Since the economy is falling down like nobody business, more company are struggling to survive. A lot of method is taken to save their company. As for Fiat and Chrysler, they opt to sign alliance agreemeent so that they can ease off during this economy turndown.
Read the full story of Fiat and Chrysler sign alliance plan from the star.
Fiat and Chrysler said today they have signed a non-binding agreement for a strategic alliance that would give the Italian auto empire a 35% stake in the troubled US carmaker.
The two companies said in a joint statement they would share technologies and vehicle platforms. Under the proposed alliance, Fiat would not invest cash in Chrysler but would provide access to its successful small- car platforms, as well as to its more environmentally friendly and fuel efficient engines.
The statement said Fiat would take an “initial” 35% stake, suggesting the deal may be broadened. It stressed that under the agreement the company is not committing to funding Chrysler in the future.
For Chrysler, the deal would mean breaking out of the North American market and gaining access to more competitive products.
“A Chrysler-Fiat partnership is a great fit as it creates the potential for a powerful, new global competitor, offering Chrysler a number of strategic benefits, including access to products that complement our current portfolio (and) a distribution network outside North America,” said Bob Nardelli, chairman and CEO of Chrysler LLC.
Fiat Group SpA, which makes Fiat, Lancia and Alfa Romeo vehicles, is trying to re-enter the United States market. The company has expressed interest in bringing its Fiat 500 compact car and the Alfa Romeo brand to the US.
The alliance is subject to a review of company finances and regulatory approvals, including by the US Treasury Department, which last week announced an emergency bridge loan for Chrysler, which analysts say will have difficulty surviving as an independent company.
The Treasury Department said last Fri it will provide a US$1.5bil loan to Chrysler’s financing arm, Chrysler Financial, and the automaker plans to offer zero-percent financing on several models and expand lending to car buyers with less than ideal credit.
Nardelli said the partnership would provide a return for taxpayers on the loan, “securing long-term viability of Chrysler brands,” boosting consumer confidence and “preserving American jobs.