Word: fiat
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...that sense, GM is getting off easy: Obama's task force gave Chrysler just 30 days to seal its proposed partnership with Italy's Fiat Group - or else join the likes of American Motors, Packard and Studebaker in the auto graveyard. If Chrysler gets the deal done, the government will lend it $6 billion to sustain its operations. But Chrysler's owner, Cerberus Capital Management, will leave with zero of its $7.4 billion original investment. (See the 12 most important cars of all time...
...Quadrangle Group, and Ron Bloom, an investment banker who previously worked for the United Steelworkers union. Staffed by about 15 restructuring and other experts, the task force aims to do two things in the weeks ahead. First, it will try to close the deal on Chrysler's sale to Fiat. Sources familiar with the task force's approach describe Chrysler as "hollowed out" by a succession of owners and largely worthless, with no quality brands other than Jeep and little hope of restructuring itself into a viable concern...
...Bloom has taken the lead in trying to negotiate the sale of 20% (at least initially) of Chrysler to Fiat. His position has been undercut by Chrysler's tenuous finances, leaving Fiat holding the cards at the negotiating table. The $6 billion sweetener from the government essentially amounts to a dowry for Fiat to take the ugly bride off America's hands...
...investment and should lose all their money, says one person familiar with the President's auto task force. Rattner also took the point in ousting GM chief Rick Wagoner over the weekend. Bloom, for his part, has taken day-to-day leadership in talks between Chrysler and Italian automaker Fiat. His union bona fides have made him the point man with the United Auto Workers union and its chief, Ron Gettelfinger. (See the 50 worst cars of all time...
...real test of Rattner and Bloom's collaboration is upcoming. Obama, in putting new conditions on any more billions being handed to Detroit, gave Chrysler 30 days to strike a partnership with Fiat and GM 60 days to avoid bankruptcy court. Rattner will have to browbeat intransigent bondholders. Bloom will have to force major benefit cuts on the unions. And both will have to sell management on a radical reordering of their companies, one in which both capital and labor take a serious hit in order to keep the machine running...