03.02.2009 MARCHIONNE: CHRYSLER STAKE IS A 'LOTTERY TICKET'

Sergio Marchionne

According to Fiat Group CEO Sergio Marchionne, in an interview with the Wall Street Journal, Fiat's alliance with Chrysler can be compared to a 'lottery ticket' that could be worth nothing if the American automaker does not recover.

By February 17, Chrysler will present its industrial and it will insert its agreement with Fiat in order to obtain a 4 billion dollar loan from the U.S. government. Marchionne confirmed that the deal with Chrysler includes no payments. Fiat will supply the potential partner with technology to produce compact cars with efficient motors, and will obtain a 35 percent share in return.

Sergio Marchionne said Fiat is still studying the vehicle-production operations of Chrysler and then will turn to its due-diligence analysis of its finances. He explained that they will not "take one dollar from Chrysler" until they finish paying back their loan to the government. "Without confidence in the possibility of helping Chrysler to get out of this crisis, we won't do it", said Marchionne.

If Chrysler obtains the necessary concessions from the unions and creditors, Fiat could invest 3 to 4 billion dollars in technology for the American company in the upcoming years. "We need Chrysler to be structured in a way that once all of these operations are concluded, the lottery ticket will pay off. I do not want to go through the next five years owning 35 percent of nothing, the final goal is to create value for Fiat shareholders".
 

Report: AGI / © 2009 Interfuture Media/Italiaspeed