Car Advice
  • Home
  • »  Chrysler-Fiat merger confusion

Chrysler-Fiat merger confusion

By David Twomey |

Chrysler seems a little confused about the state of play in its merger deal with Italian carmaker Fiat.

The financially-troubled US company first announced that an agreement had been reached, then 30 minutes later it withdrew that statement and said only that a “framework” accord had been reached with Fiat.

The developments came in two press releases immediately after US President Barack Obama gave Chrysler LLC just 30 days to come up with a plan to team up with Fiat S.p.A, if it wants to qualify for up to an additional US$6-billion in aid.

Chrysler originally issued a statement saying it, Fiat and majority owner Cerberus Capital Management LP had reached an agreement on an alliance.

fiat_logo_final

Half an hour later, Chrysler issued another statement, saying it was just a “framework of an agreement.”

Both statements were attributed to Chrysler CEO Bob Nardelli and cited “substantial hurdles to resolve.”

robert_nardelli

Chrysler is currently surviving on US$4-billion in government loans, and President Obama has said his administration will provide Chrysler the working capital it needs to get through the next 30 days.

Chrysler spokesperson, Lori McTavish, said the company issued the second statement to make it clear that there was still work to be done on the alliance.

“Today marks an important milestone for Chrysler,” she said.

“We originally had a preliminary nonbinding agreement; now we have an agreement on a framework. It’s like you’re dating and then you’re going steady,” she added.

On that basis the marriage and the honeymoon could be very interesting!


 
  • davie

    Not the most cohesive approach to PR. No doubt this was driven by Chrysler wanting to have some news to coincide with the US Govt’s announcement.

    I can’t help but feel whilst GM my somehow survive in radically mutated/shrunken form, Chrysler is on borrowed time…

    It does not seem possible that all of the big three can possibly survive this. The longer it goes on, the more the bad news will impact potential customers opinions.

    It also seems that the US taxpayer is getting tired of bailing out companies and is venting that pressure at the US Government. The 200 million dollar bonuses paid to AIG staff recently went down like a lead balloon over there. Obama is no doubt feeling a huge amount of public pressure to show he is an “action man” and has started to get tough taking these failed US companies surviving on taxpayer injections.

  • http://skyline The Salesman

    For some reason i just can not get my head around Fiat and Chrysler merging. It’s like making a vegemite and peanut butter sandwich. It sounds gross and would taste just as bad. So why make it?

  • Johnno

    Fiat absolutely stitched up GM a few years back to the tune of $1 billon. Fiat and GM entered into an arrangement where under a put option, they could force GM to buy their auto division. GM opted out of buying Fiat! This $1billion allowed Fiat to retire debt, invest and get into the strong position thy are in now. (with the exception of Alfa, Maserati/Ferrari/Fiat are all up substantially)
    I get the feeling Chrysler need Fiat more than the other way around (fiat needs a US distribution arm, hence the tie up, otherwise Chrysler will miss out on US$4 billion and more importantly get access to $8 billion worth of cutting edge small car platforms with even better cutting edge fuel efficient engines. Lets not forget that Fiat invented the common rail diesel system and is about to launch the 4th generation (and keep it to themselves this time!). Fiat are in a very strong position to negotiate hard and get access to the American buying public through an allready established network of Chrysler dealers saving them billions of dollars in set up costs. If fiat pulls this off, they will have access to worlds biggest car market for peanuts.

  • jason the american

    well i hope chrysler and and fiat can make a deal. i’m a ford guy but i don’t want to see any of the american car companies go and i look forward to seeing some fiats and alfas in america.

  • Marcoz

    It’s simple you dim wited chrysler chief, Fiat is offering you a LIFELINE, without it YOUR DEAD…and to be honest i hope fiat get out of it while they can and dodge a bullet, chrysler will pull them down like a tonne of bricks…
    I really dont think it is a good paring, now Holden and Fiat that sounds good….hahahahahahh…

  • Elitist

    Americans were always renown to bullying and unfair competition in the marketplace.
    Now that the tables have turned you hear them whine.
    GM did get something out of that Fiat deal, diesel technology they later used in cars such as the astra (punto diesel).

    Johnno said it best..I have nothing to add except Chrysler gets what they are given.

  • Wheelnut

    Salesman says: “For some reason i just can not get my head around Fiat and Chrysler merging…”

    Neither can I However; Maybe Fiat are thinking of making a V-10 Punto.

  • Elitist

    Fiat wants nothing more than distribution, networking and manufacturing plants to make their cars and sell their superior technology to .
    Pushing their technology the Germans stole in the 90′s with their diesel common rail.

    While they’re there, lets have some of that bail out money to pay for it all.

    Oh, yes…..
    and a new candle for halloween…

  • Suzie

    Forget about Fiat! What about Opel? Fiat make good small cars, I admit. I have a 2009 Registered Fiat 500 as a second car for the girlfriend. It’s great. Niffty in town although a bit out of its depth on the Autobahn. Main complaint about the car is the build quality. Fiat’s used to rust, now they don’t, they’re just assembled with rubber bands and Selotape instead. Neighbour just bought a new Opel Insignia. Lovely car. Drove it a couple of times. Really well designed and put together. If Fiat and Opel etc. come together will the build quality at Opel suffer??? That is my worry!