Will Fiat Rescue Chrysler? And Will Chrysler Rescue Fiat?

Both Chrylser and Fiat are viewed as facing potentially deadly hurdles in the current economic crisis. Will teaming up allow them to survive? That seems to be the hope. The Wall Street Journal is reporting that Fiat is in talks with Chrysler over the possibility of taking a stake in the U.S. car maker. The news first broke early this morning in the trade publication Automotive News Europe.

No details have emerged on the deal yet. But here’s some background courtesy of Reuters:

Fiat Chief Executive Sergio Marchionne told an industry publication in December that Fiat needed a partner to survive the crisis.

Apart from Ferrari and Maserati, Fiat does not sell cars in the United States.

Before the crisis hit the car industry, Fiat had been looking for ways to enter the United States and had talked to U.S. automakers about the possibility of using some of their production lines.

Owned by private equity firm Cerberus Capital Management, Chrysler saw its sales fall 30 per cent in 2008.

It shut down all its plants for a month at the start of the year to shore up cash and cut inventories of unsold vehicles.

After getting a $1.5 billion loan from the U.S. Treasury, its finance arm is offering zero per cent financing for the purchase of a range of Chrysler vehicles.

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