(Tue 02 Jun 09)

At the same time as one major American car manufacturer files for bankruptcy (see separate story on GM), another has started to emerge from the same process.

The US Bankruptcy Court has approved Chrysler's request to sell its operations to a new company, called Chrysler Group, which has been formed in alliance with Fiat. This opens up the possibility of a new generation of high-economy, low-CO2 Chryslers based on existing Fiat technology, as well as an improvement in the US brand's global distribution network.

According to Bob Nardelli, Chairman and CEO of the "old" Chrysler, "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 rationalized 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."

Nardelli himself will resign from Chrysler once the transaction has been completed. His next job will be as an advisor to Cerberus Capital Management, the company which took over as Chrysler's principle stakeholder when Mercedes-Benz pulled out in 2007.

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