Chrysler’s New Boss … For Now

Now that Italian automaker Fiat has taken over Chrysler, the restructured American carmaker announced today that Fiat CEO Sergio Marchionne is now its CEO as well.

Well, sort of.

A majority stake of the new Chrysler is owned by the United Auto Workers, which means that Marchionne technically works for the union.

“Chrysler is now a more focused and nimble company that will benefit greatly from its new global strategic alliance with Fiat,” the new CEO said in an email to Chysler employees. “The new company moves forward with significant strategic advantages, including a healthy balance sheet, a competitive cost structure, a leaner and more efficient dealer network.”

All that’s well-and-good, but the last time we checked the global automotive industry was still tanking – and Fiat was operating at a loss and with growing debt.

So how exactly is this going to work again?

Marchionne’s theory – in a nutshell – is that size matters.

He doesn’t think any global automaker that’s producing fewer than 5 million vehicles a year will be able to achieve the economies of scale necessary to stay profitable in the current – and coming – economic storm.

“Too big to fail,” in other words.

Marchionne is also eager to start selling the Fiat 500 (this little guy) to American consumers.

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