Chrysler Fiat Deal Confirmed

On the same day company declares it will file for bankruptcy, Chrysler confirms its alliance deal with Fiat

Good deal or poison pill for Fiat?

On the same day that Chrysler files for Chapter 11 bankruptcy protection, with the full support and guidance of the US government, the troubled Detroit automaker announced the forging of an alliance with not-in-trouble-yet Fiat.

Fiat has decided that picking up a stake in Chrysler on the cheap is a ripe opportunity. And how cheap is that? Real cheap, as in, they don't have to shell out a dime. Fiat will provide Chrysler with models and the platforms and technology to build them, as well as management services and business cooperation in exchange for what will initially be a 20 percent stake in the company, which may be taken to 35 percent at a later date if certain conditions are met such as producing fuel-efficient vehicles at US plants and providing Chrysler access to its dealer network.

Will Fiat be able to exploit Chrysler as a low-cost manufacturing base in the US? Will they revive the Chrysler and Dodge brands and put successful models into dealerships that people will want to buy, despite the stigma of bankruptcy? That's the multi-billion dollar question.

Chrysler, and the Obama administration which has pushed the company towards a bankruptcy declaration and hopes to usher the automaker through a streamlined Chapter 11 proceeding, says it hopes to emerge from bankruptcy with the proper restructuring done within weeks. If they can pull it off maybe, just maybe, they have a chance at surviving and one day prospering again.

Fiat has laid it's bet. Good luck, Sergio.

 

