Forza Italia: Fiat Takes Control Of Chrysler, Gummint Gone
Fiat has reached an agreement with the U.S. Government that will give Fiat 52 percent of the shares in Chrysler and therefore the final controlling majorioty. The Treasury said on Thursday it will sell its remaining 6 percent equity stake in Chrysler to Italy’s Fiat in a deal that will net Washington $560 million, Reuters reports.
According to a statement of the Department of the Treasury, “The expected total proceeds to Treasury from this transaction are $560 million. Fiat agreed to pay Treasury $500 million for Treasury’s 98,461 shares of Chrysler. Treasury also held the right to proceeds above a certain threshold received by the UAW retiree trust from the trust’s sale of Chrysler equity, as well as a right to purchase all of the shares retained by the UAW retiree trust for a certain threshold amount – which Fiat will purchase for $75 million. Treasury will receive 80 percent of the proceeds ($60 million) from that $75 million, while the Government of Canada will receive 20 percent of the proceeds ($15 million).
Got that?
The Obama administration invested $12.5 billion in Chrysler. Chrysler will have returned more than US$11.2bn of that amount to taxpayers through principal repayments, interest, and cancelled commitments.
“Treasury is unlikely to fully recover the difference of $1.3 billion,” the government statement said.
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"From an ideological standpoint there will always be those opposed" Ideology makes bad policy. In an ideal world, there would be no government assistance, and each car would have a perpetual motion machine under the hood. Compared to the way things could have turned out, this is a good outcome. It will be cheaper for the taxpayers in the long run, and as pointed out, the automotive landscape is more interesting with Mopar than without. All automakers have their hands in the taxpayers pockets - how much government assistance do the transplants get in the form of tax breaks, cheap land, etc?
One inferior and one at the best mediocre company combined will not result in a good one.
Now that Marchionne got the keys I'll bet he's gonna drive this like a back in the day rental.
Anyone questioning Chrysler's contribution to America should visit their HQ and Technical Center in Auburn Hills, MI. It is an immense, impressive facility that provides thousands of "gold collar" jobs right here. In fact, they have had to acquire additional facilities to house the engineers they are now hiring. Letting the company die would have eliminated this facility and all of the high level jobs. Administration and Engineering are huge components of any car business, but seem ignored by most in their assessments of contributions to America. Chrysler will likely maintain a huge "gold collar" presence in America. The simple truth is, buying Chrysler, Ford or GM provides far more support for our own economy than any foreign brand, where most or all "gold collar" jobs are in their home countries.