Jump to content
News
Reviews
Discussons
Activity
Create New...
Close
  • William Maley
    William Maley

    By William Maley •

    Fiat and UAW Reach A Deal, Takes Full Control Of Chrysler

    The first day of 2014 brings some good news to Fiat. The company announced that it and the UAW's VEBA Trust have reached a deal to purchase the remaining 41.46 percent stake of Chrysler.

    The terms of deal will see Fiat paying the VEBA trust a total of $4.35 billion. $3.65 billion of that will go towards the remaining stake. Also, Fiat will pay the trust $700 million annually over the course of the next four years.

    “In the life of every major organization and its people, there are defining moments that go down in the history books. For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments,” said Fiat-Chrysler CEO Sergio Marchionne.

    Fiat says the deal is expected to happen on January 20th.

    Source: Chrysler

    Press Release is on Page 2

    Chrysler Group Announces Agreement With UAW Calling for Contributions to VEBA Trust and Also Announces a Special Distribution

    January 1, 2014 , Auburn Hills, Mich. - Chrysler Group and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (the “UAW”) have agreed to a memorandum of understanding to supplement Chrysler Group’s existing collective bargaining agreement. Under the MoU, Chrysler Group will provide additional contributions to the VEBA Trust of an aggregate of $700 million in four equal annual installments. The initial payment will be made on closing of a transaction in which the VEBA Trust will sell to Fiat North America, one of Fiat’s wholly owned subsidiaries, all of the VEBA Trust’s equity interest in Chrysler. Additional payments of $175 million will be payable on each of the next three anniversaries of the initial payment. Chrysler Group expects to fund the initial contribution to the VEBA Trust from available cash on hand.

    In consideration for these contributions, the UAW will agree to certain commitments to continue to support the industrial operations at Chrysler Group and the further implementation of the Fiat-Chrysler alliance, including to use best efforts to cooperate in the continued roll-out of Fiat-Chrysler World Class Manufacturing programs, actively participate in benchmarking efforts associated with implementation of these programs across all of Fiat-Chrysler manufacturing sites to ensure objective performance assessments and provide for proper application of WCM principles and actively assist in the achievement of the Group’s long-term business plan.

    The Chrysler Group Board of Directors has also determined to support the declaration and payment by Chrysler Group of a special distribution in an aggregate amount of approximately $1,900 million,1 subject to the Board completing its diligence and receiving independent assurance regarding the distribution payment capacity of Chrysler Group, a process that management expects will be completed on or before January 20, 2014

    Go to articles

    User Feedback

    Recommended Comments

    regfootball

    from the get go I thought it was bull$h! that the tzar decided we needed to sh-tcan pontiac and saturn but keep chrysler so fiat could ultimately do this.

    that said, it's probably better for Chrysler's position in the US now, otherwise they would still need to be put out to pasture.

    Link to comment
    Share on other sites
    G. David Felt

    On the second page, who is the 1,900 million for? not clear at all.

    Lots of additional good info from the web.

    Forbes story says Marchionne has stated that with the merger, a new stock might be issued on the New York Stock exchange rather than in Italy and the new world headquarters might even be based in the US.

    Reuters states that now that the two companies will become one, 2.5 billion of the immediate cash payment will come from the Chrysler 11.5 billion cash horde that Fiat could not touch and that only 1.5 billion will come from available Fiat cash.

    Sounds like Fiat never really had the cash to purchase Chrysler.

    Interesting that Businessweek.com states that multiple banks put Chrysler over all value at between 10-11 billion making the UAW stake worth 4.15 billion. With cash on hand, this seemed to force the 4 years of 700 million payments. Very interesting.

    I like the statement that business week has on their story where they quote the following "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 knowhow, a solid and open organization that will ensure all employees a challenging and rewarding environment," Marchionne said in a statement.

    While it is sad to see an American company change hands to out of the country ownership, this very well could become more interesting. Either Chrysler will grow to truly be a global power house like Toyota and GM or the CEO will cause it to fail just like he has with his own Italian brands. IMHO.

    Link to comment
    Share on other sites
    Blake Noble

    Looks like the want to move the headquarters to Europe.... looking for more details.

