Fiat 500 coming here sooner than later?

Fiat is interested in a stake in Chrysler to enter the North American market with the return of the Fiat 500 and a network for Alpha too!!!

How cool would that be?

http://www.bloomberg.com/apps/news?pid=20601087&sid=amM1wjdFTH1E&refer=home

 

Here is an extensive update

Give me the 500 Abarth version!







Autocar.co.uk

Fiat and Chrysler have signed an agreement that could result in Chrysler using Fiat platforms and engines, while Fiat takes a 35 per cent stake in Chrysler.
Rumours of talks between the two companies have been building in the last 24 hours, and this morning Chrysler issued an official statement about the plans.
“The alliance, to be a key element of Chrysler’s viability plan, would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler manufacturing sites,” said the company.
Chrysler would also gain access to Fiat’s international distribution network, which would help it to get its products into new markets.
Fiat wants access to the US market so it can relaunch Alfa Romeo there, and the deal would give it a ready-made distribution network in the form of Chrysler’s 3372 North American dealers. It is also said to be keen to launch the Fiat 500 in the US.
Fiat would also help Chrysler with the restructuring plan required by the US Treasury as part of an agreement to use taxpayer’s money to keep it afloat, drawing on Fiat’s experience with its own successful restructuring.
Fiat would not have to risk huge sums on Chrysler, however. “The alliance does not contemplate that Fiat would make a cash investment in Chrysler or commit to funding Chrysler in the future,” said Chrysler’s statement.
Chrysler finds such ventures extremely attractive. It has already signed such an alliance with Nissan, which, among other things, is producing a small car for Chrysler’s Latin-American market. Chrysler will also build a replacement for the Nissan Titan pick-up. And the firm recently began assembling a version of the Grand Voyager for Volkswagen, badged Routan.
Such moves are “logical,” said a senior Michigan-based source. He added that a full-blown merger is by no means out of the question, but cautioned that, in the current environment, it is not something to be rushed into.
Both makers face financial challenges. And while Chrysler has received a $4 billion loan from the US government, it must still provide a solid plan, proving its viability, before the end of March.
It is unclear if the US government would require that money to be paid back, should Chrysler merge or be acquired by a foreign car maker. On the other hand, some government leaders would be pleased to see a merger, as that could help secure Chrysler’s future.
During a visit to last week’s Detroit motor show senator Bob Corker, a Tennessee Republican who voted against the bailout, said that Chrysler should either “merge or go away”.
Dan Stevens/ Paul Eisenstein





Fiat gets 35% stake in Chrysler for no cash
Italian group will provide technological expertise and management services
By Aude Lagorce, MarketWatch
LONDON (MarketWatch) -- Italian carmaker Fiat SpA on Tuesday struck a deal to get an initial 35% stake in struggling U.S. carmaker Chrysler in exchange for its technological expertise, distribution network and management services.
Fiat (IT:F: news , chart , profile ) , the maker of the Cinquecento car, will pay no cash for its stake or commit any funding in the future. Chrysler's majority owner, private-equity group Cerberus Capital Management, will see its 80% stake in the group diluted.
Fiat shares rose 3.4% in Milan afternoon trading.
Chrysler said the alliance, a key element of its viability plan, will provide it with "access to competitive, fuel efficient vehicle platforms, powertrain and components to be manufactured at Chrysler sites." Fiat will also lend its distribution networks in key growth markets and provide "management services" supporting Chrysler's submission of a viability plan to the U.S. Treasury as required.
"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 compliment our current portfolio; a distribution network outside North America; and cost savings in design, engineering, manufacturing, purchasing and sales and marketing," said Bob Nardelli, Chairman and CEO of Chrysler.
Fiat's management talent also appealed to the U.S. carmaker. Fiat Chief Executive Sergio Marchionne is credited in the industry for pulling the Italian group back from the brink of collapse by overhauling production techniques, increasing the speed at which new cars are released and boosting their design appeal. Fiat last year sold 2.5 million vehicles worldwide. Chrysler sold two million cars and trucks.

marketwatch article




Fiat Group, Chrysler and Cerberus Capital Management L.P. Announce Plans for a Global Strategic Alliance




AUBURN HILLS, MI - January 20, 2009: Fiat S.p.A., Chrysler LLC (Chrysler) and Cerberus Capital Management L.P., the private investment majority owner of Chrysler LLC, announced today they have signed a non-binding term sheet to establish a global strategic alliance.

