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>> 1/May/2009
- Chrysler & Fiat Merge
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The Chrysler 300C (top) is one of the companies better known vehicles, while Bob Nardelli (above) helped seal the life-saving merger deal with Fiat
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One of the largest mergers in automotive has been approved
by the U.S. Government, as Italian automaker Fiat and American car
maker Chrysler join forces. According to an official statement,
Chrysler "has reached an agreement in principle to establish a global
strategic alliance with Fiat SpA to form a vibrant new company." The
news is very positive for the North American auto industry, which has
been teetering perilously close to a black hole since late 2008 as
domestic new car sales dropped by more than a third, slashing income. Creating
one of the world's largest car companies, the merger came soon after
Chrysler filed for Chapter 11 bankruptcy in the United States after
overnight talks failed to renegotiate billions of dollars of debt. Ultimately however, the bankruptcy filing of Chrysler will not affect the merger. "While I am excited about the creation of the global alliance, I am
personally disappointed that today Chrysler has filed for Chapter 11.
This was not my first choice," said Bob Nardelli, Chairman and CEO of Chrysler. Mr Nardelli later announced that he would step down as CEO once the bankruptcy filing was over. The
U.S. government will sink another $8 billion in Chrysler to clear its
debts, becoming a large stake holder in the car maker until the
government loans are repaid. Once this has happened, Fiat
can take over as majority stake holder in the merged company if it
meets certain benchmarks, like developing fuel efficient engines to be
built in America and improving overall fuel efficiency of Chrysler
vehicles. This will result in more Chrysler brand vehicles being
sold in Europe, and more Fiat brand vehicles being sold in the United
States, which is expected to bolster sales for the new corporation. "This
partnership transforms Chrysler into a vibrant new company with a
wealth of strategic advantages," said Bob Nardelli, Chrysler CEO. "It
enables us to better serve our customers and dealers with a broader and
more competitive line-up of environmentally friendly, fuel-efficient
high-quality vehicles. Benefits to the new company include access to
exciting products that complement our current portfolio, technology
cooperation and stronger global distribution," added Nardelli. "We
want to personally assure everyone that the new company will produce
and support quality vehicles under the Jeep, Dodge and Chrysler brands
as well as parts under the Mopar brand," said Nardelli. The
merger has saved Chrysler from dying a slow death and is expected to
benefit both companies in the future and as the global financial crisis
eases up in 2010 and beyond. <Back
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