    I'm going to agree with Allpar's assessment here.

    From Allpar:

    Many observers believe that the purchase of CNH (Case New Holland) and its merger with Fiat Industrial will provide a template for Chrysler’s organization in the future. The tax headquarters of the combined company is likely to be in a country with minor or no corporate taxes, which could include the Netherlands or even the United Kingdom (which only taxes companies based on revenue raised domestically, a small share of Chrysler and Fiat’s income). The actual headquarters of the combined outfit is likely to stay in Italy, while Chrysler will continue to be run from the CTC in Auburn Hills and Chrysler House in Detroit.

    Edited by black-knight
    Link to comment
    Share on other sites


    Join the conversation

    You can post now and register later. If you have an account, sign in now to post with your account.
    Note: Your post will require moderator approval before it will be visible.

    Guest
    Add a comment...

    ×   Pasted as rich text.   Paste as plain text instead

      Only 75 emoji are allowed.

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor

    ×   You cannot paste images directly. Upload or insert images from URL.

    ×

  • google-news-icon.png



  • google-news-icon.png

  • Subscribe to Cheers & Gears

    Cheers and Gears Logo

    Since 2001 we've brought you real content and honest opinions, not AI-generated stuff with no feeling or opinions influenced by the manufacturers.

    Please consider subscribing. Subscriptions can be as little as $1.75 a month, and a paid subscription drops most ads.*
     

    You can view subscription options here.

    *a very limited number of ads contain special coupon deals for our members and will show

  • Similar Content

  • Posts

    • Robert Hall
      Random Thoughts Thread

      By Robert Hall · Posted

      Not sure...I'm not using it, so apparently it wasn't that useful to me...wherever I've gone, I've been there.    Having on the phone only makes sense because you have to have location services turned on for it to gather data, and your phone is always with you, so...
    • trinacriabob
      Random Thoughts Thread

      By trinacriabob · Posted

      Ok, thanks, but what would be the gain or loss related to the Timeline as a specific feature?  Why they made a bifurcated yes/no decision on desktop versus phone is weird. I will continue to use Google Maps.  Remember Mapquest?  Yikes.   Not to digress, but I use the Moovit app with great success when it comes to planning rides on transit.  It resets itself to the metro area you are in and seems to do a slightly better job than Google Maps.
    • Drew Dowdell
      Cadillac News: 2026 Baby Escalade IQ called VISTIQ

      By Drew Dowdell · Posted

      If the Lyriq's proportions are off, then so are all of the "crossover coupes" from BMW, Mercedes, Audi, and Acura. 
    • Robert Hall
      Random Thoughts Thread

      By Robert Hall · Posted

      Had to look up what Google Timeline was... apparently a feature of Google Maps.  I think I've used it, but several years ago...not something I actively use.  I mostly use Waze for navigation.  I use Google Maps at home on my laptop when exploring an area/planning a trip then Waze when I'm in the car. 
    • trinacriabob
      Random Thoughts Thread

      By trinacriabob · Posted

      With all this discourse, I need some input. I have put off ... and forgetting about ... my election for the Google Timeline, which is about to sunset.  People seem to say it's phasing out for desktop, but will stay on phones.  Like others have said, they get more mileage out of it on their desktop/laptop than other their phone ... ditto for me. Who really benefits from the Timeline?  I've looked at it a few times, mostly to be amused. What election are you or people you know making?  What is/will be salvageable?  What do you recommend?

  • Who's Online (See full list)

  • My Clubs

×
×
  • Create New...

Hey there, we noticed you're using an ad-blocker. We're a small site that is supported by ads or subscriptions. We rely on these to pay for server costs and vehicle reviews.  Please consider whitelisting us in your ad-blocker, or if you really like what you see, you can pick up one of our subscriptions for just $1.75 a month or $15 a year. It may not seem like a lot, but it goes a long way to help support real, honest content, that isn't generated by an AI bot.

See you out there.

Drew
Editor-in-Chief

I've whitelisted
Continue without support

Write what you are looking for and press enter or click the search icon to begin your search