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Fiat and Chrysler Talk Partnership

Posted: 01/20/2009 - 1:23 PM ET

Chrysler LLC and the Fiat Group are in negotiations to form a strategic partnership that could result in Fiat's mini, small, and mid-sized car platforms being made available to the ailing American carmaker as part of its efforts to strengthen operations and restructure after a federal bailout.

The partnership could allow Chrysler to rapidly produce a new range of low-emission, front-wheel drive models that, with its existing arrangement with Nissan to make a small vehicle, could put the company in a good position to garner sales among drivers looking for fuel efficient cars.

If the deal with Fiat is completed, Fiat would gain a 30 to 35 percent stake in Chrysler and would offer up its platform, transmission technology, and engines according to a European source quoted in an article by Luca Ciferri for Automotive News.

The same piece pointed to a report by Financial Times confirming the existence of a memorandum of understanding between the two parties. Chrysler, citing policy would not confirm details saying, "In today's economic environment, talks are going on between companies in all industries -- ours is no different. Chrysler LLC as a matter of policy however, does not confirm or disclose the nature of its private business meetings. Beyond those partnerships and alliances already announced, Chrysler has no further announcements to make at this time."

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