Fiat steps in to save ChryslerFiat announces partnership with Chrysler
01 May 2009
Fiat announced today that it will form a ‘global strategic alliance’ with Chrysler to help form a ‘vibrant new company’. The Italian carmaker is currently popular for its small stylish remake of the classic Fiat 500, which goes on sale in convertible form this summer.
Chrysler, Jeep and Dodge vehicles to continue
Fiat has been talking to Chrysler for more than a year about a partnership in which the two companies would share products and technology.
The partnership will give the European firm better access to the American car market and a more global distribution network.
Green engine technology
In return Chrysler stands to benefit from using Fiat’s more advanced ‘green’ engine technology in its vehicles. Fiat sells an Eco version of its family hatchback that's fitted with a fuel-efficient and environmentally friendly, sub 120g/km diesel engine.
Chrysler chairman Bob Nardelli, who will step down when the bankruptcy is complete, said that in the future Chrysler would be able to produce a more competitive line-up of fuel efficient, environmentally-friendly vehicles. The first alliance vehicles that would offer greener driving could go on sale within 18 months.
America’s third-largest car company will also benefit from up to $8 billion more in government aid to honour current car warranties.
Chrysler was forced into bankruptcy yesterday after some creditors refused to agree to the US government’s proposals regarding its debts.
Fiat to make 40mpg Chrysler
The American government hopes that the bankruptcy proceedings can be finalised in 30 to 60 days. Chrysler’s American factories will close next week and not reopen till the proceedings are complete, but dealerships will stay open.
At the end of the proceedings, Chrysler will be 55% owned by the United Auto Workers union and Fiat will have a 20% stake in the company. It will be able to increase this to 35% in three stages if it completes certain criteria.
These include producing a 40mpg Chrysler vehicle in the US, introducing a fuel-efficient range of American-built engines and using the Fiat network to improve global distribution of Chrysler vehicles.
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