FIAT & Chrysler in merger talks
January 20, 2009 by Matt Brogan
Fiat is in negotiatiions with Chrysler LLC to form a strategic partnership that could include a Fiat equity stake in the ailing American manufacturer. The pact would greatly help Chrysler to speed and strengthen its restructuring plan.
According to people close to the source in both Turin (Italy) and Detroit (USA), Fiat could give Chrysler access to its mini, small and mid-sized car platforms, engines and transmissions.
This would allow Chrysler to quickly build a new range of front-wheel-drive, low-emission vehicles, something Chrysler has already planned for with Nissan who are to produce a small car based on the Dodge Hornet concept (pictured below) by 2010.
If the deal is completed, Fiat would get between a 30 and 35 percent stake in Chrysler in exchange for Fiat’s platform, engines and transmission technology. This would be expanded to a share up to 55 percent over time.
The two companies have signed a memorandum of understanding on the alliance, which could be announced within days.
“In today’s economic environment, talks are going on between companies in all industries, ours is no different,” Chrysler said in a prepared statement today. “Chrysler LLC as a matter of policy however, does not confirm or disclose the nature of its private business meetings. Beyond those partnerships and alliances already announced, Chrysler has no further announcements to make at this time.”
Due to the time difference a Fiat spokesman was not immediately available to comment. Chrysler’s majority owner, Cerberus Capital Management LP, declined to comment. Thomas Froelich, a spokesman for Daimler AG in Stuttgart, declined to comment (Daimler still owns 19.9 percent of Chrysler).
Print it: 
WOW should be good for Chrysler not sure though for FIAT what are goion to get a share in a failing company
I love the 300C (want one!) and I also love the 200C concept (want two!), but I agree with Jamie – Chrysler is a lame duck and, for the sake of kindness and humanity, should be shot right now.
I can’t see Fiat or anybody being willing to buy equity in Chrysler for anything more than a song, reminiscent of when that Chinese mob bought Rover/MG for $1. Chrysler has little or nothing to offer Fiat other than a 12-year-old hand-me-down RWD platform from Merc-Benz, and as such probably can’t be used by Fiat anyway due to the likelihood of fine print on the arrangement between MB and Chrysler.
I wish Chrysler Corp all the best, but frankly – the outlook is grim for the entire US auto industry, and grimmer still for Chrysler.
Can’t see much point other than FIAT using existing Dealer network etc to penetrate the American market.Possibly rebadged small FIATS sold as Chryslers?
I can’t stand Chrysler It shows promise with cars like the 300c and 200c concept aswell as the Challenger but then produce cars like the Sebring and Avenger and that’s the thing, there isn’t enough promise in Chrysler to make a merger worth while. Can you see a Fiat 500 bieng sold alongside a Dodge Ram in the south?
All this can do is hurt Fiat’s reputation and market value.
GUYS GUYS GUYS…..read between the lines, FIAT need to be in the N.American market, so to get a dealer network all set up and ready to go would be priceless…
Mind you it needs 2 Americans to outsmart 1 Italian, if the deal goes ahead then it will be written up in the same way as the GM deal was, FIAT will not bleed out of this, it will be the Yanks [thats if it fails]
Frankly, i think all that FIAT is interested in is JEEP, they could NOT give a shit about the car divs.
Lets see what happens
Cheers
F-0
Thank God anyone other than G.M getting their dirty hands
on Chrysler
I’d rather FoMoCo any day having a share or joint venture.
I think some of you are right in Fiat looking for a dealer network. Small cars for sure, but comercial vehicles through those outlets are probably more on the cards. Particularly as comparatively economical Motor Homes. Fiat cars can always be tagged to Ferrari outlets as a low volume niche market car in the states. The Paris types would fall for that in an instant.
Tell you what: I’d love to import a Charger and convert it to RHD. Sure it’s just a re-dressed 300C, but you’d be the only bugger in town with one – and they look pretty tough, imo.
That’s off-topic though. Right on the money with the dealer network observation – silly not to have picked it myself.
Damn, Chrysler just can’t exist without being married to another carmaker.
Just let the company die, fiat could then buy the dealer network for peanuts and not have to sit in the same meeting room with the can’t do anything without a partner Chrysler people.
Surely Fiat will study where Merc went sour while in bed with Chrysler and avoid a similar theft of expertise by the americans.
Bad move FIAT..
In the 80’s Chrysler was somebody, now…Just let em die in peace they cant help you…
Unless FIAT wants some of that bail-out money???
he…he….heh!
What can u get out of Fiat? Unreliable cars? In the GM-Fiat merger a couple of years ago.. GM got nothing out of Fiat and they had to pay Fiat US$2 billion to get away from Fiat.. Fiat is smart.
If Mercedes-Benz couldn’t help Dodge-Chrysler what chance does Fiat have? Although a Hemi Powered Punto would be awesome
AAA-
GM got Diesel technology from the deal… Fiat is very good at this. They own Iveco as well, who uses diesel.
Wheelnut-
Fiat has been through alot of trouble in the last decades and have become a professional at strategy reform.
After all they run 3 other successful car companies as well as AVIO and a few others.
From what ive read-
“Under the terms of the deal, Fiat will get a 35% stake in the troubled US firm in return for access to its fuel-efficient vehicle technologies.”
Looks like Fiat is using this deal to use Chrysler factories and distribution. Chrylser gets better technology for fuel efficient small cars and money they badly need….
I can’t see why any car manufacturer would want to take on any US based car platform, ideas, etc. I think Chrysler needs FIAT’s great small engines that are powerful and economical.
Basically, this is Chrysler saying “We can’t build small cars if our life depended on it, someone else, please help”.
Either way, people in the US will have better cars and FIAT will have market penetration. WIN-WIN. Lets hope.
I’d hate to see a rebadged Chrysler with a FIAT logo on it… Christ! I just had a shiver.
SteveC
Most mergers that have taken place over the last few years have ended in acrimony and tears. This will be no different.