Chrysler Strikes Global Alliance With Fiat

American Automaker's CEO Says Pact Ensures Brands' 'Long-Term Viability'

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DETROIT ( -- Chrysler Group, rated by auto experts as the weakest of Detroit's three carmakers, said today it has tied up with Italy's Fiat in a nonbinding deal for a strategic global alliance.

Fiat 500
Fiat 500
ROI for taxpayers
Chrysler Chairman-CEO Bob Nardelli announced the alliance this morning in a letter to stakeholders posted on, one of the company's websites. He wrote the partnership would "help the company provide a return on investment for the American taxpayer by securing the long-term viability of Chrysler brands in the marketplace" and allow the automaker to sustain its product development, manufacturing and sales operations in the U.S. The UAW has endorsed the proposed partnership, which he said could be inked by April.

Mr. Nardelli said under the alliance, Chrysler will have access to all Fiat group vehicle platforms (except Ferrari), and boost the global reach of Dodge, Jeep and Chrysler outside of North America. He wrote that Fiat would also benefit from the product and technology sharing and gain access to Chrysler's vehicle platforms and manufacturing capabilities in North America. In addition, Chrysler will help Fiat re-enter the U.S. market.

Looking to get back to U.S.
Fiat has made no secret of its wish to return to the U.S., which it left in 1983 after 20 years. Last May, Fiat CEO Sergio Marchionne said at a foreign-policy forum in Venice that he was looking for a partner to return the brand to the U.S., possibly with the Fiat 500 subcompact.

Robert Nardelli
Robert Nardelli Credit: Doug Goodman
Chrysler Chairman Tom LaSorda told reporters last week at a roundtable during the Detroit auto show that the automaker was still pursuing a partner to co-develop small cars after an alliance with Chinese maker Chery recently unraveled.

Fiat has had other dance partners. In 2000, General Motors Corp. bought a 20% stake in Fiat. But in early 2005, as part of a dicey divorce, GM paid Fiat $2 billion to negate a contract clause that would have forced it to buy the remaining stake it didn't own.

Fiat rebounded from the GM breakup with a Ford Motor Co. tie-in, agreeing to build the small Ford Ka and Fiat 500 together for Europe.

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