ROME – Fiat Group SpA will be on the path to becoming a global automotive powerhouse if Chief Executive Sergio Marchionne has his way.

Marchionne is set to meet Monday in Berlin with German economic and foreign ministers to discuss Fiat’s offer for General Motors Europe’s German unit, Opel.

Fiat confirmed Sunday that it is in talks to buy most of General Motors Corp.’s European operations. It also said it is evaluating the possible spinoff of its auto business to form the core of a new company.

GM has been trying to find investors for its noncore and unprofitable assets to help stave off collapse. Germany is keen to safeguard the future of Adam Opel GmbH, a core part of GM’s European operations, which employs about 25,000 people at four plants in Germany.

Fiat Group Automobiles includes the Fiat, Alfa Romeo and Ferrari brands. In addition, Fiat is in the process of acquiring U.S. automaker Chrysler LLC without putting up any cash.

Marchionne was quoted in the Financial Times on Monday as saying of his company’s plan: “From an engineering and industrial point of view, this is a marriage made in heaven.”

The new auto company, which according to Fiat would have $105 billion in annual revenue, would put the Italian automaker in markets where it has little or no presence, including North America, traditionally the largest market in the world.

“They’re going to be a global powerhouse, I guess. Who would have thought?” asked Erich Merkle, an independent auto industry analyst in Grand Rapids, Mich. “They seem to be on a buying binge right now, looking for cheap and distressed assets like Chrysler and Opel.”

Fiat is not Opel’s only suitor, however. Last week, Canadian car parts maker Magna International Inc. presented German Economy Minister Karl-Theodor zu Guttenberg with what the minister called a “rough concept for a commitment with Opel.”

The German government has said it doesn’t foresee giving direct state aid but could help an Opel investor with loan guarantees.

The Chrysler deal, which must still be approved by a U.S. bankruptcy court, would be in exchange for giving Chrysler access to Fiat’s small-car and engine technology. Chrysler cars and trucks also would be sold by Fiat through its global distribution network.

The deals would make Fiat a big global player, but that might not be the best thing for the Italian automaker, which might be overreaching with the acquisitions, said Merkle.

“This is a lot to take on, quite honestly,” Merkle said. “When you start looking at Chrysler, it’ll make them a very large automaker, but we’ve seen that large isn’t necessarily indicative of success.”

It will take years, Merkle said, for Fiat to gain any synergies by globalizing design, engineering and manufacturing operations with Chrysler and the GM units.

GM Europe also includes the British company Vauxhall and the Swedish carmaker Saab. Saab may not be included in the deal, however. The company is being reorganized under Swedish law and is likely to be separated from the rest of GM’s European operations.

Saab declined to comment on whether Fiat was one of the roughly 10 bidders who have expressed serious interest in the Swedish brand.

Saab spokeswoman Gunilla Gustavs said the sales process is continuing according to plan and that a deal is expected to be signed before the end of June.

“We are now entering a process where we are narrowing down the number of interested bidders. There are around 10 who are more serious, with whom we have held deeper talks and shared more information,” she said.

GM also makes and sells small Chevrolet-badged cars in Europe that are designed in South Korea by the company’s Daewoo unit, and it’s unlikely to sell that because that would be GM’s only remaining foothold in Europe, Merkle said.

General Motors has been trying to find investors for its noncore and unprofitable assets as part of a restructuring in which it has received $15.4 billion in aid from the U.S. government to avert collapse.

Opel has said it needs $4.3 billion to get through the economic crisis. The German government has said it doesn’t foresee giving direct state aid. Chancellor Angela Merkel has suggested the government could help an Opel investor with loan guarantees.

Fiat said that over the next few weeks, Marchionne will be looking “to assess the viability of a merger of the activities of Fiat Group Automobiles (including the interest in Chrysler) and General Motors Europe into a new company.”

“As part of this process, the group would evaluate several corporate structures, including the potential spinoff of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe.”

Courtesy: Associated Press

DETROIT – Chrysler LLC filed for bankruptcy protection Thursday and will form an alliance with the Italian carmaker Fiat Group SpA in an effort to revive the nation’s ailing third-largest automaker.

The Obama administration said it had long hoped to stave off bankruptcy for the nation’s third largest automaker, but it became clear that a holdout group of creditors wouldn’t budge on proposals to reduce Chrysler’s $6.9 billion in secured debt. Clearing those debts was a needed step for Chrysler to restructure by a government-imposed Thursday deadline.

“No one should be confused about what a bankruptcy process means,” President Barack Obama said in a midday announcement. “This is not a sign of weakness but rather one more step on a clearly chartered path to Chrysler’s revival.”

Chrysler filed for Chapter 11 bankruptcy protection in New York on Thursday with the hopes of emerging in as little as 60 days under the new partnership with Fiat. The government, which has already poured $4 billion in loans into Chrysler, would provide up to $8 billion more to carry the company through bankruptcy, said senior administration officials speaking on condition of anonymity. The government will also help appoint a new board of directors.

The deals give Chrysler “a new lease on life,” Obama said.

“This is not a sign of weakness,” he said. “I have every confidence that Chrysler will emerge from this process stronger and more competitive.”

