AUBURN HILLS, Mich., Jan. 20 /PRNewswire/ — 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
