The UAW has enlisted the help of the German IG Metall labor union in its effort to organize Volkswagen’s U.S. operations. Now Fiat has apparently gotten the union that represents its Italian workers, Fim Cisl, to reach out to UAW officials in an effort to resolve the issue of just how much Fiat is going to pay the UAW’s retiree health benefits trust for the 41.5% of Chrysler the VEBA owns. Fiat and Chrysler CEO Sergio Marchionne wants to merge the two companies and that can’t be done without buying that stock. Fiat and the VEBA sides are more than a billion dollars apart.
Marchionne would like to avoid an initial public offering of Chrysler stock, which would complicate his merger plans. Per the VEBA’s rights, the process for an IPO has been started. Also no doubt the Fiat CEO would like to come to an agreed price before a trial for the valuation of some of the VEBA’s shares begins next September.
In an interview with the Automotive News, Ferdinando Uliano, who is in charge of relations with Fiat for Fim Cisl, said, “We are concerned that a Chrysler initial public offering would harm a combination of the two carmakers. We’ll tell the UAW that only a merger of Fiat and Chrysler would grant a positive future for both companies’ workers.”
The Fim Cisl delegation plans to meet with UAW president Bob King and other UAW leaders in Detroit.
Merging the two companies would give Marchionne access to Chrysler’s $12 billion in cash to help finance Fiat’s turnaround in Europe. The Italian automaker is currently not profitable and it is losing market share in its home market of Europe. Fiat’s September sales in Europe were off by 3.4% as the overall market was up 5.5%.