Source: detnews.com

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 Bristol411S3 Bristol411S3
I don't get a great feeling about this, but it's brave. Fiat has bought itself a seat in the largest car market in the world for nothing. And it has always lacked credible mid-sized and large car offerings. If Chrysler wasn't in such a state it would be a perfect marriage. But then if Chrysler wasn't in such a state Fiat wouldn't be able to afford to do it.
May 1, 2009 7:33 am
 Renegade Renegade
I don't either, I mean remember the total fail of the Daimler-Chrysler merger,the biggest hit to Chrysler was when Daimler purchased the company and stripped the best parts for the German automaker, leaving the US automaker a husk of its former self. So really, what crashed Chrysler would be the vampires of its German former master who took them with profit and left them with billions of $ in dept.
May 1, 2009 11:01 am
 sub39h sub39h
i dunno bristol, i still think this is a fantastic move for both parties. unlike GM, both Chrysler and Fiat have models that ppl actually LIKE (e.g. 300C, Dodge Challenger, Fiat Panda, Fiat 500, Alfa MiTo, Alfa 159 - not, ofc, counting Ferraris and Maseratis). if Fiat uses this as an opportunity to sell Alfas in the States, and in return provides Chrysler with decent diesel engines so they can provide credible small cars in Europe, they'll both be in a fantastic position. moving on from that if they can make a decent mid-sized car that they can sell in emerging markets like India and China then they *could* dominate. but we'll see how it goes, eh ;)?
May 1, 2009 7:55 am
 electra electra
Despite all the management problems ahead Fiat Will face to restructure Chrysler, I hope Fiat will be able to bring Alfa Romeo brand in the US as a mass production cars by using the Chrysler manufacturing facilities. Please bring the whole range of Alfa Romeo cars in the US with its V6 engines...
May 1, 2009 7:56 am
 9TNine 9TNine
Well, good luck Fiat. Wish you all the best. I hope it works. Mercedes failed, and if the efficient Germans cannot do it, hope the Italian flair works!
May 1, 2009 8:16 am
 inlinesix inlinesix
I can see it's a good deal for Fiat, as they got the infrastructure (be it dealership network or manufacturing facilities) they need to bring Alfa back. Not good news for Chrysler, I don't see what they might want from Fiat.
May 1, 2009 9:43 am
 Xanavi23 Xanavi23
compact diesel engines, chassis' suspension designs etc etc etc
May 1, 2009 11:56 pm
 nendor nendor
that will be interesting :P if Daimler couldn't do it will fiat do it ??
May 1, 2009 10:23 am
Hopefully FIAT/Chrysler will be successful. However, many of you probably don't know Chrysler was in decent shape prior to the Daimler "merger". Opportunist within Chrysler senior management cashed in on the merger and ran out the door. Chrysler was treated like a red-headed stepchild throughout the relationship with and Mercedes would throw them a bone (Outdated chassis platforms, technology etc.) from time to time. Chrysler was better off by itself. Hopefully, bankruptcy will help them restructure, and they can carry on with FIAT's small car offering. Hmm! I wonder if the FIAT will let the Viper live a little longer? Maybe with a Italian flair.
May 1, 2009 10:46 am
 Prince_Ash Prince_Ash
lets hope something good comes of this, id hate to see fiat start to fall because of chrysler.
May 1, 2009 11:09 am
 mldrieling mldrieling
Diamler bought Chrysler because they were doing well. Stop calling it a merger! The execs ran off and left Chyrsler with nothing. Besides Mercedes diden't want people to think it had anything to do with "lowly" Chrysler, so they weren't going to give them much new technology. Fiat is a brand (except Ferrari and Masserati) fot the common person, like Chyrsler used to be. This will be a good fit because the two companies are more alike in the model line up than different. Fiat also has been trying to get into the AMerican market for years. They now have a dealer network that can support the Alfa and Fiat brands. This could be a win for everyone.
May 1, 2009 1:39 pm
 alessandro alessandro
If Fiat is able to change the basic attitude and operation culture in product development, technology and car manufacturing philosophy of that company, Chrysler will be successful.
May 1, 2009 4:03 pm
 prowler97 prowler97
So our US gov't bails them out, then file chapter 11, then we will give 35% to the Italians? I am confused. Italians make sexy cars, but not reliable. So what will Chrysler gain/lose?
May 1, 2009 4:07 pm
 alessandro alessandro
Look and compare the body work quality of little and cheap Fiat and big Chrysler Sebring if you can. The difference might be shocking to Americans.
May 2, 2009 5:01 pm
 N20_Purge N20_Purge
Now that this is formed, I was thinking of a Dodge SRT-10 engined Fiat 500, but that is too unrealistic. Or is it?
May 1, 2009 9:02 pm
 najdier najdier
An American engine in an Italian car? Perish the thought.
May 2, 2009 1:05 pm
 alessandro alessandro
Chrysler as it is famous with its Neon and Sebring models in Europe will be definitely a company which have nothing to loose if looking from here.
May 2, 2009 5:26 pm
 Renegade Renegade
I know that the 300C it sells pretty good in Europe.
May 2, 2009 5:34 pm
 FIATguy FIATguy
FIAT cars are, in fact, excellent. I've spent a lot of time in Europe, and know, have owned, and rented FIAT and Alfa Romeo cars. The technology and quality is very good, the style is fantastic, and If you thought having more small cars in America will be a boring hell, then you've never driven a FIAT. Forget what your college roomate told you in 1974, most of the problems arose from US safety and emissions regs, dealer issues in the US, and Russian steel which the company unfortunately obtained in a deal for a factory there. I myself had a 1978 FIAT 131 sedan that was the most enjoyable economy car you could imagine... still on the road 30 years later, too. And current FIAT CEO Sergio Marchionne is a genius, if you read what The Economist had to say about what's he's done at the company, you'd understand just how well run FIAT is. They, in fact, get good quality out of numerous plants in South America and Asia, so they should be able to do something with Chrysler's- you'd think. FIAT's current models are nothing to laugh at, even the smallest FIAT 500 gets a 5-Star crash rating and is very similar to the ultra-popular Mini... but cooler to my eyes. I also rented a small, 4 door FIAT Panda in Greece... it got 40-50mpg on gas, and was a very sporty drive for an econobox. FIAT also makes what we would call a midsize, the Croma... which is like a Taurus, and they produce all matter of trucks. They invented the now widespread "single rail" diesel technology, and their smallest cars get 75mpg on diesel... who needs hybrids? Any portrayal of FIAT as a producer of antiquidated, poor quality little cars is utter nonsense from the uninformed... like USA Today, for one. IMO, they are going to surprise a whole lot of people.
May 3, 2009 12:43 pm
 alessandro alessandro
I agree... exept Croma. it looks better and it is smaller than Taurus.
May 6, 2009 5:22 pm
 dbehmoaras dbehmoaras
Fiat will not do well in America unless it keeps some of the Chrysler models. Americans don't want Puntos or Palios or 500s...they want bigger cars. Americans want bang for buck, and unfortunately Fiat won't be able to deliver. Now the Alfa Romeo platforms may be great, with the 159 and 166 and Brera...ported through Chrysler...
May 5, 2009 8:54 pm
 masterlee masterlee
Sad...!!! Chysler is no longer an American company :(
June 2, 2009 2:27 am