Fiat, Gucci Collaborate on Special Edition of Fiat 500

Iconic Italian brands Fiat and Gucci have collaborated on a special edition of the Fiat 500, dubbed 500 by Gucci. Available in black or white, the vehicle sports distinctive Gucci style features including the interlocking GG logo and signature stripes.Fiat, Gucci Collaborate on Special Edition of Fiat 500

Top Gear Fiat 500 Abarth SS

Chrysler Fiat Production Of The 500 At Warren Truck or Belvidere?

Chrysler Fiat is not giving up any information after Channel 4 Detroit announced that Fiat was considering building the Fiat 500 at the Warren Truck Assembly Plant. Which WTAP currently makes the Dodge Ram/Dakota and was slated to build the Rambox option that came from St. Louis. If Chrysler is to launch the 500 by 2011 they must make a decision soon.
The Belvidere Plant builds the Dodge Caliber which is still going to build the 2010 model.
There are a few good questions,which plant will lose their current production model? will Fiat build a new plant? or will production go to Mexico?


Channel 4 Fiat 500 Report--Video

Chrysler sale to Fiat appealed To The Supreme Court

Indiana pension funds group asks Supreme Court to block deal

David Shepardson / Detroit News Washington Bureau

Washington -- Lawyers for a group of Indiana pension funds have filed a long-shot emergency appeal with the U.S. Supreme Court seeking to block a deal that would allow Chrysler LLC's emergence from bankruptcy, which could come as early as today.

The appeal came a day after a three-judge panel of the U.S. Court of Appeals in New York approved the sale of Chrysler's "good" assets from bankruptcy to form a new company, Chrysler Group LLC. That firm will be majority owned by a United Auto Workers' health care trust fund. Fiat SpA, which will own 20 percent, will be able to acquire another 15 percent of Chrysler by meeting three benchmarks and will not have to put up any money for its stake. Fiat's CEO Sergio Marchionne will be CEO of Chrysler as well.

In a 39-page appeal filed before midnight Saturday, lawyers for the pension funds wrote: "The negative economic consequences of permitting an unlawful sale to proceed may well over time dramatically outweigh Chrysler's short-term harm. The public is watching and needs to see that, particularly when the system is under stress, the rule of law will be honored and an independent judiciary will properly scrutinize the actions of the massively powerful executive branch."

The petition was referred to Justice Ruth Bader Ginsburg, who handles emergency appeals for the 2nd Circuit. She can rule on the matter herself or refer it to the entire Supreme Court. Five of the nine justices would need to vote to hear the appeal and extend a stay blocking Chrysler's sale. By late Sunday evening, the court had not yet ruled.

The Indiana funds hold $100 million of Chrysler's $6.9 billion in secured debt. The funds cover about 100,000 workers and retirees in Indiana.

The U.S. Appeals Court on Friday upheld a May 31 bankruptcy court ruling clearing the way for the sale of most of Chrysler's assets to a group including Fiat and the UAW's health care trust fund. The UAW fund will hold a 55 percent stake, while the U.S. and Canadian governments will hold 10 percent. Fiat has the right to withdraw from the deal if Chrysler hasn't exited bankruptcy by June 15.

The appeals court gave creditors until 4 p.m. today to convince the Supreme Court to hear the case. If not, Chrysler could close on its sale soon afterward.

Much of the Indiana pension funds' arguments against the sale rely on internal e-mails between Chrysler and members of the Obama auto task force, which showed the overarching role of the government in pushing Chrysler into bankruptcy and directing the carmaker's actions ahead of the filing.

Legal experts said the creditors have a high hurdle to vault, since the High Court accepts just a fraction of the cases it receives -- and even fewer emergency cases for review.

But the case would represent the first time the court could rule on the legality of the $700 billion Troubled Asset Relief Program, the Wall Street bailout fund that Congress approved last fall. The creditors have challenged the use of the funds for automakers.

The Treasury Department agreed to pay off secured creditors of Chrysler with $2 billion in cash for $6.9 billion in debt -- or about 29 cents on the dollar.

The Indiana funds purchased the debt at an average price of 43 cents on the dollar -- meaning they would lose roughly $13 million on their $42 million investment.

