Anyone who read the previous post on Chrysler and Fiat will surely be interested in some more details that have come to light about the two companies as of today in the Wall Street Journal. Hit the jump for some more details and forecasts of what an alliance would do to both companies.

The worldwide economic downturn is affecting more than just the Big Three. Companies all over the world are facing mounting debt and dropping sales as a result of one of the biggest worldwide recessions in at least two generations. Companies like Chrysler, who are on the brink of going under, are doing their best to trim unprofitable vehicles and cut costs wherever they can. Something I did not know until reading the article is how bad Fiat’s sales have been as of late. According to figures, Fiat’s fourth quarter sales have dropped 71% from last year and the company is considering borrowing over 6 billion dollars from banks to compensate for the sagging numbers. What could possibly come out of this alliance that would be good for both companies? Chrysler gets full access to all of Fiat’s cars (minus Ferrari) and would begin the process of homologating some of them for American use. This sounds good,  but while Fiat gets an immediate 35% stake in Chrysler without putting up any cash, it will still take Chrysler at least a year to get any Fiat cars ready for the American market. Some analysts think it may be too late by then.

Other concerns have been brought to light by Senator Robert Menendez of New Jersey who fears that unless the government makes provisions for this alliance, Fiat may gain more than majority stake in the American company. As a matter of fact, as per the agreement in the works, Fiat could raise their stake in Chrysler to over 50% by putting up as little as 25 million dollars. These fears have been addressed by Fiat CEO Sergio Marchionne who is quoted as saying that he has “absolutely no intention” of running Chrysler.

Hopefully this is not the case…Big_Blocker out.