US government gives Chrysler April 30 deadline to strike Fiat deal
According to the New York Times Monday reports, for the Auburn Hills, Michigan-based Chrysler to qualify for additional loans from the US government, it must strike a deal with Italian auto biggie Fiat SpA by April 30. As per the terms of the alliance, Fiat would receive a 35 per cent stake in Chrysler, but would provide no cash infusion.
In case Chrysler, the third largest automaker, fails to materialize the projected pact with Fiat by the set deadline, it would receive no more aid from the government, because the Obama administration would not consider it a viable stand-alone company.
However, with Chrysler having said that the proposed Fiat deal could be worth nearly $10 billion, if the alliance comes through, the US administration would give another $6 billion loan to the distraught Chrysler, which reportedly needs another $5 billion over and above the $4 billion it received in December.
Fiat CEO Sergio Marchionne said that presuming that if the agreement between the two automakers is approved, Fiat will produce its first model with Chrysler in 2011.
Earlier this month, Chrysler CEO Robert Nardelli had said: "The proposed Fiat alliance provides significant benefits to Chrysler. Fiat would make available to us its entire product portfolio and powertrain technology, worldwide distribution capabilities for vehicles we produce today and synergies in the areas of purchasing and engineering."