Chrysler ’s recently announced alliance with Fiat should give the ailing automaker a better shot at survival, but it could also put an end to its federal aid. Reports surfaced earlier this week that some on Capitol Hill were getting wary of the alliance, and now one U.S. Senator has openly spoken out about the pact.
In a letter to President Obama, Senator Robert Menendez of New Jersey said that the U.S. taxpayers should not be responsible for the financial wellbeing of a foreign-backed automaker. Menendez is also a member of the Senate Banking Committee.
“As a potential partnership between Chrysler and Fiat moves forward, I am asking you to address the potentiality of foreign control and require the immediate payback of the loans already dispersed should such a scenario present itself,” Menendez’ letter said.
Fiat’s tentative deal with Chrysler will see the Italian automaker taking a 35 percent stake in the Cerberus-owned Chrysler, but Fiat could end up with a 55 percent stake within a year.
Chrysler has already received $5.5 billion in federal aid, and is seeking another $3 billion. If Congress finds the Chrysler-Fiat alliance goes against the terms of its bailout package, it could force Chrysler to immediate payback the loans.
