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Feds want Fiat to take smaller stake in Chrysler

by Bill Cawthon on

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.

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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