The embattled, but privately held, auto maker Chrysler said Monday that it has agreed to a “framework” between itself and the Italian auto maker Fiat on a possible alliance to keep Chrysler away from bankruptcy.
The statement comes after President Barack Obama laid out his Administration’s plan for Chrysler and General Motors on Monday, rejecting both auto makers’ turnaround plans, saying both companies must drastically revise their businesses in order to continue receiving government assistance.
In his speech Monday, President Obama said Chrysler “needs a partner to remain viable” and, for all intents and purposes, said the government would require Chrysler to seal a deal with Fiat in the next 30 days or face his Administration withdrawing any further aid to the auto maker. If an agreement is reached between Fiat and Chrysler, the government would provide $6 billion in working capital to Chrysler to allow the two companies to work through a merger
In a statement, Chrysler said it had reached a possible business framework with Fiat, but did said that “substantial hurtles” remain between discussions Fiat and Chrysler before a deal could be announced.