Chrysler-Fiat Deal Proceeds; New GM Chairman

(MoneyWatch)  That huge sigh you hear coming from Detroit is relief that the sale of Chrysler's assets to Fiat can proceed. Yesterday, in a two-page order, the U.S. Supreme Court tamped down the intense anxiety unleashed the day before when it said it might want to look at the deal. The group challenging the sale, including three Indiana pension plans, failed to prove to at least four Justices that a full appeal was necessary. "The applicants have not carried

Time was of the essence here, and the Supreme Court doesn't usually move in the express lane. A 24-hour turnaround shows the Court was aware that Chrysler is losing $100 million a day, and faces a June 15 deadline for the sale to go through. "The Chrysler-Fiat alliance can now go forward," said the Obama White House.

The deal sets the stage for a major corporate reshuffling in Detroit. Chrysler CEO Robert Nardelli, brought in from Home Depot and GE, will step down when the company emerges from bankruptcy and Fiat's Sergio Marchionne (an unknown quality in the American car space) will take over. He certainly helped turn Fiat around, but a clash of cultures--remember what happened when Chrysler and Daimler tried to work together?--could ensue.

Meanwhile, Edward E. Whitacre, Jr., former chairman and CEO of AT&T, will become chairman of a restructured New GM board. Whitacre's appointment is part of a trend: if "car guys" got the companies into the mess they're in, perhaps outsiders can best get them out. Whitacre's 17 years at AT&T and its forerunners took him through several mergers and sales, and negotiating those well in the new Big Three environment is probably more important than approving the grille chrome on the new Malibu.

Nardelli was an outsider, too, and Ford's Alan Mulally spent his entire career at Boeing. The GM board will take in four more directors, and expect them to savvy businesspeople rather than under-the-hood engineers. Given U.S. government control of GM, Obama's automotive task force under Steven Rattner will vet any potential candidates--and undoubtedly took a close look at Whitacre, too.

Jim Motavalli photo