Fiat arranged a no-cash deal with Chrysler today that could put the Italian automaker behind the wheel of Chrysler’s operations, the Wall Street Journal reports. Fiat will take a 35% stake in Chrysler with an option for 20% more. Fiat will receive a foothold in the US market, retooling a Chrysler plant to produce its smaller, fuel-efficient cars. Chrysler will get to stick around a while longer.
Chrysler, which already received $4 billion in federal bailout funds, must show a path to viability by March to keep those funds and receive $3 billion more. The partnership will provide both companies with economies of scale and global reach, allowing them to compete with rivals like General Motors and Toyota that each have sold more than 9 million cars annually. Chrysler sold 2 million cars last year, Fiat 2.5 million.