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After Chrysler Deal, Fiat to Face Tough U.S. Car Market

Chrysler finalized the sale of its assets to Italian automaker Fiat Wednesday after the Supreme Court cleared the way for the deal. Analysts examine the future for the newly merged company.

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    Chrysler finalized the sale of its assets today to Italian automaker Fiat. The U.S. Supreme Court cleared the way last night when it refused to hear objections from Chrysler bondholders.

    The new Chrysler Group starts without billions of dollars in debts and labor costs that weighed down the old Chrysler. It also shed nearly 800 dealerships in the bankruptcy process. The head of Fiat will run the new company. He said today Chrysler's plants will reopen soon.

    In Washington, White House press secretary Robert Gibbs welcomed the announcement.

    ROBERT GIBBS, White House press secretary: I think it gives everybody confidence. Obviously, we had great confidence in the restructuring plan that had been put together as part of the deal that's now been finalized with Chrysler and Fiat. It gives Chrysler a restructured opportunity to move forward.


    As part of that deal, the U.S. Treasury will lend the new Chrysler $4.7 billion, and the U.S. and Canadian governments will control 10 percent of the company. Fiat will own up to 35 percent, and the United Auto Workers union gets 55 percent.

    Now Jeffrey Brown has more on our lead story.


    And with Chrysler emerging from bankruptcy, what now for a future with Fiat? For that, we turn to John Wolkonowicz, a senior analyst at the economic forecasting firm IHS Global Insight, and Francesco Guerrera, a U.S. finance and business editor for the Financial Times.

    Well, Mr. Guerrera, start with the bankruptcy itself. There were objections and obstacles, but did the company and the government get what they wanted out of this?

  • FRANCESCO GUERRERA, Financial Times:

    They got exactly what they wanted, which was a quick in-and-out of bankruptcy. It was crucial, in their view, to the survival of Chrysler so that people didn't flee, both the employees and the customers. They got what they wanted. Now they can start resuscitating the company.