Chrysler seals deal with Italian automaker Fiat

DETROIT -- Chrysler announced Tuesday that it's entering a global strategic alliance with Italian automaker Fiat, giving Fiat 35% of Chrysler in exchange for access to Fiat's fuel-efficient car platforms and other assets.

The deal would give both automakers the ability to compete around the world, with economies of scale and global dealer networks. Fiat will offer Chrysler product and platform sharing, including compact cars and even smaller city cars, fuel efficient and environmentally friendly powertrain technologies, and access to markets outside the U.S. That's all Fiat is offering at the moment; it is not committing to make a cash infusion to Chrysler or funding Chrysler in the future.

Chrysler CEO Bob Nardelli has said he's been open to strategic partnerships for Chrysler, which recently received $4 billion in government loans for the automaker and $1.5 billion in loans for its finance arm. Nardelli says he expects more government help after March 31, and the press release notes that the Fiat deal complies with the terms of Chrysler's loan from the U.S. Treasury.

In an interview with journalists last week, Nardelli said he thought partnerships were key to all automakers' survival. He admired the partnership between Nissan and Renault, which gives a Japanese automaker and a French automaker cost efficiencies.

"It's crazy that three companies in one town can't do what two companies in different countries can do," he told reporters at the North American International Auto Show last week. "It's crazy that the U.S. automakers can't get together and be more of a force."

The partnership with Fiat, Nardelli said in Tuesday's release, "creates the potential for a powerful, new global competitor."

"This transaction will enable Chrysler to offer a broader competitive line-up of vehicles for our dealers and customers that meet emissions and fuel efficiency standards, while adhering to conditions of the government loan," he said. "The partnership would also provide a return on investment for the American taxpayer by securing the long-term viability of Chrysler brands in the marketplace, sustaining future product and technology development for our country and building renewed consumer confidence, while preserving American jobs."