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Supreme Court rejects call to delay alliance

Fiat has been cleared to form an alliance with bankrupt car maker Chrysler.

The US Supreme Court rejected a request by three Indiana state pension and construction funds to delay the deal while they challenge Chrysler's sale to a group led by Fiat, a United Auto Workers union trust and the US and Canadian governments.

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It was decided that a full appeal against the plan was not justified. The US government has backed the sale and welcomed the decision.

"The Chrysler-Fiat alliance can now go forward, allowing Chrysler to re-emerge as a competitive and viable automaker," a statement said.

"We are gratified that not a single court that reviewed this matter, including the US Supreme Court, found any fault whatsoever with the handling of this matter by either Chrysler or the US government."

The Chrysler dispute is the first time the Supreme Court had been faced with legal issues involving the US government’s power to deal with the economic crisis.

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