Fiat to hold 35% stake in ailing Chrysler

NEW YORK: Italian auto maker Fiat hasentered into a global strategic alliance with Chrysler and would receive 35%stake in the ailing car manufacturer. The alliance would alsoprovide Chrysler which recently received four billion dollars from the Federalgovernment, access to Fiat's fuel-efficient vehicle technologies."Fiat SpA, Chrysler LLC (Chrysler) and Cerberus Capital ManagementLP, the private investment majority owner of Chrysler LLC," would establish a"global strategic alliance", the companies said in a joint statement onWednesday. The Italian car maker would also provide distributioncapabilities in key growth markets, as well as substantial cost savingsopportunities. Pointing out that Fiat would receive "an initial 35per cent equity interest in Chrysler," the statement added that the alliancedoes not contemplate that the Italian auto maker would make a cash investment orcommit to funding Chrysler in the future. Noting that Fiat has been"very successful in executing its own restructuring over the past severalyears", the statement said that car maker would offer management servicessupporting Chrysler's submission of a viability plan to the US Treasury.The Federal government while announcing a bailout package of17.4-billion dollars in December for three auto majors -- Chrysler, Ford Motorand General Motors -- had made it mandatory for these companies to come up witha plan to turnaround their respective fortunes. "The alliance wouldalso allow Fiat Group and Chrysler to take advantage of each other'sdistribution networks and to optimize fully their respective manufacturingfootprint and global supplier base," the statement pointed out.