Chrysler, Cerberus and Fiat announced early this morning that they have signed a non-binding term sheet that aims to establish a global strategic alliance. The alliance comes as part of Chrysler's viability plan and would give the American manufacturer access to competitive, fuel-efficient platforms and powertrains. Additionally, both automakers would be able to access one another's distribution capabilities, manufacturing capabilities and supplier base.
In exchange for helping Chrysler into non-North American markets and other considerations, Fiat would get an initial 35 percent equity interest in Chrysler. The alliance doesn't indicate that Fiat would make a cash investment or commit to funding Chrysler in the future.
"This initiative represents a key milestone in the rapidly changing landscape of the automotive sector and confirms Fiat and Chrysler commitment and determination to continue to play a significant role in this global process" said Fiat CEO Sergio Marchionne. "The agreement will offer both companies opportunities to gain access to most relevant automotive markets with innovative and environmentally friendly product offering, a field in which Fiat is a recognized world leader while benefitting from additional cost synergies".
"A Chrysler/Fiat partnership is a great fit as it creates the potential for a powerful, new global competitor, offering Chrysler a number of strategic benefits, including access to products that complement our current portfolio; a distribution network outside North America; and cost savings in design, engineering, manufacturing, purchasing and sales and marketing" added Bob Nardelli, Chairman and CEO of Chrysler LLC. "This transaction will enable Chrysler to offer a broader competitive line-up of vehicles for our dealers and customers that meet emissions and fuel efficiency standards, while adhering to conditions of the Government Loan".
Of course, the alliance is still subject to various regulatory approvals, including the U.S. Treasury.
photo:Fiat
In exchange for helping Chrysler into non-North American markets and other considerations, Fiat would get an initial 35 percent equity interest in Chrysler. The alliance doesn't indicate that Fiat would make a cash investment or commit to funding Chrysler in the future.
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"This initiative represents a key milestone in the rapidly changing landscape of the automotive sector and confirms Fiat and Chrysler commitment and determination to continue to play a significant role in this global process" said Fiat CEO Sergio Marchionne. "The agreement will offer both companies opportunities to gain access to most relevant automotive markets with innovative and environmentally friendly product offering, a field in which Fiat is a recognized world leader while benefitting from additional cost synergies".
"A Chrysler/Fiat partnership is a great fit as it creates the potential for a powerful, new global competitor, offering Chrysler a number of strategic benefits, including access to products that complement our current portfolio; a distribution network outside North America; and cost savings in design, engineering, manufacturing, purchasing and sales and marketing" added Bob Nardelli, Chairman and CEO of Chrysler LLC. "This transaction will enable Chrysler to offer a broader competitive line-up of vehicles for our dealers and customers that meet emissions and fuel efficiency standards, while adhering to conditions of the Government Loan".
Of course, the alliance is still subject to various regulatory approvals, including the U.S. Treasury.
photo:Fiat