Eideard

Shhhhh! Do you hear that? Neither do I. I’m talking about reaction from critics of the auto bailout to news that Chrysler will pay back the $7.5 billion that it borrowed from taxpayers of the United States and Canada. Chrysler is raising the cash to pay back its government loans through a combination of bond sales, a commercial loan and a cash infusion from its partner Italian automaker Fiat…

Granted, all this constitutes a refinancing of Chrysler’s debt and the company is far from being out of woods – it still owes the $7.5 billion. But the fact that an automaker that had been given up for dead a few years ago is now healthy enough to convince private investors to pony up billions is a positive sign. And the chief issue among bailout critics wasn’t the long-term survival of Chrysler (they were willing to let the automaker die after all) but whether the company could ever pay back the money it borrowed from the government. Well, it just did.

So Chrysler lives to fight another day, thousands of Americans keep their jobs and the company continues to expand and post profits. Which is good news, unless you are a Toyota state Senator, are paid by a think tank to opine that government can never do anything right, or are an ideologue who’s genetically incapable of uttering the word “government” without immediately blurting out the word “boondoggle.”

Ideologue being the operative word in my humble experience. Usually, the sloganeer is someone who could care less about the lot of someone who spent decades in an auto plant – overpaid for all the fun he had schlepping fenders onto a Chrysler chassis.

Nope. I have a lot more sympathy for the folks who spent a significant portion of their lives in the not-so-healthy atmosphere of an American factory instead of the ivory tower that makes some people “superior” to those getting a paycheck for manual labor.

Marchionne at 2011 Chrysler product launch in Brampton, Ontario
Daylife/Reuters Pictures used by permission

Sergio Marchionne, chief executive of Fiat and Chrysler, has been forced on the defensive after causing a political firestorm in Italy by suggesting he could move the Italian company’s headquarters from Turin to the US…

His comments come just a month after he won tough labour concessions at Fiat’s flagship Turin plant on a pledge that he would not move production to cheaper sites in North America or eastern Europe.

Fiat is a symbol of Italy’s industrial might, and business leaders say any decision by Mr Marchionne to reduce its presence there would have a disastrous effect on the country’s already weak image as a place for foreign investment. Pierluigi Bersani, leader of the opposition Democratic party, demanding an explanation from Mr Marchionne said it was unacceptable for “Turin and the country to become a suburb of Detroit”.

On Sunday, John Elkann, Fiat chairman, sought to calm tension, telling Turin’s mayor that the city would remain a European headquarters of Fiat in any merger with Chrysler…

Fiat said only that Mr Marchionne spoke in his capacity as Chrysler chief executive. Even so, top bankers familiar with Fiat expect Mr Marchionne, who has made no secret of his frustration with Italian bureaucracy and labour relations, to seek to slim down operations in Italy and lead the group from the US…

How does it feel knowing that our economic worth – and guidance from Wall Street and Washington, DC in recent years – has made us as “desirable” as any other 3rd World country?

Fiat Bravo starts at prices below Saturn in Europe

Chrysler has secured court approval to sell most of its assets to a consortium led by Italy’s Fiat. The move, which is backed by both the US and Canadian governments, should enable Chrysler to exit bankruptcy protection in the near future.

Under the terms of the deal, Fiat will control 20% of Chrysler, while 68% will be owned by a union trust, and the two governments will share 12%.

It comes as General Motors is about to file for its own bankruptcy protection.

Under the terms of the Fiat-led deal, creditors holding $6.9 billion of Chrysler debt will receive only $2bn. However, 90% of them backed the deal.

Fiat is not paying anything for its 20% stake, which will give it access to the US car market. It has the option to increase its shareholding in Chrysler in the future. In return, Chrysler will be able to take advantage of Fiat’s expertise in making smaller, more fuel-efficient cars in its existing US factories.

The introduction of much of the broad Fiat line should get some factories back up to production. Though part of the equation depends on Americans learning from changing world circumstances and refusing to dash back to gas guzzlers every time the price of gasoline drops 5¢ a gallon.

I’ve said it enough times. An old geezer like me really doesn’t need to buy another car unless I figure on living to 100. Though I could be tempted by a Dakota pickup with the 3-litre Cummins turbo-diesel – or smaller.

Luca di Montezemolo with some other car company in the gruppo Fiat
Daylife/AP Photo used by permission

Italian carmaker Fiat has confirmed for the first time that it is interested in a takeover of Opel – the German business of General Motors.

Fiat chairman Luca Cordero di Montezemolo said Opel would be an “ideal partner” and that a takeover was an “extraordinary opportunity“.

Har! Does he sound hungry enough?

Opel has said it needs 3.3bn euros (£2.9bn; $4.3bn) to get through the economic crisis, but the German government has encouraged it to find an investor. It has said it does not intend offering Opel a bailout, but that it would offer investors state support…

Group CEO Sergio Marchionne will meet the German economy and foreign ministers on Monday to assess the viability of a deal, Fiat said.

