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June 6, 2009

WSJ: U.S. Pushed Fiat Deal on Chrysler

Well, it appears as if the federal government bullied Chrysler into its deal with Fiat. This greatly concerns me especially if Fiat has financial issues that are being ignored by this administration and the bankruptcy courts. Even if they are acquiring Chrysler at a good price, the US automaker has to turn a profit in order for this venture to improve the US auto industry and Fiat's financial position. Remember, Chrysler just went through this ordeal with Diamler. They bought Chrysler for $36 billion in 1998 and sold them to Cerberus for $6 billion, but Diamler's cost associated with the merger equaled close to the sales price. Another mistake like this could sink both companies. But, hey, we are talking about the federal government and they are here to help.

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U.S. Pushed Fiat Deal on Chrysler

Internal Emails Reveal Resentment; Court Upholds Pact

WASHINGTON -- The Obama administration rushed an alliance between Chrysler LLC and Fiat SpA despite Chrysler's worries about Fiat's financial health and its willingness to share technology, according to internal company emails.

The emails show Fiat ignoring requests for documents and trying to change contract terms late in the talks. A Chrysler adviser at one point said the deal risked looking as if the U.S. auto maker and the Treasury Department, which helped broker the pact, were "in bed with a shady partner." In another note, an official referred to the Treasury Department as "God."

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