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Italian carmaker Fiat is the new owners of the bulk of Chrysler’s assets, the deal was closed Wednesday. This will save the hurting U.S. automaker from liquidation placing a new company the overhead of Fiat’s CEO.

The deal clears the way for a new, leaner Chrysler Group LLC to emerge from bankruptcy protection minus billions in debt, 789 underperforming dealerships labor costs that nearly destroyed the automaker.

The Italian based company, Fiat CEO Sergio Marchionne was quickly named CEO of the new company, and a statement was released that it would reopen Chrysler factories that were idled during the bankruptcy process, costing the automaker $100 million per day.

The new company will focus on smaller vehicles, areas in which Chrysler had weak points.

They will also work on the development of new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler’s hallmark going forward,” the new company said in a statement.

Fiat will receive up to a 35 percent stake in the automaker in exchange for sharing the technology Chrysler needs to create smaller, more fuel-efficient vehicles.

Auto Workers union will get a 55 percent stake that will be used to fund its retiree health care obligations, while the U.S. and Canadian governments will receive a combined 10 percent stake. Fiat would get 20 percent, with the possibility of up to 35 percent.

Automaker’s secured debt holders would get $2 billion in cash, or about 29 cents on the dollar, for their combined $6.9 billion in debt. Some debt holders, including the Indiana funds, balked at the deal, saying as secured lenders they deserved more. The funds also challenged the constitutionality of the Treasury Department’s use of money from the Troubled Asset Relief Program, or TARP, to supply Chrysler’s bankruptcy protection financing. They say TARP was earmarked for the financial industry and diverted to the auto industry without Congressional authority.

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