Chrysler is making “continued progress in gaining cost concessions from its key constituents as the company pursues a global strategic alliance with Fiat,” the automaker has said.


Chrysler also acknowledged it had previously “engaged in discussions that pursued a consolidation partnership with General Motors. After a series of exchanges, GM stated that the option of a consolidation was ‘off the table’,” the statement said.


“The Fiat alliance enhances our viability plan, and we’re pleased with the progress of our discussions with Fiat. Meetings with all key constituents regarding concessions are collaborative and productive. These initiatives are totally aligned with our viability plan requirements, and will make Chrysler stronger and more competitive,” CEO Robert Nardelli said in a statement emailed to media.


The potential alliance would benefit Chrysler by preserving jobs and strengthening its viability plan and give the US firm immediate access to substantially all Fiat group vehicle platforms, which would complement its current product lineup with fuel-efficient, environmentally friendly small cars and powertrain technology, “saving Chrysler years of development time and billions in costs”, the statement said.


Using Fiat’s distribution system, Chrysler would be able to greatly increase the global reach for the Chrysler, Dodge and Jeep brands in markets outside of North America, “thereby creating incremental production volume to help fill idle capacity at existing Chrysler manufacturing plants”.

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Chrysler added: “This alliance is completely in line with US Treasury’s request for significant restructuring actions, concessions from constituents including employees, the UAW, dealers, suppliers, lenders and Chrysler Financial, development of fuel-efficient vehicles, and long-term overall viability.


It was also [conditional] on US government approval of Chrysler’s upcoming viability plan submissions.


Noting it had received $4bn of the $7bn requested from the US government, with $3 billion to be distributed pending the interim review of its viability plan on 17 February, and final review on 31 March, Chrysler said: “It is important to note that no US taxpayer funds would go to Fiat”.


The statement said the automaker was “working to meet all guidelines as defined by the terms of the loan from the US Treasury and looks forward to presenting its viability plan on 17 February”.