Jump to content
Forums Gone... but not forgotten!
Pontiac of the Month

PontiacStrong65's 1965 Tempest Station Wagon

2023 November
of the Month

RSS Official: Fiat buying rest of Chrysler in $4.35 billion deal, IPO avoided


Recommended Posts

  • Founders

Filed under: Chrysler, Earnings/Financials, Fiat


Chrysler will now become a wholly owned member of the Fiat family, as it's been announced that the 41.46-percent stake in the Auburn Hills, MI-based manufacturer owned by the United Auto Workers' VEBA trust fund will be sold to the Italian company. Concluding the agreement will mark the closure of a piecemeal purchase process that could have resulted in an initial public offering.

The total cost of the sale will see the VEBA healthcare trust receive $4.35 billion, $3.65 billion of which will come from Fiat. $1.75 billion of that will be cash, while an additional $1.9 billion will be part of a "special distribution." An additional $700 million will be paid over four separate installments according to reports from Automotive News Europe and USA Today, although the shares will belong to Fiat following the first payment. The deal was reportedly initially struck on Sunday (though it is just being announced today), and is being portrayed as particularly good news for Fiat and Chrysler, which have now prevented the remaining shares going to the stock market in a UAW-forced IPO.

"The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization that will ensure all employees a challenging and rewarding environment," Fiat CEO Sergio Marchionne said in a statement.

As part of the agreement, the UAW will adopt the "best practices" of Fiat factories from across the globe in its own plants, although it hasn't been explicitly stated what these are and how they will come about.

Overall, this move comes as something of a surprise, as all indications pointed to a Chrysler IPO at some point in January. As recently as December 23, the two parties were reported back at the bargaining table, though, where this finalized deal was likely hammered out. There's a short press release from Chrysler available below if you want to read the rest of the corporate-speak skinny.

Continue reading Fiat buying rest of Chrysler in $4.35 billion deal, IPO avoided

Fiat buying rest of Chrysler in $4.35 billion deal, IPO avoided originally appeared on Autoblog on Wed, 01 Jan 2014 19:47:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments
autoblog?i=UwoslkPRuxQ:8Rlc-2MHFBE:wF9xT autoblog?i=UwoslkPRuxQ:8Rlc-2MHFBE:V_sGL

Link to comment
Share on other sites

Tired of these Ads? Register Today!

I am not sure I am happy about this. Of course its good for the UAW VEBA, they get their money out of it. The last European company to own Chrysler ended up packing themselves up and headed back to Berlin after a few years. Something tells me if the market goes soft in the US again, Turin will not be happy either, and Chrysler's future could well be in question again. Time will tell.

Link to comment
Share on other sites

Fiat has used this to start to sell cars in the US again.

Plus, they did help (so far) with Dodge's small car segment. The Fiat based Dart is something quite nice that Chrysler wouldn't have come up with on their own. (Remember the Avenger? Oh god...)

Link to comment
Share on other sites

I am not saying there aren't some benefits to joint Euro-American platform development and parts sharing. You have to have a global platform mindset to be cost competitive in the auto business today period. I am not saying there aren't any synergies or economies of scale. Quite the opposite really.

I am just wondering how well the two companies cultures will meld. It didn't go over too well in the long run with Daimler and the Germans, so it remains to be seen how successful Fiat and the Italians are. I just hope Fiat realizes that certain options and tastes are uniquely American and don't push somethings onto the U.S. market people aren't asking for (like diesel engines and manual transmissions) as they do in Europe. I am not knocking these items, My point is that the American car buying public is not buying them like they do abroad.

Link to comment
Share on other sites

Honestly, I'd love to see diesel options for say, the Dart. Manuals are wanted as well. I mean, Mercedes, Audi, VW and BMW seem to have no issue selling their diesels here.

However, I can't stand the new Cherokee design. That is hideous, but people are snatching them up. Just not Jeep enthusiasts. :lol:

I already know diesels are coming to most of the Jeeps, to which many people who love Jeeps have been wanting for quite awhile.

Link to comment
Share on other sites

  • Founders

I completely agree with Frosty. Think Chrysler can benefit from Fiat owning them but I truly hope they see the fact that our car market is much different from Europe. Diesels and manual trans might be the least of their worries if they throw all small cars at us and don't cater to Dodge/Jeep followings correctly. Plus design, Italy is usually the best with design but that new Cherokee lookslike it needs to be put out of its misery.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Tired of these Ads? Purchase Enhanced Membership today to remove them!
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.