Fiat-Chrysler Alliance Near Death

The trans-Atlantic love story between Chrysler and Fiat may come to an end even before it really began. As in all such stories, at fault is neither of the two sides, but a third interested party which we shall call "the dreaded workers unions", Autonews reported.

According to Fiat CEO Sergio Marchionne, Fiat may back down on its plans of a venture with the American manufacturer if a deal is not reached with the company's unions by the end of the month. "Absolutely we are prepared to walk. We cannot commit to this organization unless we see light at the end of the tunnel," the Italian CEO told Canadian newspaper Globe and Mail.

Marchionne says that at this point, the alliance has about a fifty-fifty chance of taking shape. The reason behind the dimming light at the end of Chrysler's tunnel is the lack of progress on labor negotiations.

“From what I can tell from a distance, the Canadian Auto Workers may have taken more rigid positions," Marchionne added. "The dialogue is out of sync. I think they need to see what state the industry is in. Canada and the U.S. are coming in as the lender of last resort."

Even if the odds seem against the alliance, the two companies still work together into developing a new management structure. Confirming our previous reports, Sergio Marchionne said that it is likely, in case the venture takes shape, he will take the CEO position at Chrysler.

"Fundamentally, that's possible, but the title isn't important," he said. "What's important is that they hear me. It's possible that I will have to divide my time between running Fiat and running Chrysler".