Under bankruptcy, Chrysler would still sell cars and the government would back its auto warranties. But Chrysler said Thursday that it will idle its plants during the legal proceedings. The company’s chief executive, Robert Nardelli, said he will leave when the bankruptcy is complete.

When that occurs, the Auburn Hills, Mich.-based automaker would end up owned by the United Auto Workers union, the U.S. government and Fiat. The Canadian and Ontario governments, which are also contributing financing, would have small stakes.

But Fiat, which the Obama administration hopes can jump start Chrysler with its fuel-efficient and lower-emission technology, could end up the majority stakeholder. Fiat would initially get 20 percent, a share that could rise to 35 percent if certain benchmarks are met. Fiat said Thursday it could get an additional 16 percent by 2016 if Chrysler’s U.S. government loans are fully repaid.

Obama said Chrysler Financial, the arm of the company that makes loans to buyers and to dealers to finance their inventories, will be merged into GMAC Financial Services, once General Motors Corp.’s finance arm. The new GMAC will get government support. Chrysler’s base of dealers would also be pared down.

The Treasury Department’s auto task force has been racing in the past week to clear the major hurdles that prevented Chrysler from coming up with a viable plan to survive the economic crisis ravaging nation’s automakers.

Along with the Fiat deal, the UAW ratified a cost-cutting pact Wednesday night.

Treasury reached a deal earlier this week with four banks that hold the majority of Chrysler’s debt in return for $2 billion in cash.

But the administration said about 40 hedge funds that hold roughly 30 percent of that debt also needed to sign on for the deal to go through. Those creditors said the proposal was unfair and they were holding out for a better deal.

“I don’t stand with them,” Obama said.

A person briefed on Wednesday night’s events said the Treasury Department and the four banks tried to persuade the hedge funds to take a sweetened deal of $2.25 billion in cash. But in the end, this person said most thought they could recover more if Chrysler went into bankruptcy and some of its assets were sold to satisfy creditors. This person asked not to be identified because details of the negotiations have not been made public.

On Thursday, a group of funds identifying themselves as 20 of Chrysler’s “non-TARP lenders” released a statement saying they had been sidelined during negotiations between lenders and the government. The group, which said it holds $1 billion in Chrysler debt, complained that the four banks were “obviously conflicted” because they had accepted money from the government’s Troubled Asset Relief Program while they had not gotten TARP money.

The group said its offer to the Treasury Department to reduce its claim to 40 percent was “flatly rejected or ignored.”

Fiat is getting its stake in Chrysler for giving the company access to its fuel-efficient technology, a move toward cleaner cars that the Obama administration thinks is critical to Chrysler’s future survival. The company has committed to building Fiat cars in Chrysler factories, to be sold as Chryslers.

    NEW YORK -- At a press conference hosted by the
New York International Auto Show and Mobil 1 at the Jacob Javits Centre in
Manhattan, New York, the Fiat 500 was declared the 2009 World Car Design of
the Year.

    Cars eligible for the 2009 World Car Design of the Year award are taken
from the list of fifty-one (51) World Car candidates nominated by
fifty-nine (59) World Car jurors from twenty-five (25) countries throughout
the world.

    The World Car Design of the Year category, and the corresponding award,
is meant to highlight new vehicles with innovation and style that push
established boundaries.

    A design panel consisting of four highly respected world design experts
asked to first review each candidate, and then establish a short-list of
recommendations for the jurors. The design experts were:

    --  Silvia Baruffaldi: Managing Editor, Auto & Design magazine
    --  Robert Cumberford:  design critic, Automobile and Auto & Design
        magazines
    --  Akira Fujimoto:  Editor-in-Chief, Car Styling magazine.

    --  Tom Matano: Executive Director, School of Industrial Design, Academy of
        Art University, San Francisco, USA
    Jurors then voted on the expert's recommendations and the ballots were
tabulated by the international accounting firm KPMG. The top three design
finalists were, in alphabetical order, the Fiat 500, the Citroen C5 Sedan /
C5 Tourer, and the Jaguar XF.

    This is the second time that a Fiat design has been chosen one of the
top three finalists. The Fiat Grande Punto was the initial top three
finalist for the design title in 2007.

    The World Car jurors observed, "Icon is an overused word in the
automotive world, but the Fiat 500 dating from 1957 genuinely deserves the
sobriquet. Revived by Fiat last year, the new Cinquecento is larger than
its predecessor but still smaller than a Mini. Cheerful and cheeky, it does
a brilliant job of capturing the visual appeal of the original version
while meeting modern design and engineering standards. Design consultant
Robert Cumberford says the new 500 "pushes the emotional hot buttons of
several generations of people who might never have driven one of the early
models, but who admired them on European streets. Built on the Panda
platform, the 500 keeps the original's charm, adding two more seats and all
contemporary safety, anti-pollution and driving aids." In Tom Matano's
opinion the Fiat possesses "heart-warming style. It is genuine,
straightforward, without gimmicks. It is a welcome addition to a car world
full of non-humanistic designs."

