Paladin
KC Hill
Craig Hill
Oracle of DelphiFiat Offers Lifeline To Chrysler
January 22nd 2009 07:58
When Chrysler Australia managing director, Gerry Jenkins, returned to work on Monday he saw a dark, stormy future.
Yesterday the storm clouds lifted with the announcement that Italian carmaking giant Fiat had thrown a lifeline to the embattled Chrysler Group in the US.
Both have signed a global agreement to share models, design, engineering and distribution networks.
The CEO of Fiat Group, Sergio Marchionne said the partnership "is a great fit as it creates the potential for a powerful, new global competitor".
Jenkins said the alliance would also give some security and vision for the future.
"I see pluses on both sides," he said.
Under the terms, Fiat will take a 35 per cent equity stake in Chrysler, which also includes Dodge and Jeep.
Fiat will also provide distribution capabilities in key growth markets, as well as substantial cost savings.
The deal is a key element of Chrysler's viability plan and will provide access to Fiat's small car platforms, engines and components to be produced at Chrysler manufacturing sites.
Chrysler, the third biggest carmaker in the US, has been dodging questions about a possible sale, asset sell-offs or alliances for months.
The company is majority owned by private investment group Cerberus Capital Management, which has no carmaking experience.
Analysts see the move as a strategic life-raft for the embattled US business.
At the recent Detroit Motor Show, Chrysler vice chairman and president, Tom LaSorda, even went as far as to say that the iconic Jeep brand was not for sale.
Fiat has been very successful in executing its own restructuring over the past several years.
In addition, Fiat will provide management services supporting Chrysler's submission of a viability plan to the US Treasury as required.
The alliance will also allow Fiat and Chrysler to take advantage of each other's networks and rationalise their respective manufacturing footprint and global supplier base.
The alliance will be consistent with the terms of the US Treasury financing to Chrysler, which includes contributing to the company's restructuring effort.
The deal is still subject to due diligence and regulatory approvals, including the US Treasury.
Fiat does not intend making a cash investment in Chrysler or commit to funding Chrysler in the future.
Over the past five years Fiat has signed several alliances and partnerships with leading carmakers and automotive suppliers.
The chairman and CEO of Chrysler, Bob Nardelli said the benefits are huge.
"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," he said.
Chrysler has previously has held alliances with Daimler, Mitsubishi and American Motors (Renault).
Herald Sun
Yesterday the storm clouds lifted with the announcement that Italian carmaking giant Fiat had thrown a lifeline to the embattled Chrysler Group in the US.
Both have signed a global agreement to share models, design, engineering and distribution networks.
The CEO of Fiat Group, Sergio Marchionne said the partnership "is a great fit as it creates the potential for a powerful, new global competitor".
Jenkins said the alliance would also give some security and vision for the future.
"I see pluses on both sides," he said.
Under the terms, Fiat will take a 35 per cent equity stake in Chrysler, which also includes Dodge and Jeep.
Fiat will also provide distribution capabilities in key growth markets, as well as substantial cost savings.
The deal is a key element of Chrysler's viability plan and will provide access to Fiat's small car platforms, engines and components to be produced at Chrysler manufacturing sites.
Chrysler, the third biggest carmaker in the US, has been dodging questions about a possible sale, asset sell-offs or alliances for months.
The company is majority owned by private investment group Cerberus Capital Management, which has no carmaking experience.
Analysts see the move as a strategic life-raft for the embattled US business.
At the recent Detroit Motor Show, Chrysler vice chairman and president, Tom LaSorda, even went as far as to say that the iconic Jeep brand was not for sale.
Fiat has been very successful in executing its own restructuring over the past several years.
In addition, Fiat will provide management services supporting Chrysler's submission of a viability plan to the US Treasury as required.
The alliance will also allow Fiat and Chrysler to take advantage of each other's networks and rationalise their respective manufacturing footprint and global supplier base.
The alliance will be consistent with the terms of the US Treasury financing to Chrysler, which includes contributing to the company's restructuring effort.
The deal is still subject to due diligence and regulatory approvals, including the US Treasury.
Fiat does not intend making a cash investment in Chrysler or commit to funding Chrysler in the future.
Over the past five years Fiat has signed several alliances and partnerships with leading carmakers and automotive suppliers.
The chairman and CEO of Chrysler, Bob Nardelli said the benefits are huge.
"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," he said.
Chrysler has previously has held alliances with Daimler, Mitsubishi and American Motors (Renault).
Herald Sun
| 44 |
| Vote |
subscribe to this blog