However Canadian car parts maker Magna International has also put forward what the German government has called a “rough concept for a commitment with Opel”.

German Economy Minister Karl-Theodor zu Guttenberg said that any investor would have to present a plan that kept Opel plants open in order to secure government support.

Opel has been under the thumb of GM for so many decades, I’m not confident they could be moved to offering an attractive line of cars with adequate quality.

UPDATE: According to the BBC, this morning, looks like Fiat might also be interesting in picking up the other GM bookend in Europe – Vauxhall. Does anyone in England still buy Vauxhalls?

Still my favorite Chrysler product

Q. Will Chrysler cease to operate?

A. No. Chrysler is reorganizing under Chapter 11 of the United States Bankruptcy Code. The law allows companies to shed assets, restructure debt, cancel contracts and close operations that normally would have to continue running. Once they secure financing to leave bankruptcy, these companies are reconstituted as new legal entities…

Q. How long will this take?

A. The Obama administration spoke of a “surgical bankruptcy” which it said could be completed in 30 to 60 days. It plans to use Section 363 of the bankruptcy code to sell assets, rid the company of liabilities and restructure its debt, creating a new Chrysler…

Q. What happens to Chrysler dealers?

A. Chrysler Financial will cease making loans for Chrysler vehicles; GMAC, with support from the government, will provide financing for Chrysler dealers.

Q. What happens to Chrysler employees?

A. The White House said it did not expect any reductions in white- or blue-collar jobs as a result of the bankruptcy. However, Chrysler employees who are not union members do not have any job security.

RTFA for details – though it’s just a starter. Chrysler-Fiat merger is on. That bodes well for Chrysler dealers who will begin to pick up salable, economical small cars.

Cripes – I would even consider adding a Fiat 500 to the family fleet though I’m still holding out for a Dakota Pickup with the Sprinter turbo-diesel.

Since the announcement of the Chrysler-Fiat partnership last week, speculation has swirled about what models would come out of the American-Italian venture. Automotive News got the skinny on what’s on the way, and according to their unnamed sources, we can expect seven new vehicles in North America – four under the Chrysler brands and three as Alfa Romeos or Fiats.

The plan covers vehicles on four platforms, spanning from a micro-car to a mid-size sedan, with plants in North America being tasked with building most of the new models. Chrysler’s Toluca, Mexico plant, which current builds the Dodge Journey and not-long-for-this-world PT Cruiser, will begin producing the Fiat 500 under the alliance.

What’s on the way?

The agreement involves two new minicars (A-segment) that share the same platform. The first is the aforementioned Fiat 500 and the second, a five-door hatchback based on the Fiat Panda, will likely be badged as a Chrysler or Dodge…

Moving up to the B segment, Chrysler could get the next generation Fiat Grande Punto, Alfa could begin selling the MiTo and the same platform could be used to create a small crossover for Chrysler.

On the mid-size front, Chrysler – which is in desperate need of both C- and D-segment models to replace the Caliber/Compass and Sebring/Avenger, respectively – could utilize Fiat’s new C-Evo architecture to create a new sedan and a more respectable compact car.

And what’s Fiat get out of all this? An inexpensive entry into the North American market, manufacturing capacity and a sizeable distribution network. And if you think Chrysler is getting all the goods, Fiat plans to distribute the Dodge Journey and Dakota pickup in South America, and will be able to utilize Chrysler’s new Phoenix V6 in its own line of products. Not quite balanced, but hardly a bad deal.

Probably no need to even note this in the United States; but, NO mention of diesel power. Which predominates? Ignorance or stupidity?

I know we need a campaign to remove the unbalanced excise tax system which leaves consumers with diesel costing more than gasoline. I know we need a campaign to overcome consumers’ pictures of leaking, smelly cars – courtesy of GM. But, having more power and better economy is sufficient motivation for me to make the switch.

Daylife/Getty Images

Italian carmaker Fiat and US giant Chrysler have agreed to create a global strategic alliance. Under the terms of the deal, Fiat will get a 35% stake in Chrysler. In return, the US firm will get access to Fiat’s fuel-efficient vehicle technologies.

The United Auto Workers union (UAW) welcomed the deal, saying it could help preserve US manufacturing jobs.

The statement points out, however, that the agreement does not commit Fiat to funding Chrysler in future.

Chrysler has received an emergency loan from the US government worth $4bn, while Fiat has said it needed a partner because it was too small to continue on its own. Fiat chief executive Sergio Marchionne said the deal represented “a key milestone in the rapidly changing landscape of the automotive sector”.

Trading in Fiat shares had earlier been suspended amid speculation of a possible partnership with the US firm. After the announcement was made and trading resumed, Fiat shares rose 3.5%.

Now, bring over the new Fiat 500 with the 1.3 liter turbodiesel. Yes!