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Fiat to get 35% of Chrysler

by Bill Cawthon on

Fiat SpA, Chrysler LLC and Cerberus Capital Management have confirmed the Italian automaker will take a 35 percent share of Chrysler. There will be no cash involved in the deal.

The agreement will still need to be approved by the Treasury under the terms of the $4 billion loan extended to Chrysler which gives the U.S. government approval of all transactions valued at more than $100 million.

According to the agreement, Chrysler will get access to Fiat’s platforms, powertrains and components that would be produced at a Chrysler facility in the U.S. Fiat would also provide distribution support in key foreign growth markets. Fiat will provide assistance to Chrysler in its preparation of a viability plan to the U.S. federal government.

The new alliance does not commit Fiat to make any cash investment in Chrysler, now or in the future.

The agreement already has the support of the United Auto Workers. In the press release announcing the deal, UAW President Ron Gettellfinger said, “This is great news for the UAW Chrysler team and we look forward to supporting and working with them to ensure Chrysler’s long term viability.”

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.


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