Back when the U.S. economy tanked, Chrysler and GM were in dire straits. This led to government bail outs and a considerable stake in Chryser being purchased by the Italian auto giant Fiat and the UAW (United Auto Workers) health care trust fund. Now the UAW wants to pull out and Fiat wants to buy their shares to merge the two companies. Trouble is, the UAW wants about a billion dollars more than Fiat is willing to pay. Unfortunately the economy in Europe slowed drastically, particularly with regards to car sales, around the time of Chrysler’s bail out. Those automotive sales have yet to recover and if it weren’t for its stake in Chrysler, Fiat would have posted a loss last year, instead of a modest profit. It will be very interesting to see how it all plays out. Fiat’s management has been just as instrumental in Chrysler’s recovery as Chrysler has been in Fiat’s financial health. For detailed information and analysis of the situation, I recommend the two articles that I’ve listed below.
- Chrysler Files for IPO as Fiat Seeks Deal to Merge Automakers (bloomberg.com)
- Chrysler files to go public in step toward merger with Fiat (autonews.com)