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Italian carmaker Fiat and US giant Chrysler have agreed to create a global strategic alliance. Under the terms of the deal, Fiat will get a 35% stake in Chrysler. In return, the US firm will get access to Fiat’s fuel-efficient vehicle technologies.
The United Auto Workers union (UAW) welcomed the deal, saying it could help preserve US manufacturing jobs.
The statement points out, however, that the agreement does not commit Fiat to funding Chrysler in future.
Chrysler has received an emergency loan from the US government worth $4bn, while Fiat has said it needed a partner because it was too small to continue on its own. Fiat chief executive Sergio Marchionne said the deal represented “a key milestone in the rapidly changing landscape of the automotive sector”.
Trading in Fiat shares had earlier been suspended amid speculation of a possible partnership with the US firm. After the announcement was made and trading resumed, Fiat shares rose 3.5%.
Now, bring over the new Fiat 500 with the 1.3 liter turbodiesel. Yes!
Speaking of diesel engines, glad to see BMW advertising their newest on TV. Too bad I don’t think most people are in the price range of any of their cars.
This is good news for Chrysler. They now have access to Fiat’s, Ferrari’s and Maserati’s R&D.
Isn’t Fiat among the worst car companies on the planet, even worse than the awful U.S. manufacturers? Does this mean that they have formed a strategic alliance to figure out how to market inferior goods? Why not just try to make better goods?
#2 – sargasso,
Ferrari == Fiat? That was news to me. OK, so perhaps Fiat can build something that people are willing to pay a premium for. The main line Fiat though still has a long reputation as crap, which should be a good fit with any U.S. manufacturer.
#2 Don’t forget Alfa Romeo.
#3 Fiat has owned Ferrari since the old man died back in the ’90s. And no Fiat is not among the worst car companies on the planet. That would be GM, Ford and Chrysler. Outside the US, Fiat is a strong competitor with small, efficient cars and leading edge diesel technology.
@3
FIAT is no more what it used to be…They still lean to small, cheap cars as they are their best sellers, but things evolved quite a bit. Their new Panda platform (the new 500 is built on top of it) is a proven, reliable and safe platform. And their common rail diesel technology it’s, maybe third place, after VW’s Tdi and Peugeot’s Hdi on common cars. BMW and Mercedes have stunning diesel technology (on par with VW’s) but these are premium cars.
And not to speak of the whole group:
Ferrari, Maserati, Alfa-Romeo, Lancia.
FIAT is also big on Rail technology: Trains and Trams.
They are not a cheapo company…
PS.
FIAT stands for
Fabrica Italiana d’Automobile da Torino
and they also build planes (jet fighters and trainers). Do go look the wikipedia page as a starting page.
The first press releases said non binding? 35% sounds pretty binding. Is this some sort of under the table move where Fiat won’t be liable for Chrysler’s depts if it folds but can claim 35% if it doesn’t?
About the only way I can see Fiat gaining much in this deal is if Chrysler acts as a subcontracter to make Fiat cars state side and sells them through their dealerships.
35% of a company with a negative net worth isn’t something I’d pay much for. Yeah, I know no money is changing hands and that’s a problem. These people are worse than broke. If Chrysler folds somebody else might buy those patents for peanuts and they are worth a lot of money unless the terms of the deal prevent it.
A little confused.
FIAT is not considered a premium car, but far from being something like Dacia (which Renault acquired).
Seriously, and before US thinks about Diesel, they should improve the Diesel quality in terms of sulfur quantity. It is not on par with European standards right now. Meaning, that the pollution from those engines could be worse than people think.
The Fiats that were imported to the USA back in the 1970s were indeed, crap, and they lost whatever market they had to the Japanese.
But FIAT has come a long, long way since then, and now has a reputation for small, efficient, basically sturdy/sporty cars that are quite popular in Europe.
Of course, one could say the same about Ford, except that they don’t sell their European cars here.
Fiat cars here in europe don’t really rank too highly in quality, lancia or alfa romeo now that would’ve been better for chrysler. It’ll probrably be better for fiat. Really, with the recent baniking crisis in the US I find it amazing that any european company was willing to take the risk.
FIAT = Fix it Again, Tony.
