Chrysler’s Best option was Fiat

January 22nd, 2009

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Ron Gettelfinger, the president of United Auto Workers said that an association to give Italy’s Fiat 35-percent of Chrysler LLC was the best deal the U.S. automaker could strike to preserve jobs.

Gettelfinger also said “I think we all knew Chrysler needed to partner with somebody. It was a matter of whom and what would do the least harm to people,” and added “Do we want to see Chrysler go away? I don’t think that’s a good idea.” He also suggested that despite all the options, it was the best option.

Gettelfinger was recently speaking at the Automotive News World Congress and he said that he was positive the union could work with the new Congress and the Obama administration. While the big automakers companies in the U.S. are under the pressurethe Bush administration approved $17.4 billion in loans for GM and Chrysler in late December. Chrysler got $4 billion of loans from the administration and says it needs $3 billion more. The terms of the government funding authorized that GM and Chrysler seek deep refreshment stands from bondholders and the UAW and prove that they can be possible by end March.

The union offered its backing for Chrysler’s group-up with Fiat as soon as it was announced earlier this week. Both Fiat and Chrysler’s owner Cerberus Capital Management revealed the terms of a proposed alliance under which the Italian automaker would take a chance in Chrysler’s auto operations in exchange for access to technology and help selling vehicles outside the United States. The deal, however does not involve cash, is dependent on Chrysler securing the additional $3 billion from the U.S. government.

However, the analysts have commented that the deal would strengthen Chrysler’s truck-heavy vehicle line-up. Some also have questioned whether the automaker can find the cash to make the deal work if the U.S. auto market remains down in the dumps. Now, it is matter of time that we will find out how Chrysler’s and Fiat doing together and the result of it.