, Richard Palmer, has been named 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.

Marchionne added that Fiat will begin the process of transferring Fiat's technology, platforms and powertrains to Chrysler plants in the next few months.

In addition to Fiat, Chrysler Group LLC is owned by a union-aligned trust and the U.S. and Canadian governments in taking over the best parts of Chrysler.

The White House welcomed the completion of the deal and said the new alliance was "poised to emerge as a competitive, viable automaker."

The Canadian government said a restructured Chrysler is good for the Canadian auto parts supply chain and for Canadian consumers.

The completion of the Chrysler sale in roughly the time frame planned has been seen by analysts as a good omen for the prospects of completing a similar process for General Motors Corp, which filed for bankruptcy on June 1.

The GM sale is expected to take longer due to the size and complexity of the No. 1 U.S. based automaker. GM will be majority owned by the U.S. government when its sale is completed.

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Chrysler filed for bankruptcy on April 30 and halted production to work through the sale to Fiat, heightening pressure on auto parts suppliers that already had sustained losses due to production cuts at automakers in North America.