Chrysler Fiat Deal - Merger D-Day 2 Weeks From Today

What does the coy Fiat management have to say about its taking a 35% stake in any future Chrysler profits in exchange for giving Chrysler Fiat's valuable green power technology.... Nothing.

Chairman Luca Cordero di Montezemolo said Thursday to the Wall Street Journal's Dow Jones he expects a 50% chance for the Italian car maker to reach a deal with Chrysler LCC, adding that in the 50% event the deal doesn't take place then Fiat has a "Plan B."

U.S. President Barack Obama has given Chrysler until April 30 to find a partner or face bankruptcy proceedings. If Chysler finds a partner then the congress and the president have guaranteed the combined management, Chrysler and its partner, $6 billion from the U.S. taxpayers.

Chrysler was already unsuccessful in getting concessions from debt holders. Now the President's "car czar", whatever that means, appears to be ethically challenged much like the many other super-rich "public servants" and "public company" CEOs, throwing into question Rattner's and the President's statist car industry plans. Enter Fiat.


For its part Fiat CEO Sergio Marchionne told Toronto's Globe and Mail yesterday that Fiat will walk away from the proposed partnership with Chrysler if Canadian and U.S. auto workers don't agree to wage, salary, and pension concessions that align labor costs with foreign-owned "non-legacy" i.e. - no pension, low wage, non union etc. car factories such as Toyota's and Nissan's, which have plants in the less expensive southern states like Kentucky, North Carolina, Alabama. The Canadian union has been seen as being even more resistant than its U.S. counterpart. Many U.S. taxpayers may be surprised to find out how much of Chrysler's factories are in Canada.

The U.S. government's stern warning to Chrysler is it won't be getting any more bailout money unless it completes the partnership deal by May 1. Chyrsler's action today on the stock markets signals that investors and traders, maybe speculators, believe a deal is coming soon. Let's hope so lest catching falling knives wipes the shareholders out 2 weeks from today. WebVisionItaly will continue to monitor the last two weeks of the courtship between Chrysler Fiat.

Who's Buying Chrysler? Fiat?

Well they say there are silver linings in all things and with Chrysler's demise comes Fiat's solid entrance into the American market with the backing of governments and our banks.

I have to smile because of my memories of hopping into the boot of our 1974 Fiat convertible, cruising top down in what seems now the gold old days, riding in what was the first car I remember. We loved the convertible so much next came the four door, which was our last when it fell apart after over heating one day while driving to Cape Cod. Since then its been VWs.

Fiat benefits from the deal with Chrysler because it gains distribution for its Fiat 500s to sell in Chrysler's car dealerships around the United States. Both Fiat and Chrysler need their taxpayers money to stay afloat. And maybe if the little Fiat 500 can give the VW a run for its money, well maybe there will manufacturing jobs to build Fiat 500s on Chrysler's lines in Detroit and around the U.S. WebVisionItaly.com does hope Chrysler and Fiat can get from here to there without the government's money. WebVisionItaly.com is looking forward to the Fiat 500's entrance to the United States - it's been to long!