Fiat CEO Marchionne to Head Chrysler

Fiat Group CEO Sergio Marchionne will become the chief executive of Chrysler after the U.S. automaker emerges from bankruptcy, a Fiat spokesman confirmed Thursday.

Marchionne, the 56-year-old dual Canadian and Italian citizen, has been tipped for the job since the Italian automaker reached a deal to take a 20-percent stake in the bankrupt Chrysler. Chrysler CEO Bob Nardelli has said he would step down when the bankruptcy is complete, which would make room for Marchionne.

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U.S. President Barack Obama's administration has said Chrysler could comes out of a "surgical" bankruptcy in 30 to 60 days — much more quickly than usual.

Marchionne, meanwhile, also is in talks to take over General Motor's operations in Europe — Germany's Opel, Britain's Vauxhall and Sweden's Saab, and Fiat confirmed that it is also interested in GM's Latin American operations.

Marchionne's vision to create the second largest automaker in the world and the largest in Europe has startled analysts, who wonder if he can pull it off. Marchionne, who returned the loss-making Fiat since taking over as CEO in 2004, has said that automakers will need to made some 5.5 million autos a year — more than twice Fiat's current production — to survive.

"In a way all of this has come a little bit too fast," said Howard Wheeldon, a senior strategist at BGC Partners. " One would like to see two or three years of really strong results in Europe and in Italy for Fiat before they delve out this far and fast. I am extremely worried about this German thing and their wanting to become No. 2 in the world. It will end in tears."

Fiat's vision is to spin off Fiat Group Automobiles, which includes the Fiat, Lancia and Alfa Romeo brands, to create a new car company including Chrysler, GM Europe and, now, GM's Latin American operations. Fiat said the new company would make over 6 million cars.

Fiat would leave the company's debt — which was euro6.6 billion at the end of the last quarter — with Fiat Group SpA, which will also retain the Ferrari and Maserati brands, Fiat said.