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In a few months, Fiat will own 46 percent of Chrysler, Fiat announced today in Turin. With another 5 percent milestone reached by the end of the year, Fiat will have the 51 percent majority in Chrysler. According to Germany’s Automobilwoche [sub], the 46 percent level will be reached after Chrysler has paid back the government loans. Payment of the loans is expected for the second quarter of 2011.
According to Automotive News [sub], Fiat has agreed to pay $1.27 billion for the 16 percent stake in Chrysler. The deal turned out to be a little cheaper than the $1.5 billion expected last week.
20 Comments on “Fiat Gets A Deal On Chrysler: Majority For $1.27 Billion...”
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given where they were after Daimler and Cerberus, this association is one to be thankful for and truly appears to be a merger unlike previous portrayals of such. you go Sergio!
footnote of thanks to Red Ink Rick for making this all possible by paying the banksters for advice not to buy Chrysler and for funneling $2 Billion to Fiat thereby enabling them to do so.
Yeah, and maybe all those Chrysler fans who keep telling us that Chrysler is an American company will finally give it a rest.
Chrysler is an American brand, soon to be owned by an Italian company.
Jaguar and Land Rover are still British brands, even though they are owned by Tata. Same thing here.
Congrats FIAT for: 1. getting out of your relationship with GM, 2. Getting in a relationship with Chrysler, and 3. Not being Daimler.
+1. I truly think this is a marriage of like-minded companies – a much better blend with Daimler or with Cerberus.
The Hope Diamond of automobile companies…Daimler – strike 1; Cereberus – strike 2; Fiat – strike…….
Actually it’s supposed to be the Jeep curse – 1st AMC, then Chrysler, then Cerberus… etc.
Don’t forget Kaiser!
Fiat never dreamed they could buy a U.S car company and get the dealer network for almost nothing.
I sure hope we get some interesting cars and the reliability get to where it needs to be.
I too hope for some new designs and relief from the near hegemony from small asian car designs. Ford has provided a big step forward with the Fiesta and Focus in that regard. I’ve liked many of the Fiat designs from afar, let’s hope that the actual cars work as well as they look.
I (jokingly) considered putting up one of those Facebook groups: “I bet I could get a million Facebook users to buy Chrysler from Cerebus” a couple of years ago as a prank. I had no idea what would happen with the bailouts and etc. Wouldn’t it have been funny if I had actually gotten a million FB users to buy Chrysler?
Can anyone explain to me how a car company that was bleeding money and had no new designs can now possibly be viable..?
They had new designs – the Hornet B class, the 200 D class, the Jeep Trailhawk (fore-bearer of the new JGC) as well as new minivans and Ram production (2007-09 years), but 1st Daimler and then Cerberus would not spend the money needed to fill the product pipeline. A million bucks for a concept car but not a billion bucks for a production ready vehicle.
@high desert cat-
The 51,000 US Chrysler employes in the U.S. , particularly 10,000 of them at their HQ in Auburn Hills MI working to design, develop and market Chrysler products might disagree on whether they are an American company or not.
btw- Chrysler’s HQ is full! They need more space for the engineers they are hiring.
It never ceases to amaze how little folks here know about what it actually takes to run a car business. The most strategically important parts of the business, product development and administration, seem to be ignored in all the discussions about the value of saving these companies.
easy. quick rinse thru BK combined with a union leadership prostituting itself by crawling into bed for millions in VEBA admin fees. add in a gov’t passing out more money in the name of plant modernizations and there you have it. trouble is the turniquets and bandaids haven’t repaired the source of the bleeding…incompetent marketing management.
‘Imported from Detroit’ but owned and controlled from Italy. Chrysler can laugh off the incongruity of their domestic chest thumping with a TV spot featuring Lido Iacocca making some Italian-American quip.
“The deal turned out to be a little cheaper than the $1.5 billion expected last week.”
Wow – whocoodanode? I am shocked! … almost as shocked as I will be to learn that not one dime of that $1.27 billion – or any of the remaining cash to gobble up Chrysler will actually come out of Fiat’s pocket.
Like GM, when corporate welfare puppy Fiat says “We give you your money back” they really mean it.
I’m actually OK with this deal. I wouldn’t be surprised if a liquidation would have cost the taxpayers even more than the bailout. There’s no sense comparing the situation to some ideal, you have to compare it to the next best alternative that was available.
Sergio seems to be doing a good job driving a turnaround. They seem to have acknowledged their problems, and appear to be heading in the right direction.
It’s a good deal for Fiat – they get instant access to the second largest market in the world.
It’s a good deal for Chrysler workers – they get to keep their jobs.
It’s a good deal for taxpayers – a liquidation would have cost more.
“There’s no sense comparing the situation to some ideal…”
How about comparing it to a legitimate bankruptcy proceeding?
Would a “legitimate” bankruptcy have cost the taxpayer less in the end?
The stock and bondholders got burned badly – but I don’t have a problem with that, that’s the risk they took when they decided to back sketchy management.
@tparkit- Exactly what do you mean by “legitimate” bankruptcy proceeding?
Who do you think would have financed it? (I suggest the only entity capable of doing so was government. After all, the credit freeze that collapsed car sales also made it virtually impossible for companies to borrow either.)
Do you think customers would have continued to buy Chrysler products if they spent several years going through bankruptcy? (I doubt any financing for bankruptcy could have been obtained, but even if it could, I suggest it would have been a quick death spiral in a year or less, and would have cost taxpayers far more in the end with Chrysler being liquidated. Since they share suppliers, it likely would have collapsed the entire automotive sector, foreign transplants included, with a mind boggling cascade of bankruptcies.)
Chrysler was pushed into bankruptcy by the global financial crisis, resulting credit freeze and collapse of the U.S. market in mid October ’08. U.S. sales averaged 17M a year from 1999 to 2007, then fell to 13.5M in ’08. That obscures the fact that most of that drop occurred in just the last 2 1/2 months of the year. Toyota lost money globally for the year and went on to lose even more than GM in the first quarter of ’09 due to the weak U.S. market. The market bottomed at 10M in 2009, a nearly 40% drop from the norm.
That is why Chrysler was burning through cash then, but still has the potential to be viable today.