Fiat keen on Chrysler deal, but sees union resistance

16 April 2009

Italian auto group Fiat SpA's chief executive Sergio Marchionne is sending mixed signals about his company's potential tie-up with troubled US carmaker Chrysler.

Marchionne said in Zurich on Wednesday that Fiat is still aiming for a deal with Chrysler but will not ask for an extension on the deadline for the talks.

''I still intend to reach a good conclusion,'' Marchionne said, speaking at a press conference. ''There is not a single reason why Fiat cannot close by April 30.''

"The objective is to avoid Chapter 11. People would do it if necessary. Our preference is to find a solution with the US Treasury, (unions) and lenders that would allow for a smooth transition to a new Chrysler," the Fiat chief said.

However, Marchionne said in an interview with a Canadian newspaper that there was only a 50-50 chance of a deal succeeding because of lack of progress in talks with union leaders.

The Fiat chief warned that the Italian auto maker could walk away from the deal if American and Canadian unions do not agree to significant pay cuts.