Fiat sharing Chrysler debt? No way
DETROIT — A public tiff between Italian automaker Fiat SpA and Chrysler LLC apparently ended Friday when Chrysler rescinded a statement on its website that Fiat would be responsible for part of Chrysler’s debt if the two companies join forces.
Chrysler, in a Web video on Thursday explaining why an alliance for the two companies would be good for Chrysler and the country, said Fiat would be responsible for 35 percent of what Chrysler owed to the U.S. government.
But Fiat on Friday denied that it would be responsible for any of Chrysler’s debt.
The two companies are talking about an alliance in which Fiat would take a 35 percent stake in Chrysler in exchange for Fiat’s small-car technology.
Chrysler, in a statement issued Friday, reversed the claim and said Fiat would become an equity holder.
"To clarify, this does not mean Fiat would assume responsibility for any of Chrysler LLC’s debt," the statement said.
Fiat Group said Friday that it "intends to make absolutely clear that the proposed alliance will not entail the assumption of any current or future indebtedness to Chrysler payday loans."
The Chrysler video featured CEO Robert Nardelli saying that the company can be viable on its own, but a deal with Fiat would enhance that viability.
Fiat is discussing trading its small-car and small-engine technology for a 35 percent stake in Chrysler in a noncash deal. The deal would help Chrysler bring badly needed small cars to its showrooms while helping Fiat re-enter the American market with the Alfa Romeo brand and the update of the iconic Fiat 500.
In the video, Chrysler said an alliance with Fiat would help it leapfrog five or six years ahead in development of fuel-efficient and clean-air technology.
Any deal with Fiat is contingent upon the company gaining U.S. government approval of its viability plan and the release of additional government loan money to Chrysler.
=”clear:both”>