A United States bankruptcy judge approved on 31 July the acquisition of the assets of the Chrysler Group. The distribution goes to a health care trust associated with the United Auto Workers which takes 68%, Fiat has 20%, Canadian government gobbling 12%.
The judge who ruled on the case cited no alternative to the bankruptcy but a fast liquidation of the assets to save the value of Chrysler. The move was opposed by certain consumer groups, an Indiana based pension funds firm, and about 789 Chrysler dealerships. These groups see the move as done in haste and that Chrysler is getting rid of dealerships unnecessarily.
In the wake of the take over, Chrysler was forced to abandon thousands of units in the assembly with engines and components also unfinished. Several plants were also closed down. The halt of the production leads auto experts to assume that there will be delays in the launch of important projects like the new Grand Cherokee of Jeep and the next gen Chrysler 300.
On the other side of the story, Italian car maker Fiat is set to market the 500 minicar in the United States dealerships of Chrysler. The launch is estimated to be 18 months from now.
Fiat executives clarified that the 500 minicar will be the only unit carrying the badge of Fiat. It is hoping to copy the success of BMW in relaunching the Mini several years back.
There are also plans for Chrysler to build units derived from the platform of Fiat. It was made clear that Fiat will not just rebrand their line-up to market in the US.
When Fiat brings in the Fiat 500 minicar, there is a buzz going around that it will be inevitable for the other car makers to compete with the small Italian car.