    "It is with great pride that we accept an award which sets the seal on
the work done by Fiat to create stunningly good-looking cars that convey
everything that is best in Italian manufacturing," said Roberto Giolito,
Head of Style Fiat. "Italian design has often anticipated the future trends
of motoring and our latest models, as the Fiat 500 shows, stand out for
that 'concrete beauty' that the whole world has come to expect from an
Italian car. We will never cease to work in the direction of design
innovation, creating products of great styling appeal which at the same
time never fail to respect our historical, cultural and industrial
identity."

    Previous winners of the World Car Design of the Year award were the
Audi R8 in 2008, the Audi TT in 2007 and the Citroen C4 in 2006.

    Now in their sixth year, the annual World Car awards have become one of
the world's most prestigious, credible and significant programs of its
kind.

    The awards were inaugurated in 2003, and officially launched in January
2004, to reflect the reality of the global marketplace, as well as to
recognize and reward automotive excellence on an international scale. The
awards are intended to complement, not compete, with existing national and
regional Car of the Year programs.

    The awards are administered by a non-profit association, under the
guidance of a Steering Committee of pre-eminent automotive journalists from
Asia, Europe, and North America. There is no affiliation with, nor are the
awards in any way influenced by any publication, auto show, automaker, or
other commercial enterprise.

WASHINGTON – The chief executive of Fiat Group SpA told the Obama administration Thursday that the Italian automaker could revive Chrysler LLC and help it repay billions in government loans.

Fiat CEO Sergio Marchionne said the administration’s auto task force was receptive to a proposed partnership that would give Fiat a 35 percent stake in the struggling U.S. automaker in exchange for new technology but no cash.

“We can add value,” Marchionne told reporters after the 2 1/2-hour meeting with the auto panel at the Treasury Department. “That’s the real issue and it’s a necessary ingredient of the revival of Chrysler.”

Fiat made its presentation in advance of the panel’s meeting with bondholders of General Motors Corp. later Thursday. GM is holding negotiations with its bondholders to cut two-thirds of its $27 billion in unsecured debt under the terms of a loan agreement with the government.

General Motors and Chrysler have received $17.4 billion in federal loans and requested an additional $21.6 billion last month. The government is trying to revamp the companies by March 31 and has been meeting with stakeholders as it tries to find a way to resurrect the companies.

Chrysler contends the alliance with Fiat would help both auto manufacturers. Fiat could provide Chrysler with a broad array of fuel-efficient small and mid-size cars, something the Auburn Hills, Mich.-based company lacks, and give Chrysler access to foreign markets.

Fiat’s Marchionne has been seeking a U.S. partner to bring Fiat’s successful update of the 500 subcompact and its sporty Alfa Romeo brand to the United States.

Fiat met with Steve Rattner and Ron Bloom, top advisers to Treasury Secretary Timothy Geithner, and other government officials. Marchionne said the panel “wanted to know what the industrial alliance will look like and what it will look like after we’re finished.”

“I think they were intelligently critical of all things that were relevant … and rightly so. They’re looking at taxpayers’ funding,” he said. “They recognize the magnitude of the problem and there is an absolute determination to find a solution.”

Some members of Congress have questioned whether the government should save a company with a significant foreign stake in a major U.S. automaker. Marchionne said “nothing is going to be taken out of the U.S. and the main objective is to repay every single dollar of taxpayer funding before anyone gets anything.”

Since last week’s surprising news of the deal between Fiat and Chrysler, speculation has been brewing on the topic of which models would come to America.
Sources tell Tuned that a total of seven models will be brought over; 4 under the Chrysler badge and another three to be determined between Alfa Romeo and Fiat.
Fiat plans to build their North American lineup in the Toluca, Mexico assembly plant in order to fill in gaps in their vehicle lineup. The way of the future seems to be more compact and fuel friendly cars like the Fiat 500, which could hit shores as early as 2012.
Chrysler also is reported to gain exclusive rights to produce the compact 1.4 liter and 1.8 liter four cylinder engines equipped with direct injection and will all meet the new U.S. fuel economy standards which are set for introduction in 2011. In trade, Fiat would have access to Chrysler’s newest toy, the V6 Phoenix engine.

All things aside, this deal should solidify both manufacturers for the future and will give Fiat a 35% stake in Chrysler along with access to the U.S. market with the main tool being Chrysler, Dodge and Jeep dealers accross North America.

TURIN – Fiat has decided to go cyber-active and will now offer the possibility to customers to purchase their vehicle factory direct online. As the world turns to more tech savvy alternatives, Fiat teamed with Italian fashion designer DIESEL to offer the 500byDIESEL.

Described as an Urban Survival Vehicle, this 500 will only be offered in the U.K. in a 10,000 unit limited run geared towards the fashion weary generation. By niche marketing its first sales in Britain, Fiat is opening the door to future global e-commerce models that could benefit the corporation by eliminating annoying and costly dealerships and dropping all stocking costs as a whole.

The 500byDIESEL will be available with all three Euro 5-ready power units in the Fiat 500 range – the 69 bhp 1.2 unit, 75 bhp 1.3 MultiJet with DPF, and a 100 bhp 1.4 16v engine. Prices start at £11,150.

The option to buy online will be available at www.fiat.co.uk