Italian automaker to take ownership stake in Chrysler

Chrysler and Italian automaker Fiat announced a tentative alliance on Jan. 20 that will give Fiat an ownership stake in Chrysler while granting the American company  access to fuel-efficient technology.

As of now, the partnership between the two companies is not definite. If the deal passes, the agreement is said to go into effect this April, but Chrysler must first meet the requirements put forth by the U.S. Department of the Treasury for a loan agreement in the Fiat deal, Chrysler Director of Communications Lori McTavish said.

The Italian car company will gain a 35 percent ownership in the Chrysler deal, and in return, Fiat will provide Chrysler with the fuel-efficient technology necessary to get ahead not only in U.S. markets, but overseas as well.

In the past, Chrysler has been known for its sport utility vehicles, minivans and pick-up trucks, making Fiat’s fuel-efficient technology a major advantage.

Chrysler is no stranger to partnerships. In the past, Chrysler has teamed up with Jeep, Global Electric Motorcars and Dodge on various deals. McTavish said alliances provide significant strategic benefits that support Chrysler’s viability and long-term competitiveness.

“Alliances and partnerships have been a cornerstone of the restructuring Chrysler began in 2007,” McTavish said in an e-mail.

Mike Sciscoe, an employee at Chrysler Town and Country in Bloomington, said employees were not very worried about losing their jobs through the alliance.

“I don’t believe anyone is worried about it,” Sciscoe said. “We’ll know more in March or April.”

Bob Nardelli, chairman and CEO of Chrysler, said on Jan. 23 in a message to all current Chrysler employees that the deal was made to give Chrysler an economic advantage over the competition.

“This alliance has the potential to greatly benefit America,” Nardelli said, “by preserving American jobs, stabilizing the economy including the important domestic auto industry and expanding the availability of small, fuel-efficient automobiles.”

Nardelli has also stressed the fact that the alliance with Fiat is non-binding, which means that Chrysler has the opportunity to end the partnership.

“This represents a positive business strategy for Chrysler in today’s economic environment,” Nardelli said.