Chrysler has announced that it's handed Fiat a 35 percent stake in the company in exchange for the Italian's expertise in the field of building small and efficient cars that people actually want - something Chrysler has demonstrated very little knowledge of.
The news comes just after Chrysler rebuffed claims it was about to be broken up during an emergency press conference
in Detroit, which was held after journalists began smelling takeover-brand smoke. There is categorically no fire, claimed Chrysler just days ago...
In fairness, this agreement seems like an eminently sensible and positive thing to do, and hardly the move of a company about to go bust. The US Government approves - as it must do under the terms of the recent bailout - and the deal means both parties will enjoy the fruits of each other's particular strengths: Chrysler will get Fiat's environmentally sound small petrol and diesel engines and drivetrains (and its penchant for drawing delicious small cars), and the Italian will get access to Chrysler's 3,372-strong US dealer network as it tries to make like Leona Lewis and become big in America.
Chrysler has already forged a similar agreement with Nissan, with the Japanese firm is making cars for Chrysler for various markets, and Chrysler is in turn building a version of Nissan's Titan pickup truck.
And although the agreement hasn't been finalised yet, no money will change hands - but it does signal that a merge could take place at some point if the venture proves very successful, particularly as Fiat has taken such a large chunk.
Mark Nichol - 22 Jan 2009