Chrysler’s strategic alliance with Fiat should help the Michigan automaker become more viable within the global auto industry, but the move has raised more than a few eyebrows in Washington. With Italy’s Fiat now owning a 35 percent stake in the embattled automaker, many on Capitol Hill are questioning Chrysler’s need for government bailout money.
Chrysler desperately needs federal funding to keep its doors open, but many in our Nation’s capitol are worried about the political backlash that could accompany floating a foreign-backed Chrysler even more of the country’s hard earned dollars.
However, Chrysler claims its deal with Fiat sticks to the terms of the federal loan package. When announcing the deal earlier this week, Chrysler said the new agreement with Fiat “would provide management services supporting Chrysler’s submission of a viability plan to the U.S. Treasury, as required.”
Chrysler and its financial arm have already secured $5.5 billion in low interest loan from the federal government, but the automaker is still seeking an additional $3 billion, according to Automotive News.
A decision on whether to give Chrysler more federal funds will likely be handed down in March, but the outlook isn’t as promising as it once was for Chrysler. Chrysler’s recent deal with Fiat reportedly contains a clause that would allow the Italian automaker to acquire another 20 percent stake in Chrysler, giving Fiat a controlling majority stake and possibly an excuse for the U.S. government to punt Chrysler’s problems to Italy.
01/21, 4:59 PM
posted by:
inline6
Um, LLN,
WHO in Washington is worried about the Fiat tie-up? What source do you have in saying that Chrysler’s access to bailout funds may be in jeopardy because of Fiat’s 35% stake?
Fiat’s stakeholding isn’t even official yet.
So unless you can cough up some sources, this story is not only scaremongering, but completely without merit or support.
Let’s see some sources, LLN.
01/21, 5:02 PM
posted by:
yarddog82abn
Then maybe Fiat needs to buy Benz’s shear of Chrysler first, then move on to the the other 35%…
After Washington reviews to see if the merger is good… I’m just saying…
01/21, 5:41 PM
posted by:
hummah
What a mess. Just let FIAT have half and Nissan/Renault the other half and we’ll send this whole deal overseas and save $5 billion in the process. We could use that money to bail out the porn industry instead.
01/21, 5:49 PM
posted by:
mayer_ray_nagin
Yes, this money could be better used to pay for His Highness’ Coronation yesterday.
Ohhhh the joy of seeing Garth Brooks perform again!
01/21, 5:58 PM
posted by:
miket
Didn’t the article yesterday say that they signed a “non-binding” agreement to purchase 35% of Chrysler…
for zero dollars of course…..
How does a “non binding agreement” jeopardize anything?
01/21, 7:10 PM
posted by:
anti-believer
We must save the porn industry!!!
Dyer need!!!
**** Chrysler! Porn is more important.
01/21, 9:36 PM
posted by:
johnnycanuck
…but seriously folks, isn’t Chrysler already like the porn industry since they’re in a deep hole and willing to screw with anyone?
01/21, 10:37 PM
posted by:
DrFill
HRR
This has nothing to do with the New President
If Chrysler was smart, they’d have announced this after getting the check
But…….
Senators would have a tough time explaining to their constituents why the banks have money, but don’t give credit, and why foreign-ish companies benefit from US taxpayers funds
Fiat could have swooped in at this time just to take advantage of this windfall
It’s President Obama’s mess now
Like he doesn’t have enough knuckleheads to straighten out!
DrFill
01/21, 11:54 PM
posted by:
Xile
HRR –
I’m probably going out on a limb with this one buy my guess is that you are an asshole. Am I close?
01/22, 12:09 AM
posted by:
MurcieMe
agreed…
01/22, 1:11 AM
posted by:
idrinorbarsaku
suck on that chrysler…you’re not getting any of my hard earned tax dollars!!!!!!!!
01/22, 4:29 AM
posted by:
sharpie
Fiat’s 35% stake means nothing with regards to the bailout money, unless Congress plans to give $5.5 bill to Chrysler to give out as dividend. If the $5.5b is operation money, then this is just an excuse to take the money back. Of course, I am assuming there is at least SOME merits to this article to begin with.
01/22, 5:17 AM
posted by:
The Stig
Logically, Chrysler should have never gotten the money in the first place.
01/22, 9:40 AM
posted by:
hangonbig3
Very strong limb Xile……..
01/22, 12:56 PM
posted by:
strongbad
Stop giving Chrysler money. Last time I read, Cerberus has PLENTY of cash. Why am I bailing out Chrysler instead of their cash-laden owners? That is where the backlash should have been, not FIAT’s stake.
Why does Cerberus not have to help Chrysler? Is there something I may be missing? (not be sarcastic – I want a good answer)
01/22, 1:57 PM
posted by:
global_lightning
Perhaps Chrysler has figured out that taking a government money should be the absolutely last option. With federal money comes federal oversight (the ‘Car Czar’). It’s selling your soul. So far Ford has figured out how to turn itself around, mainly by better integrating its European operations and putting out greatly improved products. With this merger, Chrysler-Fiat can do the same, hopefully without taxpayer $$$.
01/22, 2:52 PM
posted by:
ColdCanuck
Let’s see… An Italian company, Fiat, is taking 35% of Chrysler and a German company, Daimler has 20%. Maybe the logical next step is for a Japanese company such as Nissan to grab the remainder. They could call their Chrysler partnership something like, say, the automotive AXIS. But then of course they’d try for world domination and we know where that leads.
01/22, 4:57 PM
posted by:
Bubs Solo
HHR for the record Obama did not screw up during the swearing in…the dude reciting it to him did.