Chrysler expected to sell assets to Fiat

NEW YORK – Chrysler LLC is expected to file a motion Saturday to sell substantially all of its assets to Italian automaker Fiat Group SpA, but the ailing automaker must still deal with creditors who refused to come to a deal to erase the company's debt.

Attorneys for Chrysler say eight plants will not be affected by the sale, including five that the automaker revealed it will shutter by the end of next year.

While Chrysler faced its first hearing Friday in Manhattan bankruptcy court, court documents showed the Big Three automaker planned to close plants in Michigan, Missouri, Ohio and Wisconsin that employ about 4,800 people. Chrysler said they will be offered jobs at other plants.

The company also announced President and Vice Chairman Tom LaSorda is retiring effective immediately.

Judge Arthur Gonzalez approved a series of motions at Friday's hearing, launching a chain of events designed to ensure Chrysler's bankruptcy process is the quick and "surgical" one the company and the U.S. government have promised.

But what could prove to be the case's biggest challenge still lies ahead. Chrysler must eventually deal with creditors who defied government pressure to wipe out the automaker's debt and might have helped the company avoid a bankruptcy filing in the first place.

Another hearing was scheduled for Monday, where Chrysler attorneys will ask Gonzalez to let the company start using $4.5 billion in loans from the U.S. and Canadian governments to keep operating under bankruptcy protection.

Chrysler, the nation's third-largest car manufacturer, filed for bankruptcy protection Thursday. The company plans to emerge in as little as 30 days as a leaner, more nimble company, with Fiat potentially becoming the majority owner.

In return, the federal government agreed to give Chrysler up to $8 billion in additional financing, on top of the $4 billion the company already has received.

Chrysler attorney Corinne Ball said that lawyers on Monday would ask to set a date for the first hearing on the sale of its assets to the "new Chrysler." In bankruptcy, assets are sold in a two-part process during which the court asks for competing bids. None are expected in Chrysler's case, since documents show the company already tried to form alliances with dozens of companies, including Nissan-Renault, Toyota, Honda, Volkswagen and even rival General Motors Corp.

Heidi Sorvino, bankruptcy partner at Smith, Gambrell & Russell LLP, said a sale could be completed in 30 to 60 days.

"I think the sale will happen quickly," she said. "The actual proceeding is going to take a long time."

Until the deal with Fiat closes, the automaker plans to idle all of its plants in the U.S. Chrysler's Canadian assembly plants also halted production Friday because of parts shortages stemming from the U.S. shutdown.

In court documents, Chrysler said it won't keep its Sterling Heights, Mich., plant that makes Chrysler Sebrings and Dodge Avengers, and the Conner Avenue plant in Detroit that makes Dodge Vipers. The St. Louis North plant that makes Dodge Ram pickups would also close.

Chrysler's Twinsburg, Ohio, parts stamping plant and Kenosha, Wis., engine plant will also be shuttered.

Two other plants that will be left out of the Fiat sale are the St. Louis South plant and an assembly plant in Newark, Del., that were idled last year. Another facility, Chrysler's Detroit Axle plant, is already scheduled to be replaced by a new factory near Port Huron, Mich.

The "new Chrysler" would lease the eight plants, then shutter them by December 2010.

"While some facilities may close, substantially all Chrysler employees will be offered employment with the new company," Chrysler spokeswoman Dianna Gutierrez said. "Employees currently located at a facility identified for disposition will be offered a position at one of the facilities sold to the new company."

Gonzalez approved Chrysler's motion to allow the automaker to pay $48.8 million in employee and contract worker pre-bankruptcy wages, benefits and businesses expenses. The motion also references an estimated $86 million in employee vacation benefits that it may not ultimately have to pay.

The judge also approved Chrysler's motions that will let it continue to honor its warranties and continue its current banking practices.

It's uncertain when Gonzalez will face objections from the creditors that hold $6.9 billion of the automaker's debt.

Four banks holding 70 percent of the debt agreed to a deal that would give the lenders 29 cents on the dollar. But a collection of hedge funds refused to budge, saying the deal was unfair because they deserve to recover more than other creditors like the United Auto Workers.

