From Reuters
Italian carmaker Fiat is in talks with Chrysler regarding a possible stake in the struggling U.S. automaker, a source close to the Italian group said Monday.
“Between the two groups, there is talk about Chrysler possibly using Fiat technology in exchange for a stake,” a source told Reuters, speaking on condition of anonymity.
The source told Reuters a deal with Fiat would help Chrysler make vehicles that produce fewer harmful emissions.
“To get financing, U.S. (carmakers) have to show that they are really committed to developing over the short term a new family of vehicles that pollute less,” the source said. “By itself, Chrysler would not be able to meet this condition.”
The talks between Fiat and Chrysler were reported by auto industry publication Automotive News Europe earlier in the day on its website.
The publication cited unnamed sources as saying Fiat could take a stake of up to 35 percent in Chrysler and give the U.S. automaker access to platforms, engines and transmissions.
Chrysler, the No. 3 U.S.-based automaker behind General Motors Corp. and Ford Motor Co., received $4 billion of U.S. government loans to avert collapse and Chief Executive Bob Nardelli said last week it was counting on $3 billion more.
It had requested $7 billion of U.S. government aid.
GM, which also received government money, and Chrysler are required to meet cost-cutting targets as a condition of the aid, including reducing labor costs and restructuring debt as well as demonstrating that they have plans to be viable.
“In today’s economic environment, talks are going on between companies in all industries – ours is no different,” Chrysler said in a statement in response to the reports of talks between the automaker and Fiat.
“Chrysler LLC as a matter of policy however, does not confirm or disclose the nature of its private business meetings,” the automaker said. “Beyond those partnerships and alliances already announced, Chrysler has no further announcements to make at this time.”
Chrysler owner, Cerberus Capital Management, declined to comment on the report. A Fiat representative was not immediately available for comment.
