Chrysler-Fiat Merger A Done Deal Say Insiders
Posted April 29, 2009 12:00 pm.
This article is more than 5 years old.
By Thursday, the world will have a major new automobile company, one that combines the resources of Fiat with the might of giant Chrysler, a diminished member of the so-called Big 3.
The partnership means the beleaguered company won’t have to file for bankruptcy protection, the final piece of the puzzle in its massive restructuring that has included concessions from unions and billions of dollars in bailout money from both the U.S. and Canadian governments.
The deadline for the partnership is Thursday and a source close to the talks confirmed an agreement has been reached.
But some experts are still wondering if the soon-to-be-done deal will be enough. A group of hedge funds that holds 30 per cent of the company’s debt will still have to agree to forgive what they’re owed.
If not, Chapter 11 could yet be in the future.
In either case, Fiat would remain a partner and the government would still finance the recovery. So far, the U.S. feds have doled out some $4 billion in aid to the cash strapped car company and it’s unlikely Chrysler could survive without it.
Members of the Canadian Auto Workers agreed to $240 million in cost cutting moves in a vote ratified on the weekend. Their American counterparts will complete their own vote on their concession package Wednesday night.
Photo credit: AFP/Getty Images
