The Chrysler Group LLC board of directors met on Friday to discuss Chief Executive Sergio Marchionne's plan for revamping the automaker's product line-up at a time of sagging sales, a person with direct knowledge of the plans said.
The source asked not to be named because the proceedings are confidential. Chrysler had no comment.
The company has said it does not intend to comment on its product plans until it issues a five-year business plan in November.
At the same time the nine-member board was said to be reviewing the Fiat SpA (FIA.MI)-led plans, hundreds of unionized workers in Sterling Heights, Michigan staged a rally to try to save the plant that makes the automaker's Chrysler Sebring and Dodge Avenger sedans.
The union workers represented by the United Auto Workers gathered in a protest intended to persuade Chrysler to reverse a decision to close its plant in the city by the end of next year.
Chrysler workers, who held signs saying Fighting to Save American Jobs and Build Them Where You Sell Them, said it was unfair that the automaker had taken $10 billion in U.S. taxpayer funding even as it pressed ahead with plans to cut U.S. manufacturing jobs.
This is not the restructuring of the auto industry that the American taxpayer was promised, Bill Parker, president of UAW Local 1700, told Reuters at the event.
Parker, whose local represents some 1,200 hourly workers at Chrysler's Sterling Heights assembly plant, urged the automaker to change its restructuring plans.
The closing will have a ripple affect on suppliers that provide parts and on local businesses as will the closings of other plants under Chrysler's restructuring, Parker said.
That is not what the president of the United States promised the American public in terms of restructuring the auto industry and in recognizing the realities of the need for fuel efficiency, the need for energy independence, Parker said.
Fiat took a 20-percent ownership stake in Chrysler and full management control as the No. 3 U.S. automaker emerged from a bankruptcy funded by the U.S. government in June.
Fiat has agreed to provide small-car technology to Chrysler in exchange for its stake in Chrysler, an investment valued by Chrysler at billions of dollars.
The Italian automaker plans to introduce a version of its Fiat 500 small car to the U.S. market by late 2010. Marchionne and other executives have spent the past three months reviewing plans to integrate Chrysler's future vehicles with Fiat platforms and technology.
Last week at the Frankfurt Motor Show, Marchionne said Chrysler's five-year plan would set significant milestones, and show how we're going to come out of this.
Marchionne also said he was surprised by how little had been done at Chrysler in terms of product development in the two years before his arrival in June.
Many analysts consider Chrysler's aging and truck-heavy lineup to be the central problem facing its new managers.
Chrysler's U.S. sales fell 39 percent in the year through August and the automaker's share of the U.S. market slipped to just above 9 percent, down nearly two full percentage points.
The U.S. government provided $10 billion to fund Chrysler's turnaround and the Treasury Department's autos task force has been getting regular updates on the progress of Fiat's evolving product plans, the source said.
(Reporting by Bernie Woodall, editing by David Bailey)