Fiat, Chrysler Enter Strategic Alliance

Fiat and Chrysler have completed the strategic alliance that will put Chrysler's good assets into a new firm.

Fiat chief executive Sergio Marchionne will take control of the new company, which will begin operating immediately.

Fiat is not paying any money for its 20% of the new firm but will contribute technology to make smaller Chryslers, the BBC reported.

The deal was completed on Wednesday after the US Supreme Court dismissed an appeal against it from three Indiana state pension and construction funds.

The deal paves the way for Chrysler to emerge from bankruptcy protection. Fiat's shareholding will expand to 35% if certain targets are met. The United Auto Workers union gets 55% of the new company, while the US and Canadian governments will take stakes of 8% and 2% respectively.

Chrysler filed for bankruptcy protection on 30 April, suffering from depleted sales, huge debts and crippling labour, pension and healthcare costs.

The new Chrysler will still have its headquarters in the US state of Michigan and will produce Chrysler, Jeep and Dodge branded vehicles and Mopar spare parts.

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