Chrysler Needs $3B From Feds to Lock Deal With Fiat

The automakers have agreed to an alliance, but only if Chrysler gets another loan
By Jim O'Neill,  Newser User
Posted Jan 21, 2009 9:11 AM CST
The Fiat emblem on a commercial vehicle at the International Motor Show Commercial Vehicles. Fiat and Chrysler signed a nonbinding agreement Tuesday, Jan. 20, 2009, for a strategic alliance.   (AP Photo/Joerg Sarbach, File)
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(Newser) – Chrysler and Fiat have agreed to a deal that would give the Italian automaker a 35% stake in the US company, but there’s a hitch: it doesn't become final unless Chrysler bags another $3 billion from the federal government, reports the Wall Street Journal. The partnership will give Chrysler a technology boost, and Fiat more access to the US markets for its fuel-efficient cars, but it comes with no cash.

Chrysler narrowly avoided bankruptcy by getting $4 billion from Treasury last month. To get a second installment, the company must a demonstrate a viability strategy by Feb. 17. Don't be surprised if another partnership is part of that plan, BusinessWeek writes, because the Fiat deal, which won't really produce results until 2011, isn't going to save Chrysler.