If Chrysler LLC and Fiat Group SpA can work out an alliance in the next two weeks or so, 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, in an e-mail sent late Thursday, told Chrysler's 54,000 workers that 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 debtholders or it will likely be liquidated.
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.
The Canadian government also has said it won't provide further aid to Chrysler unless it reaches a deal with its Canadian workers in the next two weeks.
Chrysler sent a letter Friday to the automaker's Canadian employees saying the company won't survive if the Canadian Auto Workers union fails to accept government-requested concessions that would make its labor costs competitive with non-unionized plants in Canada.
The letter from Nardelli and Chrysler President Tom LaSorda said the CAW's refusal "to work within the government's guidelines jeopardizes the future of Chrysler and our operations in Canada."
Ken Lewenza, the president of the CAW, told the Associated Press on Thursday that such demands are "ridiculous" because the CAW's labor costs don't compete with Toyota, they compete on labor costs with Chrysler facilities in the U.S., and that it should be about maintaining that investment advantage.
The CAW and Chrysler are scheduled to resume bargaining talks Monday.
Nardelli, former CEO of The Home Depot Inc., took charge at Chrysler in 2007 when New York private equity firm Cerberus Capital Management LP took an 80.1 percent stake in the company. Daimler AG, Chrysler's previous owner, retains a 19.9 percent stake.
Fiat has a nonbinding agreement to take a 20 percent 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.
"As we enter this crucial period, I want you to know that I appreciate your tireless efforts and dedication to the cause of ensuring Chrysler's future success," he wrote. "I ask you to stay focused on the job at hand, remain positive about our future and keep supporting one another in everything you do."