Fiat and Chrysler sign alliance plan

Discussion in 'Wall St. News' started by Chuck Krug, Jan 20, 2009.

  1. Fiat and Chrysler sign alliance plan
    Fiat to take 35 percent stake in struggling Chrysler under nonbinding strategic alliance plan
    Ariel David, Associated Press Writer
    Tuesday January 20, 2009, 7:52 am EST
    Yahoo! Buzz Print ROME (AP) -- Fiat and Chrysler said Tuesday they have signed a nonbinding agreement for a strategic alliance that would give the Italian auto empire a 35-percent stake in the troubled U.S. carmaker.

    The two companies said in a joint statement they would share technologies and vehicle platforms. Under the proposed alliance, Fiat would not invest cash in Chrysler but would provide access to its successful small-car platforms, as well as to its more environmentally friendly and fuel-efficient engines.

    The statement said Fiat would take an "initial" 35-percent stake, suggesting the deal may be broadened. It stressed that under the agreement the company is not committing to funding Chrysler in the future.

    For Chrysler, based in Auburn Hills, Michigan, the deal would mean breaking out of the North American market and gaining access to more competitive products.

    "A Chrysler-Fiat partnership is a great fit as it creates the potential for a powerful, new global competitor, offering Chrysler a number of strategic benefits, including access to products that complement our current portfolio (and) a distribution network outside North America," said Bob Nardelli, Chairman and CEO of Chrysler LLC.

    Fiat Group SpA, which makes Fiat, Lancia and Alfa Romeo vehicles, is trying to re-enter the United States market. The company has expressed interest in bringing its Fiat 500 compact car and the Alfa Romeo brand to the U.S.

    The alliance is subject to a review of company finances and regulatory approvals, including by the U.S. Treasury Department, which last week announced an emergency bridge loan for Chrysler, which analysts say will have difficulty surviving as an independent company.

    "This initiative represents a key milestone in the rapidly changing landscape of the automotive sector," said Fiat CEO Sergio Marchionne.

    "The agreement will offer both companies opportunities to gain access to most relevant automotive markets with innovative and environmentally friendly product offering, a field in which Fiat is a recognized world leader, while benefiting from additional cost synergies," he said.

    Chrysler, which is 80.1 percent owned by Cerberus Capital Management LLP, has been hurt by its reliance upon slow-selling trucks and sport utility vehicles and analysts have said it may not survive the year as an independent company despite receiving the $4 billion government loan.

    The Treasury Department said Friday it will provide a $1.5 billion loan to Chrysler's financing arm, Chrysler Financial, and the automaker plans to offer zero-percent financing on several models and expand lending to car buyers with less than ideal credit.

    Nardelli said the partnership would provide a return for taxpayers on the loan, "securing long-term viability of Chrysler brands," boosting consumer confidence and "preserving American jobs."
  2. So what this says is that Chrysler is worth nothing as they just gave away 35% of it basically for free.
  3. Brons


    Great deal for Fiat.
  4. moarla


    think about Daimler (Mercedes), how much money they lost with chrysler....
    that will be the dead for both fiat and chrysler

  5. Brons


    How will it be the death of Fiat? It costs them nothing.

    Daimler sold Chrysler long ago, how much was the loss?
  6. moarla


    at the moment 20% Daimler 80% Cerberus.
    daimler lost billions (not a billion) : at the moment there are only talks

    u dont think that both (both with no money in there pocket) only in going together will survive better than would be a little bit easy

    fiat will have to invest too much money they dont have and at the end chrysler will die so or so and also fiat (fiat doesnt have that money that daimler had)
    but i am italian and hopefully this crap of carmaker FIAT will die fast
  7. lindq


    Yikes! Can you imagine a car manufactured by Fiat and Chrysler?

    Will it make it out of the dealer's lot and around the corner before it rusts?
  8. All bailout money must be returned immediately, unless we're in the business of bailing out foreign owned companies. OH! Wait, the banks did just that with their free money. Gotta' love that global economy.
  9. 9999


    It won't rust, since it will most likely be made of (cheap) plastic.
  10. Why would Fiat want to hook up with the living dead?
    #10     Jan 20, 2009