ANSA.it – News in English – White House cautious on car deal

White House cautious on car dealProgress made but obstacles remain to Fiat- Chrysler alliance(ANSA) – New York, April 29 – It is still not for certain that Italy’s Fiat and Detroit’s No.3 Chrysler will be able to strike a partnership by the May 1 deadline set by US President Barack Obama, the White House said on Wednesday.”I don’t know if there will be a deal. We believe important progress has been made in the past few days, but obstacles remain,” White House spokesman Robert Gibbs said during a press briefing aboard Air Force One.If the two carmakers do strike a deal by Thursday, many believe that Obama himself will announce it.Earlier in the day Chrysler CEO Robert Nardelli told the CNBC cable TV channel that significant progress has been made towards an alliance with Fiat.Nardelli said that the US Treasury had confirmed that Chrysler’s main lenders had agreed to slash the debt owed to them and accept stock in the Detroit carmaker.According to Nardelli, a partnership between the two automakers ”will produce many strategic advantages” for all parties involved. According to insiders, Chrysler’s leading creditors – which include JPMorgan Chase, Goldman Sachs, Morgan Stanley and Citigroup – agreed to reduce debt from $6.9 billion to $2 billion. The concession by the lenders in theory opened the way for Chrysler and Fiat to finalise their partnership but an accord still has to be reached with the remaining credit holders.There is also the problem of cash-strapped Chrysler Financial, the independent financing arm for dealers and buyers which is part-owned by Chrysler’s current owners, the American equity group Cerberus Capital management. Earlier this week a major stumbling block was overcome when unions agreed to accept a majority stake in Chrysler in exchange for debt owed to them and their pension fund. A future scenario for Chrysler sees unions with 55% and Fiat with 35%, while banks and the government will hold the last 10%. Fiat will offer its green technology and small-car platforms, valued at up to $10 billion, for its stake in Chrysler and virtual management control of the joint company. The partnership will give Fiat access to production plants and a sales and service network in the US which are necessary to return Alfa Romeo and introduce the new Fiat 500 city car to the American market.Chrysler, in turn will have access to Fiat’s networks in Europe and Latin America.

ANSA.it – News in English – White House cautious on car deal

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