Lots of kids on the way

First the mar­riage, now the fam­ily, writes KARLA PIN­COTT

Herald Sun - Motoring - - Front Page -

THE last-ditch li­ai­son be­tween cash­strapped Chrysler and Fiat of Italy will spark a new model splurge. The two com­pa­nies are plan­ning a ma­jor push as they look to max­imise a mar­riage that was a ne­ces­sity for Chrysler and a per­fect op­por­tu­nity for Fiat to move into the US.

De­tails of the two com­pa­nies’ tie-up — which fol­lows Chrysler’s di­vorce from Daim­ler of Ger­many— are be­ing fi­nalised, but they are talk­ing about new op­por­tu­ni­ties.

The first is a plan for at least seven new ve­hi­cles to be built at Chrysler’s US fac­to­ries.

Four of the ve­hi­cles will be branded as Chryslers. The other three are ex­pected to be sold as Fi­ats or Alfa Romeos.

Fiat will re­port­edly sup­ply the me­chan­i­cal plat­forms for four of the prod­ucts, but there has been no in­for­ma­tion about their de­sign, ve­hi­cle seg­ments or es­ti­mated launch.

How­ever, in­dus­try in­sid­ers sug­gest the Fiat 500 will be pro­duced at Chrysler’s Toluca fac­tory af­ter the PT Cruiser now built there is phased out late this year.

The Ital­ian com­pany, which has taken a 35 per cent stake in Chrysler, is ex­pected to do­nate other small-car ex­per­tise.

Chrysler Aus­tralia head Gerry Jenk­ins ad­mits he knows lit­tle yet of what is hap­pen­ing at head of­fice.

‘‘All we know is our top ex­ec­u­tives are in talks with Fiat ex­ec­u­tives,’’ Jenk­ins says. ‘‘We are hav­ing cor­re­spon­dence with head of­fice, but there is noth­ing con­crete I can say at this stage.

‘‘But we’re

all very ex­cited. The Fiat agree­ment is a tremendous op­por­tu­nity. It’s a per­fect mar­riage and I think the prospects are ab­so­lutely out­stand­ing.’’

Fiat’s stake in Chrysler does not in­volve money be­ing handed over. The Ital­ian in­volve­ment is be­ing re­paid by more doors be­ing opened to in­ter­na­tional mar­kets and shared tech­nol­ogy.

Chrysler got a $US4 bil­lion bailout in US Gov­ern­ment loans this year, but was still ex­pected to col­lapse without some sort of part­ner­ship or al­liance, which was once ru­moured to be with Gen­eral Motors.

It pulled off the Fiat deal at ex­actly the right time, even though the Ital­ian com­pany is now in trou­ble of its own at home.

The head of Fiat warns that Italy’s au­to­mo­tive in­dus­try could lose 60,000 jobs — about 20 per cent of the work­force — un­less the Gov­ern­ment im­ple­ments a res­cue pack­age sim­i­lar to the one in the US, which has al­ready been copied in Bri­tain.

‘‘If the Gov­ern­ment doesn’t in­ter­vene, the risk that 60,000 work­ers in the au­to­mo­tive sec­tor will have to stay at home is real,’’ Fiat chief ex­ec­u­tive Ser­gio Mar­chionne told Italy’s Ansa news agency.

‘‘We are ex­pect­ing mea­sures for the en­tire au­to­mo­tive sec­tor, which is cur­rently sell­ing 60 per cent less than last year. It’s not a case of help­ing Fiat, but of restart­ing an en­tire pro­duc­tion sec­tor and the whole econ­omy.’’

Fiat has slashed pro­duc­tion and cut its fore­casts be­cause of the global slump, and an­nounced in Jan­uary it would not pay a 2008 div­i­dend to share­hold­ers.

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