Feds want Fiat to take smaller stake in Chrysler

The Presidential auto task force is recommending Fiat take a smaller initial share of Chrysler, perhaps a little as 20 percent, far less  than the 35 percent originally proposed. In addition, Fiat would not be able to assume a majority position in the U.S. automaker until all federal loans had been repaid.

Fiat would be able to increase its share to the original 35 percent over time as technology is transferred to Chrysler.

The government is giving Chrysler and Fiat 30 days to reach an agreement the government can accept. Despite some over-dramatization in the media, this is probably not an issue as the original letters-of-intent are due to expire on April 30, just over 30 days from now, the boards of both companies have approved the alliance and Fiat executives met with the task force last week and were presumably briefed on the task force’s reservations.