Following the Obama administration’s virtual green light approval of the proposed Chrysler -Fiat merger, the Italian automaker’s top executives headed for Detroit to finalize the deal. Early reports indicate that the Italian automaker will begin with a 20 percent stake in Chrysler that could grow as high as 55 percent as certain milestones are reached.
A source familiar with the discussions between Chrysler and Fiat told the Detroit News that the milestones could include such points as the first Fiat engine being engineered for use in a Chrysler and the completion of the first shared platform.
Initially, Chrysler and Fiat had said that the Italian automaker would take a 35 percent share in Chrysler as part of a no-cash exchange of equity. Chrysler would also provide a North American distribution network for Fiat and Alfa Romeo products, while Fiat would supply Chrysler with small-displacement engines, small car platforms and an improved European distribution network.
The insider source said that it was not Fiat or Chrysler who forced the change, but rather the Obama administration’s automotive task force.
“We believe we will arrive at a result that will establish a credible future for this crucial industrial sector,” Fiat CEO Sergio Marchionne said in a statement.
European product arrival
Though it’s too early for either party to confirm which Fiat and Alfa Romeo-badged products will arrive in North America, Fiat President Luca Cordero di Montezemolo did issue a statement that should be encouraging to enthusiasts anxiously awaiting the return of the Italian automaker’s products.
“If an agreement is concluded, as we hope, in the next few weeks, it will present an extraordinary opportunity,” he said.
“Having access to a major network such as Chrysler’s, we will be able to enter the U.S. market with automobiles, which we are sure will be appreciated for their innovative content, style and advanced technology. Despite the difficult period it is currently experiencing, the U.S. market still remains the greatest opportunity and challenge.”