President Barack Obama on Thursday chastised the funds for seeking an "unjustified taxpayer-funded bailout" after Chrysler and his auto task force cleared the company's other hurdles, including the Fiat deal and a cost-cutting pact that the UAW ratified this week.

Chrysler's bankruptcy filing is the latest step in a drastic reordering of the American auto industry, which has been crushed by higher fuel prices, the recession and customer tastes that are moving away from the gas-guzzling SUVs that were once big money makers.

The government already has sunk about $25 billion in aid into Chrysler and GM.

GM faces its own day of reckoning on June 1, a date the administration has set for it to come up with its own restructuring plan. GM has announced thousands of job cuts, plans to idle factories for weeks this summer and has even offered the federal government a majority stake in the company as it races to meet the deadline.

Like at Chrysler, debt may be the stumbling block. GM has asked its unsecured bondholders to exchange $27 billion of debt for a 10 percent stake in the automaker. The creditors balked, saying that would leave them with just pennies on the dollar and that they deserve a majority stake if they give up their claims.

Chrysler, Fiat Make Progress

Italian carmaker Fiat took a step closer to clinching a crucial deal with Chrysler after the U.S. carmaker's unions gave their strongest signal yet that they were willing to ratify a tentative deal and Chrysler's chief executive expressed his commitment to qualify for U.S. emergency loans.

Chrysler, which has 8,000 unionized workers in Canada, is under immense pressure to secure a partnership with Fiat after the Obama administration threatened to suspend federal aid for Chrysler unless it secured a deal with the Italian carmaker.

In a first significant step toward meeting the deadline, Chrysler's Canadian and U.S. unions signalled that they were willing to pave the way to an agreement. On Sunday, the Canadian Auto Workers union ratified a new collective agreement with Chrysler to allow layoffs and pay cuts by about C$19 ($15.61) an hour, that would save the automaker about $198.0 million annually, the union said. It also includes the elimination of a third shift at a plant in Ontario, Canada.

Separately, the United Auto Workers union announced that it had also reached a tentative agreement with Chrysler, Fiat and the U.S. government on further concessions on a contract and a healthcare trust agreed with the automaker in 2007.

But while a thumbs-up from unions makes a deal between Chrysler and Fiat more likely, another obstacle is Chrysler's large debt pile. "The bigger unknown at the moment is the banks," said Massimo Vecchio, an analyst with MedioBanca. Lenders to Chrysler are reportedly owed $7.0 billion, but Fiat and the U.S. government are pushing the lenders to forgive $5.5 billion of the debt in exchange for a 5.0% stake in the company, the analyst said.

"It's difficult to say if at the end they will clinch a deal under the current terms. But Fiat will only take Chrysler if Chrysler's debt is negotiated," the analyst said.

Chrysler also signalled its willingness to avoid having to file for bankruptcy protection. The company's chief executive RobertNardelli said that German automaker Daimler was working with Cerberus Capital Management to divest Daimler's 19.9% stake in the struggling U.S. automaker. The top priority was to preserve Chrysler and the entire leadership team was focused on completing the required deals to qualify for emergency U.S. government loans, Nardelli said in a memo obtained by Reuters.

Last week, Sergio Marchionne, Fiat's outspoken chief executive, said that he was confident his company could reach a deal with near-bankrupt Chrysler. "In light of what I know today, I see no reason why it won't happen," Marchionne told reporters in Milan. (See "Can Sergio Marchionne Save Chrysler?")

Still, Fiat could even explore a potential partnership even if Chrysler files for Chapter 11 bankruptcy protection from creditors, a source close to the Italian carmaker told the Associated Press. Chrysler and the U.S. Treasury Department were preparing paperwork for bankruptcy filings, one as a reorganization in Chapter 11 with government funding and the other as a liquidation if no government money is available, sources in the United States have said, the AP reported.

But on Monday Chrysler said it was working "diligently to finalize our alliance with Fiat and restructure our business by the government's April 30 deadline".

Fiat would own biggest slice of Chrysler under latest scenario proposed by U.S.

