Lifeline may be too late
The Italian carmaker Fiat is to take a 35% stake in cash-strapped United States giant Chrysler as part of a transatlantic alliance between the two manufacturers, but experts fear it may come too late to save the Detroit-based company.
In a wide-ranging deal, Fiat and Chrysler will share manufacturing technology, pool their distribution networks and seek savings from joint suppliers. The arrangement will give struggling Chrysler access to Fiat’s expertise in building small, fuel-efficient, affordable cars—an increasingly crucial market in which the US firm has traditionally been weak.
Chrysler’s position is widely considered to be the most perilous of Detroit’s “big three” manufacturers.
Craig Fitzgerald, an industry analyst at Plante & Moran in Michigan, said Fiat’s involvement would provide benefits in reaching new geographic markets, but he questioned whether it would aid the firm’s immediate survival.
“What isn’t clear to me is whether it’s going to be sufficient to really change the medium- and near-term outcome.”—.