The alliance, to be a key element of Chrysler's viability plan, would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler manufacturing sites. Fiat would also provide distribution capabilities in key growth markets, as well as substantial cost savings opportunities. In addition, Fiat would provide management services supporting Chrysler's submission of a viability plan to the U.S. Treasury as required. Fiat has been very successful in executing its own restructuring over the past several years. The alliance would also allow Fiat Group and Chrysler to take advantage of each other's distribution networks and to optimize fully their respective manufacturing footprint and global supplier base.

The proposed alliance would be consistent with the terms and conditions of the U.S. Treasury financing to Chrysler. Per the U.S. Treasury loan agreement, each constituent will be asked to contribute to Chrysler's restructuring effort including: lenders, employees, the UAW, dealers, suppliers and Chrysler Financial. Such steps would greatly contribute to Chrysler's long term viability plan. Completion of the alliance is subject to due diligence and regulatory approvals, including the U.S. Treasury.

As a consideration for Fiat Group's contribution to the alliance of strategic assets, to include: product and platform sharing, including city and compact segment vehicles, to expand Chrysler's current product portfolio; technology sharing, including fuel efficient and environmentally friendly powertrain technologies; and access to additional markets, including distribution for Chrysler vehicles in markets outside of North America, Fiat would receive an initial 35 percent equity interest in Chrysler. The alliance does not contemplate that Fiat would make a cash investment in Chrysler 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. 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. The deal follows a number of targeted alliances and partnerships signed by the Fiat Group with leading carmakers and automotive suppliers over the last five years aimed at supporting the growth and volume aspirations of the partners involved," the CEO of Fiat Group, Sergio Marchionne said.

"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 compliment our current portfolio; a distribution network outside North America; and cost savings in design, engineering, manufacturing, purchasing and sales and marketing," said 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. The partnership would also provide a return on investment for the American taxpayer by securing the long- term viability of Chrysler brands in the marketplace , sustaining future product and technology development for our country and building renewed consumer confidence, while preserving American jobs."

"This is great news for the UAW Chrysler team and we look forward to supporting and working with them to ensure Chrysler's long term viability," said Ron Gettelfinger, President United Auto Workers (UAW).

"We're on board with this important strategic initiative as it will help preserve the long-term viability of our great company, its brands and of course UAW-Chrysler jobs," said General Holiefield, Vice President, United Auto Workers (UAW).

About Chrysler LLC

Chrysler LLC, headquartered in Auburn Hills, Mich., produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. Total sales worldwide in 2008 were 2 million vehicles. Outside of North America, 2008 was the second-best sales year in the last decade and the third-best ever for Chrysler International. Chrysler LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300 and Town & Country, Jeep Wrangler and Grand Cherokee and Dodge Challenger and Ram. In the fall of 2008, Chrysler introduced three advanced electric-drive vehicle prototypes - the Dodge EV, Jeep EV and Chrysler EV. One is targeted to be produced in 2010 for consumers in North American markets, and European markets after 2010.

About Fiat

Founded in 1899, Fiat is an automotive-focused industrial group, serving customers in more than 190 countries around the world. With some 185,000 employees, 114 R&D centers and 178 plants worldwide, the Fiat Group designs, manufactures and sells passenger cars (Fiat, Lancia, Alfa Romeo, Abarth, Maserati and Ferrari), agricultural and construction equipment (CNH Case New Holland), trucks and industrial vehicles (Iveco), and automotive components (FPT Powertrain Technologies, Magneti Marelli and Teksid). www.fiatgroup.com ; www.fiatgroupautomobilespress.com




Fiat shares crash because of partnering with a huge american company!





