Chrysler says it has the framework for a proposed alliance with Fiat, but not a final agreement. The two automakers have until April 30 to meet requirements set by the Obama administration in order to receive $6 billion more in government loans. Bloomberg reports:
The revised accord calls for Fiat to take an initial stake of less than 35 percent and hold no more than 49 percent until after Chrysler repays its U.S. loans, a government official with knowledge of the plans said in an interview late yesterday.
"The risks for Fiat remain limited. They'll have to build a new plan together," said Marco Santino, an auto-industry consultant at A.T. Kearney in Rome. "At this point it's a technicality whether Fiat takes a stake before or after Chrysler's turnaround."
Under the new arrangement, Fiat would assemble engines and vehicles in the U.S., the government official said. The Turin, Italy-based automaker hasn't sold its namesake vehicles in the U.S. since 1983, restricting the company's offerings to luxury models from Ferrari and Maserati.
Requirements set by the Obama adminstration call for Chrysler to convince its debt holders to forgive the "vast majority" of the $8.9 billion it owes, and for the company to reach a deal with the United Auto Workers union over its retiree health-care trust fund.