Fiat closes Chrysler deal
June 11, 2009 by David Twomey
Fiat SpA has closed its acquisition of Chrysler’s strongest assets, a key step in the Italian carmaker’s ambitious plan to create a global player to ride out the worldwide automotive sales downturn.
The deal, announced jointly by Fiat and Chrysler, revives the 84-year old US carmaker that had been down to its last dollars before government intervention in late 2008.
It also completes a fast-track reorganisation for Chrysler, directed by President Obama’s administration.
Other parts of Chrysler will remain in bankruptcy to be sold or closed.
Fiat Chief Executive Sergio Marchionne became CEO of the new Chrysler Group LLC on Wednesday.
The carmaker’s former CEO, Bob Nardelli, will return to Cerberus Capital, the former majority owner of Chrysler, as an adviser.
Chrysler’s former vice chairman and president, Jim Press, has been named Marchionne’s deputy chief executive, and Fiat’s chief financial officer, Richard Palmer, has been named Chief Financial Officer of the new company.
In a memo to employees, Mr Marchionne voiced optimism about the new company’s outlook.
“There is no doubt in my mind that we will get the job done,” he said. He called the alliance “a bold first step to implement” lessons learned.
Mr Marchionne added that Fiat would begin the process of transferring Fiat’s technology, platforms and powertrains to Chrysler plants in the next few months.
In addition to Fiat, Chrysler Group LLC is owned by a union-aligned trust and the US and Canadian governments, which have taken over the best parts of Chrysler.
The White House welcomed the completion of the deal and said the new alliance was “poised to emerge as a competitive, viable automaker.”
The Canadian government said a restructured Chrysler is good for the Canadian automotive parts supply chain and for Canadian consumers.
The completion of the Chrysler sale, in roughly the time frame planned, has been seen by analysts as a good omen for the prospects of completing a similar process for General Motors, which filed for bankruptcy on June 1.
The GM sale is expected to take longer due to the size and complexity of the leading US-based carmaker. GM will be majority owned by the US government when its sale is completed.
Print it: 
Fiat…
Let us bow-down to our new super overlords…
OMG what an unholy union. This is going to have so much future comedy value, I cant wait?
Former Fascist and Communist countries are really buying into the ‘arsenal of democracy’ huh.
Really this should be a win-win but the nationalities and passions of both companies will creat a huge mess. Not to mention politics, language barriers, time zone differences, culture… everything!
You thought the Crossfire was bad. You ain’t seen nothing yet.
I, for one, welcome our new automotive overlords. I’d like to remind them that as a trusted TV personality I could be helpful in rounding up others to toil in their underground oil caves.
GREAT news, lets get down to business now, remember it was THE only lifeline that C was going to get, dont know why some Seppo’s where only think of themselves and not the rest of the country and associated folk.
The crown in the pack is JEEP, a icon brand.
Be nice if we could get a idea what new is planed for Europe, USA and of course other markets like Aus. most of the stuff is to US focused, need to look at the wider picture
On to SAAB now Sergio!
Cheers
F-0
Hmmmmm! The good floks here in the good ole US of A are giving FIAT 2 years before the whole shooting match goes under. Seriously, Mercedes/Daimler bought Chrysler out a few years ago and with all of their great manufacturing ability, clever engineering, finances and even using some of their top shelf engines and platforms, they could not make a go of Chrysler. With FIAT you have a company with a history of making so many unreliable rust buckets. FIAT’s and Alfa’s have a shocking track record here in the States with problem cars. The joke here is that they abandoned the local market here to avoid the Lemon laws. I wish them well and hope Chrysler survives. But that is more of a wish than reality.
The greatest-ever Spaghetti Western is about to unfold.
“Hey Luigi, we can’t start the factories yet, we still have 600,000 cars sitting on the grass?”
As much as I like to see this relationship work I don’t see it happening.
As some of you have said FIAT has a reputation for producing unreliable vehicles. The same can be said for Chrysler in the states if you look at recent surveys.
Put them together and what do you get?
