Last week, President Obama gave Chrysler 30 days to work out a merger with the Italian car maker Fiat, the United Auto Workers union and its debtors. Chrysler's Vice Chairman Jim Press has been working hard, along with many others, to iron out such an agreement.
Press tells Renee Montagne that it is possible that Chrysler could eventually be majority owned by Fiat; however, the two companies are still in negotiations, and the outcome remains to be seen.
"It's hard to predict because there are so many moving pieces and so many parties involved," Press says. "Everybody is working hard to the same objective, and that is to achieve good positioning with all of the constituents involved and to get on with the business of building great cars and trucks and making customers satisfied."
Press explains that under any deal brokered, anyone Chrysler owes money to would have some equity in the American car company — including the union, Fiat and the U.S. government, which has agreed to give Chrysler a $6 billion bridge loan.
If the merger with Fiat goes through, the loan is meant to enable Chrysler to stay in business until it can start reaping the benefits from the partnership. Most analysts believe it would be 18 months before Press' company would see any benefit from a merger.
The biggest problem Chrysler and other automakers are facing, Press says, is the unprecedented drop in demand. He believes that as the economy starts to recover, pent-up demand may help with the company's bottom line.
Fiat is a popular brand in Europe and makes smaller, more fuel-efficient cars — the kind of cars Chrysler needs to compete with Honda and Toyota. Those two brands dominate the small car market in the United States, but Press believes Chrysler can hold its own against them.
"Our objective isn't to be the biggest company," he says. "We don't need to sell 10 or 12 million cars or trucks a year. We can compete, not with them for size, but we can compete for superior products, for customer satisfaction, for things that are important in the marketplace."