The Fiat Group, Chrysler and Cerberus Capital Management have announced
plans for a global strategic alliance that could save the U.S carmaker and expand the Fiat Group’s global presence.The Fiat Group, Chrysler and Cerberus Capital Management have announced
plans for a global strategic alliance that could save the U.S carmaker and expand the Fiat Group’s global presence.content here
Fiat S.p.A., Chrysler LLC (Chrysler) and Cerberus Capital Management
L.P., the private investment majority owner of Chrysler, announced
yesterday they have signed a non-binding term sheet to establish a
global strategic alliance.
Chrysler has witnessed Fiat’s successful turnaround over the last few years and sees an alliance with the the Italian manufacturer as the best way to compete with global giants such as Renault-Nissan, GM, and Toyota. As part of Chrysler’s viability plan the alliance will provide Chrysler with access to a range of competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler
manufacturing sites. In addition, Fiat will also provide distribution capabilities
in previously unaddressed growth markets and management services supporting Chrysler’s submission of a viability plan to the U.S. Treasury.
The deal does not require Fiat to put down any cash to begin with – the Italian company will receive an initial 35 percent equity interest in Chrysler for retooling a U.S Chrysler plant to produce Fiat models.
“This initiative represents a key milestone in the rapidly changing
landscape of the automotive sector and confirms Fiat and Chrysler
commitment and determination to continue to play a significant role in
this global process. The agreement will offer both companies
opportunities to gain access to most relevant automotive markets with
innovative and environmentally friendly product offering, a field in
which Fiat is a recognized world leader while benefiting from additional
cost synergies. The deal follows a number of targeted alliances and
partnerships signed by the Fiat Group with leading carmakers and
automotive suppliers over the last five years aimed at supporting the
growth and volume aspirations of the partners involved,” the CEO of Fiat
Group, Sergio Marchionne said.
“A Chrysler/Fiat partnership is a great fit as it creates the potential
for a powerful, new global competitor, offering Chrysler a number of
strategic benefits, including access to products that compliment our
current portfolio; a distribution network outside North America; and
cost savings in design, engineering, manufacturing, purchasing and sales
and marketing,” said Bob Nardelli, Chairman and CEO of Chrysler LLC.
“This transaction will enable Chrysler to offer a broader competitive
line-up of vehicles for our dealers and customers that meet emissions
and fuel efficiency standards, while adhering to conditions of the
Government Loan. The partnership would also provide a return on
investment for the American taxpayer by securing the long-term viability
of Chrysler brands in the marketplace, sustaining future product and
technology development for our country and building renewed consumer
confidence, while preserving American jobs.”