>> Tuesday, March 31, 2009
In accordance with the terms required to secure a loan from the U.S. government—and in a plea to not have its legs broken—Chrysler had no choice but to spill lots of juicy info on future products in its viability plan submitted to the U.S. Treasury last week. (The company revealed product plans through 2015 via a chart/map included with the plan.) It also presented details and answers to questions regarding its proposed alliance with Fiat. What does Fiat want from Chrysler? What benefits is Chrysler looking for from the alliance? Sifting through the 177-page document answers a lot of these questions, but it also raises many more in the process.
A Quick Overview
According to Chrysler, Fiat is among the 10 best-selling brands in Europe and it also builds the vehicles that produce the lowest level of CO2 emissions. Chrysler also cites 60 percent of Fiat’s sales as coming from A-, B-, and C-segment cars, precisely the types of micro, small, and compact vehicles Chrysler is most interested in obtaining through a Fiat partnership, along with small engines that have low emissions and good fuel economy. It is also hungry for tech bits that aren’t currently in its arsenal, such as high-pressure common-rail diesel technology and dual-clutch transmissions (Getrag was initially tapped to source DCTs to Chrysler, but the agreement was abruptly cancelled last fall). On the other side of the coin, Fiat is looking to add strength to a couple of areas of weakness: larger vehicles and bigger engines. Chrysler is the neediest partner in the proposed alliance, which is why Fiat would obtain a 35-percent stake in Chrysler and an option to acquire an additional 20 percent based on achieving performance targets. The partnership would effectively create the sixth-largest global automaker by volume if it goes ahead. Will it be approved? Will it work? It’s anyone’s guess, but here’s a rundown of what could spawn from the relationship.