AP source: Chrysler management shake-up coming if Supreme Court clears asset sale to Fiat

AP source: Chrysler management changes coming

DETROIT — If the sale of Chrysler LLC’s assets to Fiat Group SpA is cleared by the Supreme Court, the Italian automaker will shake up Chrysler management and change the company’s culture, according to a senior Obama administration official.

The management changes will go deeper than the previously announced departure of CEO Bob Nardelli and Vice Chairman Tom LaSorda, as Fiat CEO Sergio Marchionne takes control of the company’s day-to-day operations, said the official, who requested anonymity because the changes have not been made public.

“It’s going to go beyond just a couple of people,” the official said. “I think you’re going to see a different way of operating and organizing the company. That’ll be partly names and faces, it’ll be partly how the organization functions.”

The official would not say specifically what changes would be made, but said Fiat’s management team is one of two in the world with expertise in fixing a troubled automaker, with the other at the combined Renault-Nissan.

Fiat was “pretty darn broken” before current management turned it around, the official said.

“They made a pretty impressive series of changes and put the company in a much stronger position,” the official said. “What we got was the expertise that Fiat brings to the party as to how one actually turns around one of these monsters.”

Fiat will try to get Chrysler to respond faster to market changes, be less hierarchical with a flatter organizational chart, and make the product “the center of the universe,” the official said.

Management changes will likely come soon after the sale is cleared, but changing a culture will take time, probably months, the person said.

Justice Ruth Bader Ginsburg temporarily delayed the asset sale on Monday, but it was unclear what the court’s next move would be. It has been approved by lower courts, but three Indiana pension and construction funds have appealed.

Lawyers representing consumer groups and individuals with product-related lawsuits are also fighting the sale. They say it would release the automaker from product liability claims related to vehicles it sold before the new company led by Fiat takes over.

Ginsburg said in an order Monday that the sale is “stayed pending further order.”

The action indicates that the delay may only be temporary. Chrysler has said a delay could scuttle the deal.

Nardelli is slated to leave Chrysler once the sale is final, and LaSorda, the former CEO when Chrysler was owned by Daimler AG, retired after the automaker went into bankruptcy protection.