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Chrysler, Fiat Form Alliance

Automakers Chrysler LLC and Italy-headquartered Fiat SpA have formed a partnership that will give Fiat a 35 percent stake in Chrysler, according to a joint announcement by both companies.  an option to increase the holding to 55 percent. The agreement will give Chrysler access to Fiat's technology and vehicle platforms to build more small and mid-size cars and sell them in North America. Fiat stopped selling cars in the United States in 1983. "This transaction will enable Chrysler to offer a broader competitive lineup of vehicles for our dealers and customers that meet emission and fuel efficiency standards, while adhering to conditions of the government loan," says Robert L. Nardelli, Chrysler's chair. Chrysler received a US$4 billion loan from the government auto bailout. Fiat does not plan to make a cash investment in Chrysler or commit to future funding of the company. The New York Times reports that the agreement includes an option for Fiat to increase its stake to 55 percent, but the companies would not confirm that condition.

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