Cerberus to give up stake in Chrysler for Fiat alliance
President Obama made it clear on Monday that Fiat must be part of Chrysler?s plans if it hopes to survive beyond the next 30 days, but Chrysler?s owners, Cerberus Capital Management, apparently won?t be a part of the future Chrysler? should the ailing automaker make it.
According to The Detroit News, Cerberus has agreed to give up its 80.1 percent stake in Chrysler should the Michigan automaker ink a strategic alliance with Italy?s Fiat. However, Cerberus would retain its stake in Chrysler Financial, with the first $2 billion in profits earmarked for a government repayment.
It remains unclear exactly how Cerberus? ownership of Chrysler would shake out but, as Fiat is set to gain a 35 percent share of Chrysler, something had to give. Daimler, Chrysler?s former partner, still retains a 19.9 percent stake in Chrysler.
The Obama administration gave Chrysler a 30-day time limit to partner with Fiat or face Chapter 7 bankruptcy liquidation. While initial reports are optimistic the two auto giants can combine in a month?s time, there are still plenty of hurdles that threaten the success of the deal.
There where reports that Obama wanted Cerberus to leave. Apparently Daimler is also being told to get out.
What a disaster.
Shall we take bets now about Chrysler still being around in 30 days?
Quote from: nickdrinkwater on March 31, 2009, 04:19:56 PM
Shall we take bets now about Chrysler still being around in 30 days?
Well Fiat could potentially save them. The problem is that the Obama administration does not want them to own more then 20%. I wonder if Fiat will commit it's own rather scarce money if it will not get a controlling stake.
I am so glad I don't have a Chrysler vehicle right now.. imagine the drop in value if I have a plebeian Chrysler vehicle.. it would be like owning a Daewoo.
Quote from: NomisR on March 31, 2009, 04:25:12 PM
I am so glad I don't have a Chrysler vehicle right now.. imagine the drop in value if I have a plebeian Chrysler vehicle.. it would be like owning a Daewoo.
But wait, BO already vowed to cover the cars warranty - doesn't chrysler have a 10 year powertrain warranty!?!?!? LOL
So Daimler owns about 19% of the company now, Fiat will own 35%...that leaves 46% that Cerberus may or may not own in 30 days or less...
Hmmm...
Quote from: r0tor on March 31, 2009, 04:29:02 PM
But wait, BO already vowed to cover the cars warranty - doesn't chrysler have a 10 year powertrain warranty!?!?!? LOL
Lifetime as long as you are the original owner.
Quote from: HEMI666 on March 31, 2009, 05:34:34 PM
Lifetime as long as you are the original owner.
LOL, even better!!!
Quote from: HEMI666 on March 31, 2009, 05:34:34 PM
Lifetime as long as you are the original owner.
Yup, there goes the resale value..
I'll tell my mom that it's now a good time to get that PT Cruiser or Sebring 'vert she always wanted.
Quote from: the Teuton on March 31, 2009, 05:42:17 PM
I'll tell my mom that it's now a good time to get that PT Cruiser or Sebring 'vert she always wanted.
Providing if she never wants to sell it and never totals it.
Fiat to gradually build equity in Chrysler; European products to come stateside
Following the Obama administration?s virtual green light approval of the proposed Chrysler-Fiat merger, the Italian automaker?s top executives headed for Detroit to finalize the deal. Early reports indicate that the Italian automaker will begin with a 20 percent stake in Chryslerthat could grow as high as 55 percent as certain milestones are reached.
A source familiar with the discussions between Chrysler and Fiat told the Detroit News that the milestones could include such points as the first Fiat engine being engineered for use in a Chrysler and the completion of the first shared platform.
Initially, Chrysler and Fiat had said that the Italian automaker would take a 35 percent share in Chrysler as part of a no-cash exchange of equity. Chrysler would also provide a North American distribution network for Fiat and Alfa Romeo products, while Fiat would supply Chrysler with small-displacement engines, small car platforms and an improved European distribution network.
The insider source said that it was not Fiat or Chrysler who forced the change, but rather the Obama administration?s automotive task force.
?We believe we will arrive at a result that will establish a credible future for this crucial industrial sector,? Fiat CEO Sergio Marchionne said in a statement.
European product arrival
Though it?s too early for either party to confirm which Fiat and Alfa Romeo-badged products will arrive in North America, Fiat President Luca Cordero di Montezemolo did issue a statement that should be encouraging to enthusiasts anxiously awaiting the return of the Italian automaker?s products.
?If an agreement is concluded, as we hope, in the next few weeks, it will present an extraordinary opportunity,? he said.
?Having access to a major network such as Chrysler?s, we will be able to enter the U.S. market with automobiles, which we are sure will be appreciated for their innovative content, style and advanced technology. Despite the difficult period it is currently experiencing, the U.S. market still remains the greatest opportunity and challenge.?
All this hoo-hah is getting annoying. Hurry up and make a decision.
lolz... the cure for detroits woes are letting the italians buy a company and giving them a spring board to drastically increase the Big 3's competition for selling cars
lolz... GOBAMA GO
Depreciating be damned, if I ever got my hands on a Fiat 500, I'd go apeshit in a good way. It'd be like a MINI without the premium pricing.
Quote from: GoCougs on March 31, 2009, 04:03:17 PM
What a disaster.
I take it you haven't been following Chrysler over the past few months? It was going to do this deal on its own long before Barack told it anything (actually the White House and Congress were initially opposed to a Fiat-merger).
I'm really getting tired of the government getting it's hands into every little thing. Just don't give them money and stop telling them what to do.