Jun 11, 2009

Fiat Chrysler deal shifting to high gear

After being propped up by $15.5 billion in U.S. Treasury loans between January and May, Chrysler entered Chapter 11 bankruptcy protection in April.

The deal with the Italian automaker will give Fiat 20 per cent of the new company in return for a transfer of technology, with the stake expanding to 35 per cent if targets are met.

The United Auto Workers union is to hold 55 per cent of the group, the US government 8 per cent and the Canadian government 2 per cent.

The tiny Fiat 500 (shown above with Jim Press, president and vice-chairman of Chrysler) is one of the first cars Chrysler hopes to build in North America through its new alliance with Fiat.

An article at the second link below wonders if Americans can learn to love Fiat.

In Italy, the joke is that Fiat stands for “fix it again Tony.”

How excited will Americans be about buying a tiny Fiat, with a Chrysler name-plate, built in a factory whose principle owner is the United Auto Workers union when It was the UAW’s unrealistic demands, along with GM, Ford and Chrysler’s cave-in to those demands, that got the U.S. automakers in trouble in the first place.

I have been loyal to American automakers - until now. We just replaced a Chrysler built van that served us well for the several years. After more than 200,000 miles it was replaced recently by a Toyota van. We are just not inclined to buy a UAWmobile.

More of the Chrysler/Fiat story here and here.