FIAT IS BACK!-NOBODY WANTED TO BUY ITS CARS FOR GOOD REASON IN AMERICA-THEY WERE CRAPPY! BONDHOLDERS BEWARE, US GOVERNMENT WILL TOSS ASIDE YOUR LIENS

FIAT whatever, now got a stake in Chrysler for FREE, while the secured bondholders got "fiatted".

If you are a secured bondholder, AND THE GOVERNMENT GETS INVOLVED, the Supreme Court will also seek to screw you in siding with the Chavez mentality of the new administration.

Secured bondholder, so what, you get nothing, and the UAW gets everything.

Will that be the fate of other companies? The stockholders get nothing, the bondholders get nothing and the employees take over for nothing?

Seems that way.

FIAT, an auto builder who last sold cars in the USA decades ago, you know the crappy little lightweight really rusty ones that would always break down, and there would be a lack or parts.....that FIAT, now will provide its "technology" to Chrysler. For that it got to own stock and its stake can grow further.

Basically, now the UAW, US government and FIAT own Chrysler.

Stockholders got the shaft, bondholders got the shaft, dealers who were tossed out got the shaft, and the taxpayers got the shaft.

Now what do you think of the future of such a company ?

Fiat SpA bought a stake in most of Chrysler LLC’s assets, creating the world’s sixth-largest carmaker in Chief Executive Officer Sergio Marchionne’s plan to survive the recession by setting up a global alliance.

Fiat, Italy’s biggest manufacturer, will own 20 percent of the newly formed Chrysler Group LLC and is aiming for a 35 percent stake if certain operational goals are achieved, the companies said today in a statement. The United Auto Workers’ union retiree health-care trust fund will be the biggest owner, with 55 percent when Fiat reaches its target holding.

The combined carmaker would have sales of 4.5 million vehicles globally, ranking just behind Ford Motor Co. based on 2008 figures. Marchionne is pushing for consolidation in the auto industry because he expects only six global producers to survive the first global recession since World War II.

“Marchionne will be focused on restructuring Chrysler, but he’s still looking for other possible mergers and acquisitions,” said Karim Bertoni, who manages the equivalent of $18.5 billion at Banque Syz in Geneva and doesn’t own Fiat stock.

Fiat rose 36 cents, or 4.9 percent, to 7.79 euros in Milan trading, the biggest gain in five weeks. The shares have increased 70 percent this year, valuing the Turin, Italy-based carmaker at 9.39 billion euros ($13.1 billion).

The Italian company isn’t providing any cash for its stake, instead contributing technology such as engines and vehicle designs that Chrysler has valued at as much as $10 billion.

Russia, Latin America

The U.S. government will hold 8 percent of the new Chrysler and Canada will own 2 percent, the companies said. Fiat will help Chrysler, which is based in Auburn Hills, Michigan, sell cars in Russia and Latin America, they said.

Until Fiat gets its additional 15 percent, the ownership breakdown is 20 percent by the Italian company, 9.85 percent by the U.S., 2.46 percent by Canada and 67.69 percent by the UAW retiree medical fund, according to bankruptcy court documents.

The transaction is Marchionne’s first toward his goal of selling 6 million cars a year, the minimum he says is required to be profitable through the economic contraction. Chrysler, which shut its 22 U.S. factories on May 1, didn’t receive any other bids for its assets.

Marchionne already realigned Chrysler’s management, installing a new chief financial officer and putting new leaders in charge of the individual brands.

Opel Offer

Fiat also made a non-cash offer in May for General Motors Corp.’s Opel and Vauxhall brands in Europe. Magna International Inc., Canada’s biggest car-parts maker, was chosen at the end of last month as preferred bidder for the GM Europe division and is in talks on completing the takeover.

Most of Chrysler’s operations will be shifted to the new company, excluding eight factories, dozens of pieces of real estate, equipment leases and contracts with 789 U.S. auto dealerships. Among the agreements excluded are vehicle-assembly and wholesaling ventures in Canada and Mexico with Daimler AG, its former owner, and a contract hiring investment bank Lazard Ltd. to help sell the Dodge Viper sports-car operations.

Chrysler filed for bankruptcy protection on April 30, using the reorganization to retain what it considers its strongest assets and form an alliance with Fiat. The U.S. and Canadian governments are financing the Chrysler sale with $2 billion and are loaning the new company $6 billion for operations.

Performance Goals

Fiat has the option of raising its stake to 35 percent by meeting performance goals, including building a Fiat car in the U.S., selling Chrysler vehicles in foreign markets and offering a car that gets 40 miles per gallon or more in the U.S.

The sale will let the U.S. carmaker revive its Chrysler, Jeep and Dodge brands with less debt and lower wage costs as Fiat provides technology, platforms and knowledge. Fiat built just over 2 million cars last year, ninth worldwide.

The U.S. Supreme Court overturned objections to the transaction by Indiana state pension funds and U.S. consumer advocates, ruling yesterday that the challenges didn’t meet the legal standard for an emergency stay of the deal.

Marchionne becomes the CEO of the new company and Robert Kidder, former chairman and CEO of Borden Chemical Inc. and Duracell International Inc., is chairman. Jim Press, one of Chrysler LLC’s two presidents, was named deputy CEO, while Peter Fong, director of the Mid-Atlantic Business Center, will be group sales chief and run the Chrysler brand.

Michael Manley, Chrysler LLC’s international sales chief, will oversee the Jeep division and Michael Accavitti will lead Dodge, where he has been head of marketing. Richard Palmer becomes Chrysler Group’s chief financial officer, shifting from the same post at Fiat’s automotive group.

The pairing of Chrysler and Fiat brings together companies with largely different products and markets. Chrysler gets more than 90 percent of its sales from North America through its three brands. Fiat has almost no presence on the continent.

The Italian automaker has the most fuel-efficient lineup of vehicles in Europe while Chrysler is known for V8-powered large sedans, sport-utility vehicles and pickups. Chrysler may begin selling the first Fiat vehicles in as little as 18 months, executives at both companies have said.

Just what we need more cars nobody wants to buy.