Fiat=Chrysler
crappy cars
Finally the maker of some of the worlds most beutiful cars (Alfa 300C, Ferrari 430, Maserati anything) is teamed up with the maker of some of the worlds ugliest (everything except the Dodge Viper).
I wonder what the marriage of these two will mean Chrysler get a sense of design and beuty.
The result could be like if Heidi Klum had children with Anthony Kiedis instead of Seal.
I have only driven the Spider and X19 from the 70s and 80s, but they were fun.
I think this is about Fiat being able to sell cars State side with a well established network of dealers in place. They now have a nice stable of efficient looking small cars that should sell here. Maybe they think they can sell Challengers, and Jeeps over there but Europe will be as underwhelmed by Calibers and Sebrings as we are.
I suppose it will keep Chrysler alive for now lets hope for the best.
Good Luck
7,
Chrysler is just doing the old song and dance before the gov’t. “oh look! We’ve got a deal for the INTERNATIONAL market!”
Basically, it comes down to a schoolyard friendship. “Hey, FIAT. My mom is going to ask if I’m staying at your house. You HAVE to say yes!” “Yeah… alright”
Chrysler is dead. Cerebus is just looking to add some capital to their loss.
But Cerebus didn’t get any capital so far as I know and Fiat got 35% of Chrysler, maybe, if that is worth a fart.
16…
Cerebus doesn’t WANT capital from FIAT. All Chrysler wants is for the government to throw it a few billions (hopefully over the 7B they bought the company for) and then dump it. The government won’t give them money unless they have a “plan”. Hence, Chrysler says Magna in Canada is going to buy their minivan plant, China will buy some unwanted tooling and FIAT is in for 35%. INTERNATIONAL SALES BABY.
Government ponies up. Cerebus dumps and walks away with a net gain on their investment. Check out Cerebus’ homepage. They are a 100 Billion dollar company. They don’t NEED a bailout. But, if they can get one, they’d be stoopid not to.
No doubt Fiat is going to share their instant rust and factory broken plastic technologies with Chrysler.
Let’s all agree to stay in 1973.
Cerebus initial outlay wasn’t really 7 billion, creative booking made the outlay more like 600 million. M-B had a firesale. I have no clue what they have put in since. Jim Press was a great move, Nardelli? At least he’s earning his dollar/year.
I think FIAT is a good fit, gives them access to the US market when they have cars we would want. Hate to say, but it seems pretty smart. VW or Nissan/Renault might have made a bit more ecenomic sense for Chrysler, but FIAT gains more here.
#11, when i saw this post I was wishing somebody hadn’t used that….kudos though, it’s a true statement….well used to be if you don’t count modern electronics failures….
#18 perhaps you just didn’t look after your car properly or bought a bad one
#2 yes, and i’m sure they will create a monster that’s way too heavy, has a pointless huge engine,less maneuverability than a boat on land and takes up most of the road.
In Ireland there aren’t many chryslers but they appear to be on the rise..
Needless to say, the people that own them aren’t known for intelligence or style.
Simple fact that American cars are suited to America and nowhere else.
They look pretty sh*t too.
20,
You didn’t hear? Nissan is going to make a small car for Chrysler.
http://autos.canada.com/news/story.html?id=98ca812c-dd33-461a-85ae-703c38d5bf32
I still firmly believe its a song and dance.
Is the term “US giant Chrysler” used with the same understanding as “World’s Only Superpower?”
Oh great, two of my favorite car types!
As a Dodge owner(Darts) I know how this will turn out. Simca Omni from Chrysler Europe anyone?
As a Dodge owner(Darts) I know how this will turn out. Simca Omni from Chrysler Europe anyone?
The Omni GLHS (Goes Like Hell, Some-more)
My one experience with a Fiat Spider was trying to change a starter. It required the engine to be pulled off of the transmission and a bunch of other stuff removed to get to it. Not a job for the back yard.
A couple of months later I told here to take it to Tony when the clutch needed changing.
Hey, it was more fun to drive than an MGB or TR7.
#28 How did you like it overall? Reliability, performance, etc.?
#9
I had one of those 70’s fiats. A boxy green thing that got pretty good mileage but was shot by about 70k miles. It rusted out and the engine lost compression. I think it’s still sitting out at my brothers farm. It’s probably mostly compost by now.