Fiat: Not Taking Chrysler Debt, But Will Take Some SUVs And Minivans

Before the US Treasury has even approved the proposed alliance between Chrysler and Fiat – in which the Italian carmaker would take a 35 percent stake in the troubled American company – the first tiff has broken out between the two manufacturers.

Last week, Chrysler went on record saying that Fiat, in taking a 35 percent share, would also assume 35 percent of the company’s sizable debt, amounting to about US$3.15 billion (AU$4.5b).

Not long after, bigwigs at Fiat said “sorry, what?”

Fiat, which is already talking to the Italian government about securing aid to keep 60,000 workers in jobs, said that it has no plans to take on any of Chrysler’s debt to the US government.

Fiat announced that it intends to “make absolutely clear that the proposed alliance will not entail the assumption of any current or future indebtedness to Chrysler.”

Chrysler has yet to publicly respond to Fiat’s own response.

While Fiat has no interest in seeing itself lumbered with any portion of Chrysler’s astronomical debt, it is at least interested in the US automaker’s SUV and minivan range.

As with many other manufacturers who’ve all no doubt looked at the bank balance and tried to find a way, Fiat has a particular interest in getting its hands on the JEEP brand.

With the rapidly developing Russian and Indian markets not so far away, the JEEP lineup would be of massive value to the Italian carmaker’s efforts to build a strong foothold in those dirt-road-dominated regions.

On the minivan front, Fiat currently offers only one such product in Europe: the Ulysse, which shares its platform with the Peugeot 807 and Citroen’s C8.

An alliance with Chrysler would cut out the need to look to PSA Peugeot Citroen for a minivan/MPV platform, as this is a focus area for the American carmaker.