Europe Grabs The Emergency Brake

It is the biggest plea for new funds in Italian history. On Sept. 28, Fiat announced it needs to raise $3.2 billion in a combination of asset sales and capital increases. The Turin-based auto maker has run up first-half losses of $600 million, and its sales have plummeted nearly 23%. In six months, a $6 billion investment program has helped triple its debt load to $4.5 billion. The emergency financial plan will radically change Fiat, forcing the Agnelli family--the sole decision-makers at Fiat for almost one century--to share power in a shareholders' syndicate with France's Alcatel and Germany's Deutsche Bank.

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