If GM got a bit of a kicking fom the Obama administration, how about Chrysler? The President’s team has said it doesn’t believe Chrysler can survive alone, so if it doesn’t finalise the deal with Fiat within the next 30 days, it gets no more Government money. Which would inevitably leave it bankrupt.
So, for the moment, the Fiat deal is all there is. If it didn’t happen and Chrysler went under, it’s possible some other company might think it worth buying its Jeep brand at a fire-sale price. Probably Chinese, as happened with MG and Rover.
Whether, in times like these, even the Fiat deal is good enough is another question. Yes it would mean Chrysler could use Fiat small-car platforms and engines, something it desperately needs. But that would take at least two years to get something into the showrooms.
Chrysler made a cute little video about it here.
But could Chrysler, even with Fiat’s help, survive on the US Government loans until then? I still doubt it.
Even the Fiat boss Sergio Marchionne doubts it. He has said that doing the Chrysler deal was like ‘buying a lottery ticket for Fiat shareholders’. In other words, it’s very unlikley that it will come up with a win. But if it does win, it could win big, as Fiat would then own 35 percent of a new, profitable Chrysler and suddenly have a North American footprint.
And hey, like a lottery ticket, the deal costs Fiat almost nothing – Fiat won’t be injecting any cash or shouldering any Chrysler debt.