Instead of Cerberus Capital Management and Daimler AG holding 80.1% and 19.9%, respectively, of Chrysler LLC, there will be a larger cast.

Under the latest scenario proposed by the U.S. government, Fiat SpA will have the largest block of Chrysler, at 20%. The remaining 80% will be allocated among a variety of secured creditors that include at least five banks and U.S. taxpayers.

Cerberus and Daimler likely will hold much smaller stakes because they still hold loans that helped finance the August 2007 acquisition of the Auburn Hills-based automaker.

Even the UAW could end up owning a piece of the company.

"They are trying to trade debt for equity among the current creditors," said Tom Stallkamp, a former DaimlerChrysler vice chairman and president. He is now a partner in Ripplewood Holdings LLC, a private equity fund. "It's all based on how much of a haircut the debt holders will accept."

Coincidentally, those debt holders include some of the giant banks -- J.P. Morgan Chase, Citicorp, Morgan Stanley and Goldman Sachs -- that auto industry advocates argue have benefitted from a double standard in how they accounted for government loans.

Debt-for-equity talks
There are three levels of Chrysler debt secured by such assets as manufacturing plants, equipment, vehicles, parts and real estate. The first level, valued by Chrysler at $6.9 billion, was borrowed from the banks. The second is $2 billion borrowed from Daimler ($1.5 billion) and Cerberus ($500 million). The third is the $4.3 billion in government loans committed in December and January.

If Chrysler were to file for bankruptcy, the banks would be first in line to sell assets, followed by Cerberus and Daimler, and finally the federal government.

"This is the worst possible time to be selling an auto plant," said Shelly Lombard, a credit analyst with Gimme Credit in New York.

Chrysler, Fiat and President Barack Obama's auto task force are working hard to avoid that outcome. To succeed, they must secure breakthrough agreements with the banks and the UAW. Then, the task force has said it would release up to $6 billion more to fund Chrysler's operations.


Unlike GM, which is dealing primarily with bondholders, Chrysler's debt is owed to banks and the government. Some of the bank loans have been sold to hedge funds and other investors. "It's hard to know who bought what, even with bonds, and it's harder still with bank loans," Lombard said.


One of the banks likely will act as an agent for the hedge funds. Then, the task force leaders, Steven Rattner and Ron Bloom, will negotiate for a settlement that offers the banks a fraction of the loans' face value in exchange for shares in the new Chrysler.

Challenges ahead
Fiat so far has not offered cash and has said it will not assume any current debt to partner with Chrysler. While Chrysler has valued Fiat's vehicles and powertrain technology at $8 billion to $10 billion, that won't likely satisfy the banks.

"Fiat is in many ways a reasonable long-term solution," said Craig Fitzgerald of Plante & Moran. "The big question is will $6 billion more from taxpayers be enough to fund Chrysler's turnaround."

The challenge with the UAW is to find a non-cash method to cover half of $10.6 billion Chrysler owes in 2010 to the Voluntary Employee Beneficiary Association, or VEBA, trust fund. The trust was created to cover health care insurance for UAW retirees.

If Fiat doesn't offer cash or its own stock, Chrysler may offer the union stock in the new company. Such a deal would save $5.3 billion, which could be enough to satisfy Obama's demand for more concessions, and bring the UAW into partnership with banks, taxpayers, Cerberus and Fiat.....More

Chrysler and Fiat must merge or Liquidate

From The Ap
Chrysler and Fiat must merge to get more help for the Auto Task Force

Frustrated administration officials, speaking on condition of anonymity ahead of Obama's announcement, said Chrysler has been given a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA. The government will offer up to $6 billion to the companies if they can negotiate a deal before time runs out. If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leaving Chrysler destined for a complete sell-off....More

Chrysler and Fiat Must Merge To Get More Help

David Shepardson / Detroit News Washington Bureau

Washington -- The Obama administration will take a much more hands-on role in the restructuring of General Motors Corp. and Chrysler LLC, providing both with short-term aid but insisting on and overseeing immediate dramatic changes.

The administration has set strict timetables for GM and Chrysler to complete restructuring and if required changes are not made is likely to force the automakers into bankruptcy in the coming months.