Hmmm… The only positive I can take from this is that the latest FIAT vehicles like the 500, Grande Punto and Ritmo are actually decent with no real issues reported. Hopefully they’ve taken a step forward in terms of quality and reliability and can inject some of this in to Chrysler.
I only feel for all the workers and hope they can keep their jobs.
IMO nothing good will come out of this.
Hey Captain Dickhead racism and Australia are like a pie and sauce arent they skippy?
Captain Mainwaring, you sound like a real dumb aussie redneck and the reson this country is 20 yrs behind europe
Captain watch how you speak about our new Automotive Overlords!
Aussie’s suffer from Tall Poppy Syndrome, when someone outdoes them they have to find ways to bag them.
I wouldn’t bag this union just yet based on Fiats CEO’s track record. Sergio Marchionne has turned FIAT around in a spectacular way. They were acutally in a worse off position than Chrysler was. He managed to get $1billion out of a GM deal and paid off their debts and now actually have good products that Europeans and latin americans are now buying. The Germans are buying their little cars in droves now because quality is now as good as any German equivalent (though not as good as the Japenese). They are currently the only car company GROWING in the world. Further, they legitimatly have the best small car engine technology/platforms in the world. They invented the common rail diesel engine for example and are about to launch the 3rd generation when the rest of the world is still using the 2nd generation (and paying royalties to Fiat!).
Anyway, Fiat has now secured a distribution network to the biggest car market in the world for FREE thanks to the American tax payer!!
Fiat and Marchionne know what they are doing. Everything Johnno said is accurate. Just a few years age they were Europes 9th largest car manufacturer, today they are the 4th largest nudging Opel & Renault out of the way this year.
They are the only major car company growing in 2009 with a backdrop of a -15% market decline and 12 months of negative growth across all European sales.
2008 sales vs 2009%
Fiat + 9.7
VW/Audi – 4.2
Peugeot -14.7
Ford -6.3
GM Europe -13.3
Renault -14.0
Mercedes -26.3
BMW 31.2
The Fiat Group is the leader in Robotic Technology called “comau” selling it under licence to other manufactures. In addition they also have their FPT “Fiat Powertrain Technologies” division which manufactures Engines/Gearboxes/axles and sells it under licence to other interested parties. (5.3 million sold in 2008)
Dont underestimate the Fiat Group they will access rear wheel drive platforms from Chrysler for Alfa Romeo etc and like Johnno said access the worlds largest market and it did’nt cost them a cent….it’s all cream.
Frankly speaking, FIAT can’t sell any cars in the USA (possibly the world’s most unrestricted car market) and hardly any body in Australia is buying FIAT cars and it’s not due to high price. It has been passed from distributors to distributors. Given FIAT’s build quality and reliability it isn’t hard to figure out why. As for Europe and Italy, protectionism is there for FIAT to survive.
AAA – its understandable your reservations around FIAT given their past chequered history. They thoroughly derved it. However, I encourage you not to be caught in the past. Otherwise you would still be stuck thinking AUDI is still REALLY bad like they were in the 70’s. They almost went bankrupt and look at them now. Leading Merecedes in benchmark quality.
Fiat is a totally different company than even 4 years ago. Otherwise the germans, british etc wouldnt be buying their cars in droves now. Further, look to latin america where in places like Brazil they have the largest market share of ALL car companies now, so its not just Europe with its protection laws in place that they are excelling.
Maserati is a serious contender and sales have grown ten fold in the last 5 years, Ferrari continues to be regarded highly and even quirky Lancia is making some interesting cars. Alfa unfortuantely, despite the massive lift in quality, has not hit the sales mark (they have become dull to drive) but Sergio Marchione is on to it.
They are serioulsy on the move, even just been beaten to the post to buy GM europe to become the 2nd largest car manufacturer in the world. Its all thanks to this Canadian Italian CEO Sergio Marchionne bloke……
Who knows what will happen in America. However, the American car buying public I think will be pleasantly suprised with the quality on offer now if they can get around perceived quality prejudices……