Chrysler has finally reached a deal with its unions in the United States and Canada that could allow the ailing automaker to finally ink a strategic alliance with Italy’s Fiat, but a new report indicates Fiat could be interested in a Chrysler tie-up even if the U.S.’ third largest automaker is forced into bankruptcy.
Sources close to the situation revealed to Automotive News that Fiat would be interested in a Chrysler alliance even if the Michigan automaker is forced into bankruptcy. Sources indicated Fiat would continue to work with the U.S. Treasury Department to get a deal finalized.
The Obama administration has given Chrysler until April 1 to hammer out a deal with Fiat or face possible bankruptcy. However, President Obama has indicated Chrysler’s failure to reach an agreement with Fiat would result in Chapter 7 liquidation, not Chapter 11 protection. It remains unclear if Fiat is preparing for the former or the latter.
Chrysler is currently living off government loans and stands to secure another $6 billion in federal aid by inking an alliance with Fiat. Chrysler’s recent deals with the UAW and CAW were viewed as the last major hurdles in that alliance, with only further lender concessions standing in the way.
