Fiat Is Chrysler's Only Dance Partner Now, Press Says
February 02, 2009
By Kevin Smith
LOS ANGELES -- Chrysler President Jim Press told a roundtable of media in Los Angeles that the only party the automaker is in discussions for an alliance with at the moment is Italy's Fiat.
"We're in conversation with Fiat only," Press said. "It's a potential alliance that makes a lot of sense. It brings fuel-efficient technology here quickly. It preserves jobs because dealers can expand their market coverage, and we use excess North American manufacturing capacity. We get a platform for export back into Fiat's worldwide distribution."
Last week, at a similar roundtable in Maryland, Press reportedly said the automaker was keeping the lines of communication open with other parties for an alliance in case the Fiat deal falls through or if U.S. regulators refuse to give it their blessing in order for Chrysler to keep government loans and even receive more.
"If it doesn't work out with Fiat, we still have had other conversations with other potential partners and alliances and those obviously can continue, so we have other alternatives," Press was quoted as saying by the Detroit News.
Press reiterated Friday in Los Angeles that Chrysler talks with other companies about alliances, such as it has with Volkswagen whereby Chrysler builds the Routan minivan for the German automaker. However, he added, Chrysler is only in discussions with Fiat for a major partnership.
Fiat has agreed to take 35 percent of Chrysler's stock for absolutely no cash, but rather for use of its product platforms. Some Congressmen have grumbled that U.S. taxpayers should not keep Chrysler afloat so that a foreign automaker can sweep in and take a significant stake in the American company with no cash.
The Fiat-Chrysler alliance is dependent on Chrysler keeping the $4 billion in government loans and obtaining another $3 billion in loans by the end of this quarter.
In his Los Angeles roundtable, Press assured U.S. taxpayer money would stay in the States. "No proceeds of the loans go to Italy," he said, adding, "but by the way, states and legislators give money to foreign companies every day to attract business and investment."
Chrysler, like General Motors that also accepted government help, must submit the first part of its viability plan to the government on February 17 and the second part on March 31.
Press has insisted even without Fiat, Chrysler has a good viability plan but it absolutely needs the full $7 billion by April 1.
"We feel very comfortable and very excited," Press told the L.A. media. "From the inside, Chrysler looks great -- nothing like the old company. We have a lot of confidence going forward."
Despite urging dealers to order more cars, Press noted that Chrysler isn't out for volume for volume's sake, rather to generate profits for the automaker and its dealers. "Volume is vanity, gross [profit] is sanity," he told reporters.
Press is on national tour, drumming up media support for Chrysler and its government help as well as pressing Chrysler dealers to order more vehicles so Chrysler can keep factories humming and revenues rolling in. He makes a media stop in Detroit on Tuesday.
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