USA, Washington
Following weeks of speculation, Chrysler’s future is now in the hands of Fiat. USA’s President Barack Obama said in brief remarks at the White House, “Today, I am pleased to announce that Chrysler and Fiat have formed a partnership that has a strong chance of success,” which he said will help Chrysler emerge from a swift and “controlled” bankruptcy as a stronger company. Fiat can take control of Chrysler from 2013 under the alliance reached between the two auto giants. NGVAmerica President, Rich Kolodziej, said in a message to members the move could prove favourable for natural gas vehicles in North America. With Fiat having previously shown an interest in introducing natural gas vehicle (NGV) models to the US, Kolodziej says the Chrysler partnership could provide the means to do that. Fiat’s commitment to compressed natural gas (CNG) vehicles is further emphasized in a video released last week on theautochannel.
Under the terms of the agreement, through a US government-backed bankruptcy and the partnership with Fiat, Fiat will initially take 20 per cent of Chrysler in exchange for sharing technology to help the US automaker produce smaller, greener cars, the Italian company said in a statement.
Fiat will then be allowed to increase its ownership to a 35 per cent share and then be given an option available between 2013 and 2016 to buy an additional 16 per cent, for a total controlling stake of 51 per cent.
According to AFP (see yahoo), the statement added that “Fiat’s shareholding will be capped at 49 per cent until Chrysler has repaid in full the loan granted by the US Treasury.”
The ailing auto giant will get a total of $US10.4 billion ($A14.36 billion) in funding from the US and Canadian governments to support its operations during the bankruptcy proceedings. (Source)
In its own press release, Chrysler says the deal will allow Chrysler and Fiat to fully optimize their respective manufacturing footprints and the global supplier base, while providing each with access to additional markets. Fiat powertrains and components will also be produced at Chrysler manufacturing sites.”This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages,” said Bob Nardelli, Chairman and CEO of Chrysler.”
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