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Chrysler LLC has found an international partner in Fiat SpA but the auto maker isn't out of the woods, mainly because the deal is contingent on Chrysler getting $3 billion in additional government loans, said people familiar with the pact.

chrysler fiat loan

As Chrysler struggles to survive, the ability to build small cars is apparently more important than money.

Chrysler, which also makes cars under the Dodge and Jeep brands obviously doesn't have many small cars. And with every market in the world looking to get its hands on cheaper, smaller cars, apparently Chrysler didn't like its outlook.

So the hedge fund that owns Chrysler has just sold 35% of Chrysler to Fiat. Not for a big fat check, but simply for access to Fiat's small car platforms. Chrysler, apparently, sees this as a step on the path toward redemption.

chrysler fiat small cars

The chief executives of General Motors Corp. (GM) and Ford Motor Co. (F) said Wednesday they wouldn’t accept a $1 salary in exchange for government aid to their imperiled companies, as the head of the former Chrysler Corp. did a generation ago.

During a hearing Wednesday, a member of the House Financial Services Committee told Rick Wagoner of GM and Alan Mulally of Ford that reducing their annual salaries to $1 would be an important symbolic gesture as they lobby for $25 billion in loans funded by tax dollars. Chrysler’s Lee Iacocca worked for that wage when his company was bailed out by the government in the 1980s.

gm ford chrysler bailout