The New Year has barely kicked off, when we hear Fiat has bought the remaining stake in US car giant Chrysler. After nearly 18 months of wrangling, agreement was announced. Fiat is paying $3.65 billion up front for the remaining 41.46 per cent stake in Chrysler. A further $700 million will be paid by Fiat over four years.
The agreement between Fiat and Chrysler's United Auto Workers (UAW) ends 18 months of fractious negotiations. Shares in Fiat rose 12 per cent this week as a result. Central to the lengthy disagreement was the value the UAW placed on the retirement trust. Now that Fiat owns Chrysler outright, it brings closer Fiat CEO Sergio Marchionne's original plan to support the ailing Fiat brand and use shared technologies to streamline daily operations.
"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 organisation that will ensure all employees a challenging and rewarding environment", said Sergio Marchionne.
Anything else?
The audacious move by Fiat to control Chrysler outright started in 2009 after Chrysler filed for Chapter 11 in bankruptcy in the US. At that point, Fiat pounced. The Italian company was seen as the much-heralded saviour to Chrysler by keeping countless jobs. However, since then the tables have turned somewhat. European car makers have been hit badly by the economic downturn. And in the first three quarters of 2013, Chrysler posted earnings of $1.14 billion. Interesting times certainly lie ahead for Fiat.