Amazing Inventions: Fiat Produces Engine That Increases Ownership In Chrysler

Bertel Schmitt
by Bertel Schmitt
Want to know how to get a good chunk of the Detroit 3, no money down? Easy: Today, Fiat increased its ownership of Chrysler from 20 percent to 25 percent. What did they pay for it? Niente. Fiat received the extra shares “upon the Company’s achievement of the first of three performance-related milestones,” as a Chrysler Group LLC press release proclaims. And what is that milestone? They started making an engine.“An irrevocable commitment letter” was sent “to the U.S. Treasury stating that the Company has received the appropriate governmental approvals and will begin commercial production of the Fully Integrated Robotized Engine (FIRE) in its Dundee, Mich., facility. As a result, Fiat’s ownership interest increased automatically under the terms of the Operating Agreement.”That was easy!They didn’t invent a new engine. They moved the production of the engine that will go into the Fiat 500 to an American factory. Where it is highly tax efficient, even if it otherwise makes no sense to make Fiat 500 engines there.Says the Freep: “While Chrysler is assembling the 500 minicar at its plant in Toluca, Mexico, the engines are produced at Chrysler’s newest and most efficient engine plant in Dundee. Chrysler employs 274 workers in the Dundee plant, which opened in 2005.” Wow.So now, the ownership of Chrysler is as follows:UAW VEBA63.5 %Fiat25.0 %U.S. Treasury9.2 %Canadian Governments2.3 %If Fiat wants more shares, it has to fulfill the following extremely tough milestones:
  • “The first milestone relates to revenue and sales growth outside of the NAFTA region.” That will get them 5 percent.
  • “The second milestone relates to commercial production in the United States of a 40-mile-per-gallon vehicle based on Fiat platform technology.” That will get them another 5 percent.
Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Roy Mears Roy Mears on Feb 05, 2011

    Here is a novel idea that would help everyone not only the car makers. How about we stop getting into free trade agreements and start going for balanced trade agreements. If China wants to sell us a million cars they have to buy a million from us. The same should go for everything else too. If they don't well let them keep there cars and we keep ours. If we started to demand balanced trade two things would happen. There would be one hell of a lot more jobs here and we could wipe out trade deficits. Just think if we can't get products made by slave labor and sweat shops overseas we might have to make it here. The foreign countries couldn't cry foul because we are not putting on tariffs just asking for a fair shake.

  • Bertel Schmitt Bertel Schmitt on Feb 05, 2011

    Sure. That'll work.

    Let's start with bananas.

    Then move to something bigger, like oil.

    And if Boeing wants to sell planes abroad, we need to import Yaks and Ilyushins first.

  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
  • ToolGuy Ford is good at drifting all right... 😉
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