Fiat bought another 3.3 percent of Chrysler, “bringing it a step nearer to its goal of creating the world’s seventh-largest automaker by sales,” says Reuters. What Fiat really wants is to consolidate loss-making Fiat with profitable Chrysler, and to get “access to some of Chrysler’s cash flow for investments in new models,” the wire says.
With any luck, this time we won’t hear forever “that all they wanted was Chrysler’s cash.” This time, the unions will get a hefty chunk of the cash, and silence is guaranteed once the final price has been agreed.
Fiat was handed 20 percent of a worthless Chrysler in 2009 for free, and has options to increase its stake to 75 percent until July 2014. Fiat can buy 16.6 percent of Chrysler from UAW’s Veba. A court decision on the price Fiat will pay for the shares is still pending, but Fiat said its calculation of the value of the shares is $254.7 million. The UAW probably has a different opinion.