Ellington

When the US Supreme Court told plaintiffs yesterday that they did not prove the court needed to intervene, they removed the final obstacle for the company's partial sale to Italian automaker Fiat. This morning, the deal was signed, giving new life to the storied American brand.

National Public Radio says that the new company, which will be managed by Fiat, is now capable of becoming a leaner automaker, free to embrace new technologies and build more fuel-efficient cars. NPR is also calling the deal "a victory for the Obama administration, which is trying to move quickly with its plans to restructure the U.S. auto industry."

CNN Money reports that Fiat is getting an initial 20 percent stake in the new company formed by the deal, Chrysler Group LLC, but the carmaker's share will increase if they meet fuel-efficiency goals. Repayment is also part of the deal.

Chrysler Group is 55% owned by the United Auto Workers union. The U.S. government holds an 8% stake and Canada a 2% share. Fiat will not be allowed to take a majority stake until the new Chrysler pays back the $22.1 billion lent to it from the Treasury Department, including Wednesday's $6.6 billion wire transfer.
…
(Fiat chief executive and CEO of the new company Sergio) Marchionne said the Chrysler plants that had been shuttered as a result of the company's bankruptcy process will be back up and running "soon," and the company will focus on developing fuel-efficient vehicles that will "become Chrysler's hallmark going forward."

Previous Comments

ID

148606

Comment

...and how much did Fiat pay for Chrysler? Zero. Can I have GM?

Author

Ironghost

Date

2009-06-10T14:53:33-06:00

ID

148607

Comment

I don't know why they are saying Fiat bought Chrysler . All Fiat got was 20% of Chrysler and their debt. They merged the 2 companies into one. Sounds like Fiat got the raw end of that deal.

Author

BubbaT

Date

2009-06-10T15:03:49-06:00

ID

148609

Comment

I'd bet it was to prop up their UAW buddies. But then I'm a cynic.

Author

Ironghost

Date

2009-06-10T15:11:54-06:00

ID

148610

Comment

I said that wrong they didn't merge the 2 companies. Fiat is still separate. But with the UAW having controlling interest in the new "Chrysler", I doubt they will ever make a profit. But like you Iron, I'm a cynic, too. :)

Author

BubbaT

Date

2009-06-10T15:18:32-06:00

ID

148613

Comment

Do I have to separate you two? Lord have mercy, can you at least give people a chance before condemning them to failure? Y'all are making cynics look good. Chrysler's other option was to go under altogether. Would that have made you two happier? The company has an enormous amount of work ahead of it to be successful. Even the UAW knows that, which is probably why Fiat is managing the operation and not the union. Controlling interest in a failure isn't worth much.

Author

Ronni_Mott

Date

2009-06-10T16:23:46-06:00

ID

148615

Comment

Considering they don't know how to make money and pay labor costs, yeah. Tons of small businesses under due to labor costs. Why can't the same general rules apply to Chrysler?

Author

Ironghost

Date

2009-06-10T17:21:32-06:00

ID

148622

Comment

There are a lot of factors that people are conveniently forgetting that are transpiring in the auto industry. First, these companies were well headed toward disaster before the Obama Administration got involved. Not to mention that these companies appealled to the government for help, including Ford. I also have the funny feeling that if nothing was done, people would be complaining about that. Lost in all of this is the fact that if America loses major manufacturing capability, we will be in bad shape if we ever need to utilize that capability as was needed in WWII. Lost in the political chatter is that regardless of who owns these companies, they will still employ U.S. citizens that will be contributing to the economy. All of the conservatives that are suggesting not buying cars from Chrysler or GM because the government is involved are basically telling people to cut off their noses to spite their faces. Lastly, how interesting it is to see people upset that the U.S. government is involved in trying to save companies that are essential to the health and security of this nation. Interesting because these same people do not have a problem with the U.S. government dictating to other countries how they should run their countries or actually forcing action in these countries. That seems very inconsistent to me.

Author

Goldenae

Date

2009-06-10T19:54:37-06:00