Chrysler and Italy’s Fiat have finalised an alliance creating the world’s sixth largest carmaker.
Under a US government orchestrated restructuring plan, Chrysler’s best assets will now be moved into a new company with the rest remaining in bankruptcy. Fiat’s Chief Executive Sergio Marchionne will take over day-to-day running of Chrysler. The largest part of the new Chrysler is now in the hands of the retirees medical trust fund of the US carworkers’ union the UAW. Fiat – which has put no money in – got the next biggest share – 20 percent – with the rest split between the US and Canadian governments. With this move Fiat hopes to gain scale to beat the worst crisis the car industry has ever seen. Chrysler’s sales of big gas-guzzling vehicles have tanked and hopes Fiat’s expertise can help it develop more fuel-efficient cars. In the long term, Fiat could increase its stake to more than a third but only after Chrysler repays the billions it owes the US government. The White House welcomed the completion of the new alliance and said it was “poised to emerge as a competitive, viable automaker” adding it hoped the same thing happens for General Motors.