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Treasury Pushed Reluctant Chrysler Into Fiat Deal

By Kevin Spak,  Newser Staff

Posted Jun 6, 2009 9:21 AM CDT
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(Newser) – The Obama administration foisted the Fiat alliance on Chrysler, brushing aside its concerns about Fiat’s financial health and unwillingness to share technology, the Wall Street Journal reports. E-mails filed during Chrysler’s bankruptcy proceedings show Fiat ignoring requests for documents, reluctant to ante up funds, and attempting to change contract terms late in the talks. Chrysler officials worried that they, and the government, might find themselves “in bed with a shady partner.”

Treasury was so intensely involved in negotiations that it once chastised Chrysler’s CEO for working on Daimler issues without Treasury’s okay. In one e-mail, a Chrysler official derisively calls the department “God.” In another, a government lawyer calls a lawyer for dissident debt holders a “terrorist.” Chrysler says any comments from the e-mails reflect hyperbole in the heat of negotiations, and the administration says any concerns about Fiat have been worked out.

In this May 26 photo, liquidation signs fill the windshields of new cars in the showroom of the Timberline Dodge dealership in Portland, Ore.
In this May 26 photo, liquidation signs fill the windshields of new cars in the showroom of the Timberline Dodge dealership in Portland, Ore.   (AP Photo/Don Ryan)
Chrysler President James Press testifies before the Senate Commerce, Science and Transportation Committee to defend the decision to slash dealerships around the country, June 3, 2009.
Chrysler President James Press testifies before the Senate Commerce, Science and Transportation Committee to defend the decision to slash dealerships around the country, June 3, 2009.   (AP Photo/Alex Brandon)
In this May 7 file photo, a Fiat logo is seen on a car retailer's window in Milan, Italy.
In this May 7 file photo, a Fiat logo is seen on a car retailer's window in Milan, Italy.   (AP Photo/Luca Bruno, file)
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COMMENTS
Showing 1 of 1 comment
justme
Jun 6, 2009 4:08 AM CDT
One step closer to European socialism. Not only do we own pieces of private companies, we decide who they deal with and what the deal will be. For anyone that thinks that this is a good thing, remember that the US is pulling out of this recession faster than Europe, mostly because our private enterprises react and adjust faster than government run bureaucracies.

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Chrysler • mergers and acquisitions • Robert Nardelli • Treasury Department • auto industry • Fiat

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