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Old 09-29-2010, 05:01 AM   #4
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Join Date: Nov 2009
Posts: 636

When I first saw that story I was going to post something about it, but upon further reading, it seemed that Fiat was completely denying the story. I tried to look at it from a logical standpoint.

In the end of Daimlers career with the company, they paid $650,000 million to Cerberus to get rid of Chrysler. The reason they couldn't get any better deal was the un-funded UAW pension liabilities they're saddled with. Then Cerberus immediately went round the world trying to slice and dice the company, willing to sell off any bits they could...with no takers. Feingold, Feinberg...whoever he is, apparently offered the treasury Chrysler for a buck, if they'd take it off his hands.

Now Fiat has control of the keys to the product cabinet for free. Although they can't make anything on the company through profits till the Feds are paid off, they can take anything and everything not nailed down. I'm not sure what they'd benefit from buying into the company, since they can't profit until god knows how many billions are repaid. In light of recent history I'm not sure I can see anyone putting actual cash money into Chrysler other than the government.

Now, if there's a deal somewhere whereby if they own 51% they're off the hook with the government bailout funds...then I can see far in the distance, a foggy picture of why it would make sense.

Bottom line, if it's true I think it means good things for Chrysler. That'd say to me, someone other than the endless deep pockets on the other end of the IRS, feels they're worth more alive than dead. If Fiat were putting their own money into Auburn Hills that would be a big deal. Whether or not the taxpayers get paid back is all together another story. But at face value, seems pretty far fetched to me.
Ralph is offline   Reply With Quote