Chrysler CEO says new board coming with Fiat deal

DETROIT -- If Chrysler and Fiat Group can work out an alliance in the next two weeks, Chrysler would be run by a new board appointed by the U.S. government and Fiat, Chrysler's top executive said in a message to employees.

Chief executive Robert Nardelli said by email late Thursday, the majority of directors will be independent and not employed by either Fiat or Chrysler.

The new board, Nardelli wrote, would pick a CEO "with Fiat's concurrence," casting doubt on his own future as head of the struggling Auburn Hills, Mich., automaker. The e-mail obtained by The Associated Press did not say if Nardelli plans to stay with the company should it join with Fiat.

Sergio Marchionne, CEO of the Italian automaker, told reporters earlier this week that he could run Chrysler.

Chrysler is surviving on $4 billion in U.S. government loans, and the government has decided it can't stay in business without a partner. Chrysler has until April 30 to work out a deal with Fiat and gain concessions from its unions and debt holders or it will likely be liquidated.

Nardelli and Chrysler President Tom LaSorda said in a letter to employees Friday that it has to get its labor costs at Chrysler Canada down from $63 per hour to Toyota Motor Canada's labor rate of about $47 per hour.

The government says it will provide no more money beyond April 30, and it's unlikely private capital would be available to fund a bankruptcy reorganization.

Nardelli, former CEO of The Home Depot, took charge at Chrysler in 2007 when New York private equity firm Cerberus Capital Management took an 80.1% stake in the company. Daimler AG, Chrysler's previous owner, retains a 19.9% stake.

Fiat has a non binding agreement to take a 20% stake in Chrysler in exchange for Fiat's small-car technology, something Chrysler lacks. Marchionne, in an interview published Wednesday, said Fiat will walk away from the deal unless the U.S. automaker's unions agree to major cost cuts.

In the e-mail, Nardelli also thanked workers for doing more with less as the company goes through difficult times.