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Jan. 21 (Bloomberg) -- Fiat SpA dropped to the lowest in at least 24 years in Milan trading after analysts said the automaker’s planned alliance with Chrysler LLC may increase costs and saddle it with a share of the U.S. company’s losses.

Italy’s largest carmaker fell as much as 4.8 percent to 4.21 euros, the lowest since at least Jan. 2, 1985, and was priced at 4.26 euros as of 12:12 p.m. local time. Fiat lost 1.3 percent yesterday after earlier jumping 6 percent on news that it had agreed to take a 35 percent stake in Chrysler.

While Turin-based Fiat will hand over no cash for the holding, the stake indicates the company may have to book losses from Chrysler with no immediate reward, Natixis Securities analyst Georges Dieng said in a note, reiterating a “reduce” rating. UBS AG, an adviser to Fiat on the Chrysler partnership, said the deal is unlikely to offer major short-term benefits.

“Terms of the alliance imply some ‘option’ value but minimal operating benefits,” London-based UBS analyst Philippe Houchois said in a note. Houchois reiterated his “neutral” rating and cut his price target to 5.1 euros from 6.5 euros.

Fiat has declined 7.2 percent this year, cutting the company’s market value to 5.12 billion euros ($6.61 billion).

The tie-up with Auburn Hills, Michigan-based Chrysler might also prove a distraction for Fiat Chief Executive Officer Sergio Marchionne and run up costs just as margins are narrowing, London-based Morgan Stanley analyst Adam Jonas said.

Marchionne ended four years of losses in 2005 after adding models and scaling back spending. The biggest slump in Italy’s car market since 1993 is now forcing him to consider cutting financial goals and Fiat may tomorrow report a 73 percent drop in fourth-quarter net income to 157 million euros, according to a Bloomberg survey of 13 analysts.

‘Indirect Expenditures’

“The initial market read is that Marchionne has struck a ‘free call option’ on Chrysler’s future, with little or no downside,” Jonas said in a note. “However, we would encourage investors to consider Fiat management’s time and attention and indirect expenditures it will likely incur.”

Joint products are unlikely to emerge before 2012 and “this could be an eternity to Chrysler, given its current financial state,” said Jonas, who rates Fiat “underweight.”

Cheuvreux analyst Marco Cristofori in Milan said that while the agreement should be generally positive for Fiat, he does not envisage any significant cost savings in the short term.

Debt Concern

The alliance involves a high “execution risk” for Fiat against a background of “gloomy sales” in Italy, Paris-based Societe Generale credit analyst Pierre Bergeron said in a note. Bergeron revised his recommendation on the company’s credit default swaps to “neutral” from “sell” -- indicating increased concern about Fiat’s ability to repay its debt.

Sellers of default protection on Fiat demanded fees in advance in addition to annual payments today, according to CMA Datavision prices at 11 a.m. in London. CDSs were quoted at 17 percent upfront and 5 percent a year, meaning it cost 1.7 million euros in advance and 500,000 euros a year to protect 10 million euros of Fiat bonds from default for five years. That’s versus 975,000 euros a year and nothing in advance yesterday.

Fiat’s stake in Chrysler will give it a foothold in the world’s biggest auto market while granting the U.S. company access to its small-car technology. The carmakers and Cerberus Capital Management LP, Chrysler’s controlling shareholder, have signed a non-binding agreement, they said yesterday.

The planned alliance is consistent with the terms and conditions of the U.S. Treasury’s bailout of Chrysler and restructuring efforts agreed as part of the refinancing must still take place, the statement said. The partnership won’t relieve Chrysler of the need for $4 billion in loans received from the Treasury, which must approve the deal.

Fiat will provide platforms to manufacture fuel-efficient and small cars to be produced by Chrysler. The pair will share distribution networks, allowing the Italian company to return to the U.S. with its main brands for the first time since 1995. The partnership should be completed by April.