DETROIT – Hallelujah, Chrysler has been saved – again! Fiat is going to take a 35 percent equity position in Chrysler, even though it will not fork over any cash. Instead, Fiat is going to immediately give Chrysler full access to its platforms, powertrains, components and distribution system, and that alone could be worth billions. In addition Fiat will provide management services supporting Chrysler’s viability plan that it has to submit to the U.S. Treasury next month.
This should not affect the product sharing programs Chrysler has with Nissan and Volkswagen, but I�??ll bet Carlos Ghosn at Nissan is kicking himself that Fiat got a hold of Chrysler with no cash involved. However, the deal must still meet with regulatory approval.
Where does this leave Cerberus? Daimler still owns just under 20 percent of Chrysler. With Fiat taking 35 percent, and an option to take that over 50 percent, that means Cerberus will only own 45 percent of Chrysler and maybe less than 30 percent. While the Fiat deal requires Cerberus to maintain ownership in Chrysler, my guess is that the next step will involve management changes at Chrysler. Not immediately, but before the year is over.
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