What are the consequences of the Chrysler - Fiat partnership?
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265 points
fuzball answered 10 months ago …
Probably a sound psychological play. Chrysler gets no cash from the deal, so no help there. But, the prospect of using Fiat's European connections and the possibility of Fiat using Chrysler factories here in the US to also build Fiats is the main ploy here with the intent to show the money bosses here there is now a more viable plan for recovery, in the hope they will be more lenient with further cash infusions to Chrysler. Smart move. I hope it works.
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216 points
jrj90620 answered 10 months ago …
2 crappy companies hoping that a merger might make one good company.Don't count on it.
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2222 points
readytoretire answered 10 months ago …
Sort of like when Daimler bought them, although they did have some US models, it was too companies that operated in different markets. Chrylser in the North America, and Daimler here and everywhere else. Now we have Fiat and Chrysler. The US is not quite ready for everybody to drive cars like the mini-Cooper, but when gas goes back up, we will eventually go there. With the much higher gas prices in Europe, they have given up big cars for some time.
Interesting that Cerberus gave 35% of Chrysler to get access rights to Fiat knowledge. When you figure that 35% is almost half of what they gave Daimler 7.4B two years ago. But then they have been withdrawing money where they can, and got the government to put in 4B, so they should about break even on their investment, and let the rest go to somebody so it won't look like they made a bad investment decision.
As for Chrysler, more depends on continued handouts from the government than this partnership. And Barney Franks was talking yesterday about if Fiat bought part of Chrysler, the government may ask for its money back.
