Chrysler and Fiat in Talks Says Report

MILAN, Jan 19, 2009; Gilles Castonguay writing for Reuters reported that Fiat is talking with Chrysler LLC to form a strategic partnership that could lead to the Italian car maker taking a stake in its U.S. peer, an industry publication said, citing people familiar with the matter.

Fiat could give Chrysler access to platforms, engines and transmissions to help the U.S. car maker overcome its problems, Automotive News Europe said on Monday.

Fiat was not immediately available for comment.

Fiat Chief Executive Sergio Marchionne told an industry publication in December that Fiat needed a partner to survive the crisis.

Apart from Ferrari and Maserati, Fiat does not sell cars in the United States.

Before the crisis hit the car industry, Fiat had been looking for ways to enter the United States and had talked to U.S. automakers about the possibility of using some of their production lines.

Owned by private equity firm Cerberus Capital Management, Chrysler saw its sales fall 30 pecent in 2008. It shut down all its plants for a month at the start of the year to shore up cash and cut inventories of unsold vehicles.

After getting a $1.5 billion loan from the U.S. Treasury, its finance arm is offering zero percent financing for the purchase of a range of Chrysler vehicles.

Editing for Reuters by Hans Peters