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.
