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No Fiat cash for Chrysler

'No need' says CEO Marchionne

08 October, 16:18

(ANSA) - Rome, October 8 - Despite Chrysler's plummeting sales and shrinking market share, Italian automaker Fiat has no intention of pumping cash into the Detroit No.3 it took control of earlier this year, Sergio Marchionne, chief executive officer for both companies, said on Thursday.

Chrysler sales tumbled 42% last month over September 2008 and its North American market share in one year shrank from 9.5% to 8.3%.

In an interview published by the Toronto daily Globe and Mail, Marchionne said Chrysler did not need a cash input because it was ''managing its resources well''.

The CEO said he expected Chrysler to begin producing an operating profit within the next two years.

According to The Globe and Mail, Chrysler still has some $7 billion in cash available from the bail-out fund set by by the American and Canadian governments and various lines of credit. Marchionne is set to unveil a new turnaround strategy for Chrysler on November 4 which The Globe and Mail said will ''give details on Chrysler's five-year production, marketing and financial plan, including the extent of the collaboration with Fiat''. ''While Fiat and Chrysler will remain separate companies, they are expected to reveal a full technological and design merger scenario,'' the Toronto daily added.

Fiat recently acquired the Bertone design and chassis company where it is expected to produce Chrysler models, including those of the Jeep marque, for sale in Europe.

Earlier this year Fiat acquired a 20% stake and management control of Chrysler in exchange for its cutting-edge green and small car technology, as well as access to Fiat's sales and service networks in Europe and Latin America.

The stake will rise to 35% once benchmarks are met in the US, including producing Fiat and Alfa Romeo models in Chrysler plants.

Fiat has an option to take a majority stake in Chrysler once federal bail-out loans have been repaid.

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