Skeptics frown on Chrysler and Fiat partnership

Can Italian automaker Fiat help Chrysler become a strong company? Well, we’re all about to find out; however, investors and analysts are showing a little bit of skepticism on the newly announced Chrysler and Fiat partnership that gives Fiat a 35 percent stake in Chrysler.

Analysts say that Chrysler needs cash and competitive new models – none of which Fiat can bring on-board. Fiat is making no cash investment for its 35 percent holding in Chrysler. Nonetheless, the deal will give Chrysler access to Fiat’s fuel-efficient small car platforms and engines.

Chrysler is operating on $4 billion in federal loans and seeking $3 billion more.

“We are fairly skeptical in terms of the concrete benefits that an alliance of this kind could bring for Fiat,” analyst Georges Dieng wrote in a report for Natixis Securities.

We guess only time can tell.

Source: Detroit Free Press