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Chrysler sold to Fiat

Chrysler President James Press testifies at a Senate Commerce, Science and Transportation Committee hearing on GM and Chrysler Dealership Closures: Protecting Dealers And Consumers on Capitol Hill in Washington on June 3, 2009. (UPI Photo/Alexis C. Glenn)
Chrysler President James Press testifies at a Senate Commerce, Science and Transportation Committee hearing on "GM and Chrysler Dealership Closures: Protecting Dealers And Consumers" on Capitol Hill in Washington on June 3, 2009. (UPI Photo/Alexis C. Glenn) | License Photo

AUBURN HILLS, Mich., June 10 (UPI) -- U.S. automaker Chrysler LLC sold its best assets to Fiat Wednesday after the U.S. government sent the company $6.6 billion to help it exit bankruptcy.

The sale creates a new company out of a Big Three automaker with plunging sales, which have fallen to 10 percent of the domestic market, The New York Times reported.

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Chrysler ranks behind Honda with the fifth largest U.S. sales. But idle factories and a restructuring could see changes, including a chance to pair up with Fiat, which specializes in small, more fuel-efficient cars.

The U.S. Supreme Court removed the last obstacle in Chrysler's road to restructuring, refusing to extend a stay given creditors who wanted a better return on their investment. Chrysler filed for Chapter 11 bankruptcy protection on April 30.

The sale gives Fiat 20 percent of the company initially and the United Auto Workers a 55 percent share.

In time, Fiat could increase its shares to 35 percent if it reaches various financial goals, The Detroit News reported.

The U.S. government would control 8 percent; the Canadian government 2 percent, CNN reported.

Federal bankruptcy Judge Arthur Gonzalez in New York ruled Tuesday that Chrysler could proceed with a plan to cut 789 dealerships from its sales network.

The company also expects to shutter eight factories when it reorganizes. However, with all production shut down, Chrysler is currently losing $100 million a day.

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