Fiat to Take 35% Stake in Chrysler

[one...two...tree 2,762]

By Jeff Israely

As General Motors fights for survival, the catalog of its recent woes must include the name Fiat. Not only did a 2000 partnership between the U.S. and Italian carmakers sputter badly — as the two companies struggled to find consumer-friendly models and integrate their production facilities — but also GM was eventually forced into an unprecedented $2 billion "divorce" payout to avoid having to purchase the then debt-plagued Fiat.

Now, as both American and European carmakers face plummeting sales and an industry in flux, the storied Turin automaker is set to return to Detroit for a new, though less fixed, marriage. Fiat and Chrysler announced a nonbinding deal Tuesday to create a partnership that will give the Italian automaker a 35% stake in the smallest of the badly strapped American Big Three. The joint announcement stipulated that Fiat's commitment to its struggling partner would be solely an equity interest and that "the alliance does not contemplate that Fiat would make a cash investment in Chrysler or commit to funding Chrysler in the future." (See the best cars from the 2009 Detroit Auto Show.)

Still, both companies see short- and long-term upsides to joining forces. Chrysler is in dire straits, considered the closest to collapse of the Big Three. The $4 billion in federal loans it received last month to help keep it afloat, and the additional $3 billion it hopes to obtain in March, carries the stipulation that the company move quickly to find ways to produce smaller, more fuel-efficient models, which have long been Fiat's bread and butter. "A Chrysler-Fiat partnership is a great fit," said Chrysler chairman Bob Nardelli in the joint communiqué. "It creates the potential for a powerful new global competitor." Nardelli pointed to Fiat's "competitive, fuel-efficient vehicle platforms, powertrain and components" as well as its distribution outside North America, including sales networks in Asia and Latin America.

But Fiat is hardly a magic pill for Chrysler, which is burdened by inefficient factories that need major overhauls to allow for production of smaller, smarter automobiles, says Giuseppe Berta, a Milan-based car-industry expert. "At this point, Chrysler can say it tried to get out of a corner, that it found a European company that makes more marketable cars," says Berta. "But if you want to actually use Chrysler facilities to construct a Cinquecento or Alfa MiTo, you're talking about a major cost." (See the 50 worst cars of all time.)

Fiat, which began a remarkable turnaround with the whopping cash payout from GM in 2005, is also struggling again, along with the rest of the auto industry, as car sales plummet amid a deepening economic crisis. Fiat has been itching to get its stylishly economic models on the market in the U.S., and the deal with Chrysler can be seen as part of a series of "strategic partnerships" it has sealed with other automakers in recent years, including one with Tata motors and a deal to build diesel engines with Daimler-Chrysler, before the breakup last year of that German-American alliance.

http://www.time.com/time/business/article/...1872719,00.html

[spookyturtle 9,466]

It probably can't hurt at this point, Chrysler is in dire straights. Fiat also owns a large chunk of Ferrari, so they can't be all bad.

[MrsCat 6]

It probably can't hurt at this point, Chrysler is in dire straights. Fiat also owns a large chunk of Ferrari, so they can't be all bad.

The Chrysler Ferrari. SWEET!

[spookyturtle 9,466]

It probably can't hurt at this point, Chrysler is in dire straights. Fiat also owns a large chunk of Ferrari, so they can't be all bad.

The Chrysler Ferrari. SWEET!

When are you getting yours? I already put down a deposit.

[MrsCat 6]

It probably can't hurt at this point, Chrysler is in dire straights. Fiat also owns a large chunk of Ferrari, so they can't be all bad.

The Chrysler Ferrari. SWEET!

When are you getting yours? I already put down a deposit.

I'm broke. If they're accepting soda cans as I deposit, I've got $0.35.

[spookyturtle 9,466]

It probably can't hurt at this point, Chrysler is in dire straights. Fiat also owns a large chunk of Ferrari, so they can't be all bad.

The Chrysler Ferrari. SWEET!

When are you getting yours? I already put down a deposit.

I'm broke. If they're accepting soda cans as I deposit, I've got $0.35.

Don't worry, with all the change that's coming, we'll all be driving Ferrari's in a few months.

[MrsCat 6]

It probably can't hurt at this point, Chrysler is in dire straights. Fiat also owns a large chunk of Ferrari, so they can't be all bad.

The Chrysler Ferrari. SWEET!

When are you getting yours? I already put down a deposit.

I'm broke. If they're accepting soda cans as I deposit, I've got $0.35.

Don't worry, with all the change that's coming, we'll all be driving Ferrari's in a few months.

DOUBLE SWEET!

[spookyturtle 9,466]

It probably can't hurt at this point, Chrysler is in dire straights. Fiat also owns a large chunk of Ferrari, so they can't be all bad.

The Chrysler Ferrari. SWEET!

When are you getting yours? I already put down a deposit.

I'm broke. If they're accepting soda cans as I deposit, I've got $0.35.

Don't worry, with all the change that's coming, we'll all be driving Ferrari's in a few months.

DOUBLE SWEET!

I'm going to stick with the traditional red, what color are you getting?

[Uncle Wally 2]

It probably can't hurt at this point, Chrysler is in dire straights. Fiat also owns a large chunk of Ferrari, so they can't be all bad.

The Chrysler Ferrari. SWEET!

The Chrysler Ferrari©

It's just like a regular Ferrari- except it's wicked slow, it looks really gay, and it's a total hunk of sh!t.TM

Starting at $89,595.

See your Fiat dealer for details.

[MrsCat 6]

I'm going to stick with the traditional red, what color are you getting?

Vroom Vroom red for me too.

Shut it Wally. Unless you're driving a Lotus, I don't wanna hear it.

[Uncle Wally 2]

I'm going to stick with the traditional red, what color are you getting?

Vroom Vroom red for me too.

Shut it Wally. Unless you're driving a Lotus, I don't wanna hear it.

My whip is crazy tricked out:

[MrsCat 6]

^

Better than a Lotus! That B!tch is tricked the F out!

[Jasman0717 9]

Fix It Again Tony is a good match for Chrysler

[MrsCat 6]

Fix It Again Tony is a good match for Chrysler

:lol:

[thepizzadude 26]

It probably can't hurt at this point, Chrysler is in dire straights. Fiat also owns a large chunk of Ferrari, so they can't be all bad.

The Chrysler Ferrari. SWEET!

The Chrysler Ferrari©

It's just like a regular Ferrari- except it's wicked slow, it looks really gay, and it's a total hunk of sh!t.TM

Starting at $89,595.

See your Fiat dealer for details.

Well, my 1991 Chrysler TC by Maserati still running strong so maybe they onto something here...lol