In other words, Fiat wants to be sure that making use of Chrysler's production facilities does not expose it to environmental or safety liabilities, the aforementioned source wrote. In case the alliance goes through, Fiat would receive a 35 percent stake in Chrysler and will use the US production facilities to expand its coverage into the United States and relaunch a number of models into this particular market.
On the other hand, Chrysler would benefit from Fiat's low fuel consumption models and would be capable of refreshing its product lineup to better cope with the economic downturn and with government requirements.
However, representatives of Environ refused to comment the report while Chrysler spokesman Max Gates only said that the two automakers are still in early discussion stages. "Chrysler and Fiat are in the due diligence phase of our strategic-alliance discussions,'' he said.
Chrysler is currently facing a deadline of March 31 when government representatives will decide whether to provide more funding to the American company. Chrysler early this year demanded an additional $5 billion in federal aid to continue its operations across the United States and continue the restructuring process. The company earlier this year received a $4 billion loan from the United States but it repeatedly warned that it may run out of cash by March 31 unless additional funds are provided.
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