A partnership with Fiat partnership is the “piece of the puzzle” Chrysler needs to return to profitability, a senior executive has said.
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Chrysler’s vice chairman Jim Press told dealers: “We see this as not only giving us a lot of solutions to make us viable, but also profitable,” according to Dow Jones Newswires.
“This is a piece of the puzzle that makes the whole thing work. Fiat brings a ton of great products and technology.”
The non-binding deal announced on Monday, and still subject to regulatory approval, would initially give Fiat a 35% stake in Chrysler in return for access to Fiat’s technologies. Fiat has the right to increase its ownership to as much as 55%.The deal still needs regulatory approval.
Fiat will provide Chrysler with four-cylinder engine expertise needed to make more fuel-efficient vehicles, Press told dealers. Chrysler will also have access to Fiat’s full product line including Alfa Romeo and Lancia though the Ferrari brand is excluded.
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By GlobalData“If this doesn’t happen for some remote chance, we do have other options,” Press told about 3,000 US and Canada dealers on a conference call. “The thing we all got to do now is get our next loan approved and make Fiat feel confident by getting out there and getting some business going.”
According to Dow Jones, Chrysler North American sales chief Steve Landry told dealers Fiat would review Chrysler’s books over the next 30 to 90 days during a due-diligence period and both companies would also review the future of brands.
“They got some awesome products and I hope this gives you a spark in your step and makes you feel good that this is a great thing,” Landry said.
Chrysler’s relationships with Nissan Motor to build a small car and with Volkswagen, to which it supplies the Chrysler minivan-based Routan for North American sale, are unaffected, the report added.
Chrysler is also due to build large pickups for Nissan North America when the Japanese firm’s own US-built Titan line comes to the end of its life cycle in 2010-11.
