Chrysler And Fiat Close To Merging

Thanks to swift action from the Italian automaker Fiat, Chrysler is set to be out of bankruptcy court sooner than expected. After federal bankruptcy court cleared the way for Chrysler to exit bankruptcy, Fiat put forth a proposal to acquire 20 percent of Chrysler’s assets. That figure could go as high as 35 percent if certain goals are met in the future. Sources are tight lipped about when this might take place.

Fiat And Chrysler Merging

The merger hit a snag earlier this week because three Indiana State fund and several consumer groups did not believe that the bankruptcy proceedings were fair to creditors. Justices claim that the burden of proof was not met from the consumer groups. Exiting bankruptcy court, Chrysler will walk away with 6.6 billion dollars in financing to further complete the restructuring. This exit money and the merger with Fiat is good news for Chrysler. If left alone and having to liquidate their assets, the company could not stand by themselves.

The Obama administration is planning a quick exit from bankruptcy court for G.M. as well. This is a part of their plan to revamp the entire domestic auto industry. Along with the extreme makeover, the administration is still putting the final touches on the cash for clunkers program. When this government program comes in place, certain vehicles 15 years or older could be worth as much as 4,500.00 dollars.

Is this the beginning of the end for the auto giants? If it isn’t, it sure is a good start. Too much is at stake in the nation to let this go on for too much longer. At the end of this long tunnel, we will see Chrysler, G.M., and Ford come out leaner, stronger, and mightier than before.