Chrysler-Fiat Updates
Chrysler has issued an update to its earlier statements that Fiat SpA would assume liability for a portion of Chrysler’s debt equal to the Italian automaker’s stake in the alliance.
In a statement issued on Friday, Chrysler said: “As a potential result of the ongoing discussions taking place related to the Fiat alliance, Fiat would become an equity holder with the same rights and responsibilities as all other equity holders in a newly restructured company. To clarify, this does not mean Fiat would assume responsibility for any of Chrysler LLC’s debt.”
On Tuesday, Chrysler CEO Bob Nardelli said Fiat would be assuming a portion of Chrysler’s debt. The statement was quickly followed by a denial from Fiat.
The alliance depends on Chrysler’s receiving additional government-backed loans. Late Friday evening, financier Steven Rattner, a leader of the Obama administration’s automotive task force, seemed to indicate the U.S. government might be favorable to the alliance as the task force is not yet satisfied Chrysler could make it as a stand-alone company.
“We have not made a determination on whether they could exist on a stand-alone basis, but we do find their idea of partnership with Fiat a worthy idea to consider,” Rattner said in a Bloomberg Television interview.
Rattner was also quoted as saying Chrysler and General Motors might require funding beyond what they have already requested.
“What they’ve asked for depends on them achieving plans that are somewhat ambitious. Like all management teams, they tend to take a reasonably, slightly perhaps, optimistic view of their business. So it could be more. I can’t rule that out.”
Rattner was also complimentary to the CEOs of Chrysler and GM, saying, “They’re good guys really trying hard to run those companies. I have nothing bad to say about them.”
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