The companies are likely to go even further in cutting staff and closing plants in order to prove their viability.

The administration's auto task force agreed to provide Chrysler with short-term aid for the next 30 days as the automaker works to complete a tie-up with Itay's Fiat SpA and said it would consider loaning the partnership up to $6 billion if a deal can be finalized.

But it warned that if Chrysler and Fiat cannot come to terms on a partnership, the Auburn Hills automaker would not get any more taxpayer money -- a move that would likely force the company's liquidation....more

Obama auto task force to come to Detroit next week

WASHINGTON -- Leaders of President Barack Obama’s auto task force will travel to Detroit next week to meet with industry and labor officials worried about an imminent collapse of several companies absent federal aid.

An administration official said final details of the trip were still being worked out, but the task force visitors will include advisers Steven Rattner and Ron Bloom.


The task force has been conducting a string of meetings over the past two weeks to gather information and assess the depth of the problems facing the industry. General Motors Corp. and Chrysler LLC have said they need a total of $7 billion before the end of the month to avoid bankruptcy, and several suppliers are also on the brink.


Fiat Chief Executive Sergio Marchionne met with Rattner, Bloom and other members of the task force for two and a half hours today to discuss Fiat’s proposed alliance with Chrysler. Fiat has said it would take a 35% stake in Chrysler in return for sharing vehicle designs that could be used for several new Chrysler models.

Chrysler Fiat Merger: Fiat races to review Chrysler operations

February 3, 2009 11:00 CET
(Reuters) -- Italian carmaker Fiat is racing to review the operations of Chrysler LLC before Chrysler must meet a U.S. government deadline in two weeks, Fiat CEO Sergio Marchionne told the Wall Street Journal.

Under the terms of the $4 billion in federal loans Chrysler has received, it must present a plan by Feb. 17 showing how it intends to be viable.

Fiat plans to take a 35 percent stake in Chrysler in a deal that will give the Italian carmaker the scale it needs to survive, while Chrysler can expand its product portfolio to include small, less-polluting cars.

Marchionne said Fiat is still analyzing Chrysler's vehicle production operations and then will turn to studying its finances, the newspaper said.

Marchionne reiterated that Fiat will not put any cash into Chrysler but will provide small cars and fuel-efficient engines that would cost Chrysler $3 billion or more to develop.

Chrysler Fiat News:Fiat CEO says Chrysler concessions needed for deal

Fiat CEO says Chrysler concessions needed for deal

Fiat CEO Sergio Marchionne said he is optimistic that Chrysler can be turned around quickly. But Marchionne stressed that for the Fiat’s relationship with the Auburn Hills automaker to work, all of Chrysler’s stakeholders will have to make concessions....More

Chrysler And Fiat Merger

From Forbes Jerry Flint

The announced deal between Chrysler and Fiat has benefits for both, but it is not a game changer--not yet.

The alignment between Fiat of Italy and Chrysler does not exactly save Chrysler, but it gives Fiat an entry into the U.S. In short, Fiat is to get 35% of Chrysler, will not pay any cash for the stake, and it will give Chrysler access to its technology.

Fiat (nyse: FIA - news - people ) had publicly said it wanted a production base in North America for its Alfa Romeo brand--and presumably the Fiat brand, too. Through its 35% interest that it is getting in Chrysler, it would presumably have access to a U.S. plant to build its cars.

The chief executive of Fiat, Sergio Marchionne, has also worried that his company was not big enough to survive in today's world. Marchionne was born in Italy in 1952 but built his early career in Canada and has dual Canadian and Italian citizenship. Chrysler has some Canadian plants, and the Canadian autoworkers union, separated from the American UAW, has been quite cooperative in working with the industry in recent years.

So at no cash cost, Fiat may have its production base on this continent. What about Chrysler? The company has been weak technically and does not have enough money to finance the kind of new vehicle programs that Chrysler needs to stay competitive in this market.

Fiat is strong in small cars and in their engines and transmissions, as well as in luxury cars and diesel engines. Getting the technology could be a huge help for Chrysler, but the American company will still need the money and ability to create new cars even with Fiat technology.

