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Driving the Fiat 500 Abarth Automatic

With lightning fast shifts, the Fiat 500 Abarth automatic is not your typical slushbox automatic

Fiat 500X All- Wheel-Drive System Explored

The Fiat 500X has an advanced All-Wheel-Drive system. See how it outperforms the competition.

Driving the New Fiat 124 Spider and Abarth!

A look at how the new Fiat 124 Spider stacks up against the original

Fiat 500L Design

Within its compact dimensions, the Fiat 500L has the room of a full-sized car. See how Fiat did it and the concept and goals of the design team

Alfa Romeo Giulia Quadrifoglio Debut

Watch the Alfa Romeo Giulia Quadrifoglio Debut Video at the LA Autoshow

Fiat 500 Abarth Oil Change

Everything you need to know about changing the oil on a Fiat 500 Abarth and 500 Turbo

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Wednesday, April 22, 2009

Chrysler creditors to Fiat: Put in $1 Billion in cash...

Here's the latest on the proposed alliance between Fiat and Chrysler gathered from the Internet.

Chrysler owes creditors $6.9 billion with loans secured by Chrysler assets (factories and technology). Last week they rejected an offer from the Obama administration's Auto Task Force for 15 cents on the dollar. A new counter proposal came out Monday that's reportably drawing criticism from the Obama Administration.

The new proposal has creditors seeking a 40% stake in the Fiat-Chrysler partnership, a seat on the company's board of directors and demands Fiat put $1 billion cash into Chrysler. This will be in exchange for writing off about a third ($2.4 billion) of the $6.9 billion in loans.
The original Fiat -Chrysler partnership proposal, announced in January, would have Fiat sharing award winning, cutting edge vehicle and technology (valued by Chrysler to be worth $8 to $10 billion) but not putting any cash into the ailing American car company. This would be in exchange for an initial 20% stake in Chrysler and getting Fiat autos back into the USA.

According to the new counter proposal, if Fiat doesn't inject $1 billion in cash into the deal "there is the prospect of a wealth transfer from the U.S. taxpayer to a foreign company of potentially $10 billion or more."

However, Sergio Marchionne has stated on March 5 to the Treasury Department that
bailout money would be spent entirely on Chrysler and none of it would find it's way to Fiat. He also said all loans would be paid back. "Nothing is going to be taken out of the US and the main objective is going to be to repay every single dollar of taxpayer funding before anybody gets anything".

As for Fiat putting $1 billion in cash into Chrysler, that awaits to be seen. But it seams unlikely.

Marchionne has been quoted last week concerning talks with the union " The minute you talk to me about historical entitlement in an organization that is technically bankrupt, it's a nonsensical discussion. There is no wealth to be distributed." " I think they need to see what state the industry is in. Canada and the US are coming in as the lender of last resort. No one else wants to put a dollar in. This is the worst condemnation to the viability of this business."

A White House official has been quoted anonymously on the Internet stating "It is neither in the interest of Chrysler's senior lenders nor the country for them to advance a proposal that would yield them an unjustified return as Chrysler, its employees, other stakeholders are working tirelessly to help this company restructure."

In addition, the creditors want to have the remaining $4.5 billion in debt given a higher priority for repayment than the $4 billion U.S. taxpayers have already loaned Chrysler and have claim to the additional $6 billion loan that the government could release after May 1.

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