With just 15 days left before the U.S. government pulls the plug on Chrysler, the only man who appears able to save the struggling automaker is casting doubt on whether a deal can be worked out. Fiat CEO Sergio Marchionne, in an interview published Wednesday, said the Italian automaker will walk away from a nonbinding agreement to take a 20 percent stake in Chrysler and share its small-car technology unless the U.S. automaker’s unions agree to major cost cuts.
A Fiat spokesman confirmed Marchionne’s statements.
Chrysler, which is living on $4 billion in loans from the U.S. government, has to take on a partner and gain concessions from unions and debtholders by April 30, or the Obama administration will stop lending it money. No other suitors have emerged, and it’s likely that no bankruptcy financing will be available, so Chrysler would have little choice but to be auctioned off in pieces.
Marchionne’s comments, made in an interview with the Toronto Globe and Mail, could be designed to pressure unions to give further concessions.
The United Auto Workers union already has agreed to cost reductions, but the Obama administration has said it must agree to further cuts to make Chrysler more competitive with foreign automakers.
The Canadian Auto Workers union reached a deal with General Motors, but Chrysler says the pact doesn’t go far enough, and the company has threatened to pull out of Canada without further cuts from
With just 15 days left before the U.S. government pulls the plug on Chrysler, the only man who appears able to save the struggling automaker is casting doubt on whether a deal can be worked out. Fiat CEO Sergio Marchionne, in an interview published Wednesday, said the Italian automaker will walk away from a nonbinding agreement to take a 20 percent stake in Chrysler and share its small-car technology unless the U.S. automaker’s unions agree to major cost cuts.
A Fiat spokesman confirmed Marchionne’s statements.
Chrysler, which is living on $4 billion in loans from the U.S. government, has to take on a partner and gain concessions from unions and debtholders by April 30, or the Obama administration will stop lending it money. No other suitors have emerged, and it’s likely that no bankruptcy financing will be available, so Chrysler would have little choice but to be auctioned off in pieces.
Marchionne’s comments, made in an interview with the Toronto Globe and Mail, could be designed to pressure unions to give further concessions.
The United Auto Workers union already has agreed to cost reductions, but the Obama administration has said it must agree to further cuts to make Chrysler more competitive with foreign automakers.
The Canadian Auto Workers union reached a deal with General Motors, but Chrysler says the pact doesn’t go far enough, and the company has threatened to pull out of Canada without further cuts from
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