The alliance might help Chrysler if it needs to get more money from the American government in its battle to survive.

Chrysler's strength has been in sport utility vehicles, pickup trucks and minivans. We do not know Fiat's degree of interest in these businesses. Meanwhile, another foreign maker, Nissan (nasdaq: NSANY - news - people ) (which is part of the Renault/Nissan alliance) has an agreement with Chrysler whereby Nissan is to get a version of the Dodge Ram, a big pickup, and Nissan is to build small cars destined for Chrysler....More

Fiat Nears Stake in Chrysler That Could Lead to Takeover

By STACY MEICHTRY in Rome and JOHN STOLL in Detroit
In an attempt to revive two of the world's storied auto makers, Italy's Fiat SpA and Chrysler LLC are poised to announce a partnership as soon as today in which Fiat could take control of the U.S. company's operations, people familiar with the matter said.

Under terms of a pact that is being hammered out, Fiat is likely to take a 35% stake in Chrysler by the middle of this year. It would have the option of increasing that to as much as 55%, these people said.

Fiat, the stronger of the two, wouldn't immediately put cash into Chrysler. Instead it would obtain its stake mainly in exchange for covering the cost of retooling a Chrysler plant to produce one or more Fiat models to be sold in the U.S., these people said. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars, they said.

The deal is the latest maneuver by Fiat's chief, Sergio Marchionne, who has pulled the Italian company back from the brink collapse since taking over in 2004.

The partnership would provide each company with economies of scale and geographical reach at a time when both are struggling to compete with larger and more global rivals like Toyota Motor Corp., Volkswagen AG and the alliance of Renault SA and Nissan Motor Co.

Chrysler last year sold two million cars and trucks world-wide, with almost all of its sales in North America. Fiat sold 2.5 million vehicles and is heavily dependent on Europe -- particularly its home market in Italy.

While Fiat has a wider global reach than Chrysler, the two auto makers are smaller players compared to their global rivals. Toyota and General Motors, for instance, each have sold more than nine million vehicles annually...More

Chrysler News:Chrysler and Fiat sign merger agreement

Italian carmaker Fiat and US car concern Chrysler have signed an agreement to merge their companies, Chrysler disclosed.

Chrysler, at its Auburn Hills, Michigan headquarters, said that the agreement is still preliminary and not yet binding.

Further details were not immediately disclosed. Earlier on Tuesday, Fiat deputy chairman John Elkann said that the Turin-based carmaker is in talks with Chrysler amid reports of a possible purchase by the Italian company of a majority stake in the ailing US producer.

"It is no secret that we are talking. It has been a while that we are in talks," Elkann, a heir of the Agnelli family which controls Fiat, was quoted as saying by the ANSA news agency.

Elkann indicated more details on a possible deal would be available following a Fiat statement later on Tuesday and a meeting of the company's board scheduled for Thursday.

Earlier on Tuesday, Milan's Bourse announced trading in Fiat stocks had been suspended pending the statement's release.

The Wall Street Journal reported on Monday that Fiat was considering acquiring a 35 per cent ownership in Chrysler by mid-year as the first step towards the acquisition of a possible majority stake in the US company.

The deal would give Fiat long-sought access to the US market for its small and mid-sized cars, with the Fiat 500 and Alfa Romeo reported to be at the top of the list.

Under the deal, Fiat could build its own small cars in the US and use the Chrysler distribution network. In exchange, Chrysler would tap Fiat's expertise building small and medium-sized cars to advance its own plans for new, front-wheel-drive models with lower emissions.

As petrol prices soared and the economy stalled, sales of Chrysler's mostly large, fuel-inefficient cars and trucks fell 30 per cent in 2008.

With auto sales at a 27-year low, Chrysler has laid off tens of thousands of workers and had to beg for government rescue financing of $US5.5 billion ($A8.21 billion) just to stay afloat for the next few months.

The loan terms require Chrysler to deliver a credible survival strategy by March, and an alliance with Fiat would be a tangible new strategy.

Fiat, which exclusively makes small cars with narrow profit margins, is struggling to keep its own head above water in Europe's expensive labour market.