Chrysler awaits bailout to seal Fiat deal – who are we investing in again?

March 28, 2009

(ChattahBox) — Two days before President Barack Obama is expected to make an announcement on auto industry aid, the boards of Chrysler LLC and Fiat SpA have given executives approval to complete an alliance deal. But the deal may hinges on Chrysler getting additional financing i.e. bailout money according to people with knowledge of the discussions.

The funds are crucial because the Italian automaker has stated it will not pay cash, nor will it assume any Chrysler debt, in exchange for becoming a 35% owner. The question is are we bailing out Chrysler or investing in Fiat?  The proposed deal would require several hundred million dollars in spending in the 2009-2010 period to launch Fiat-based small cars in the U.S. market. Benefits of the deal for Fiat include an opening to the U.S. market, where it wants to sell the iconic Fiat 500 and relaunch the Alfa Romeo brand.

Chrysler has asked for $5 billion in loans from the U.S. Treasury on top of the $4 billion it has already received. Chrysler said it was working with the United Auto Workers, its major union, and with creditors to complete the cost-cutting deals the government has set as a target.


Comments

One Response to “Chrysler awaits bailout to seal Fiat deal – who are we investing in again?”

  1. Chrysler awaits bailout to seal Fiat deal - who are we investing … « Financial Blogger on March 28th, 2009 8:55 pm

    […] Excerpt from: Chrysler awaits bailout to seal Fiat deal – who are we investing … […]

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