Chrysler Is Now Officially An Italian Company, Total Taxpayer Cost: $1.3b
Video from Chrysler’s last “new day,” shortly after being bought by Cerberus in 2007
According to Chrysler Group’s latest 8K, filed with the SEC today
On July 21, 2011, Fiat North America LLC, a wholly-owned subsidiary of Fiat S.p.A. (collectively, “Fiat”), acquired beneficial ownership of the membership interests in Chrysler Group LLC (the “Company”) held by the U.S. Department of the Treasury (“U.S. Treasury”) and the Canadian government’s special purpose entity, the Canada Development Investment Corporation (“Canadian government”). Fiat acquired 98,461 Class A membership interests in the Company from the U.S. Treasury, representing approximately 6 percent of the fully-diluted ownership interest in the Company for cash consideration of $500 million. Pursuant to a separate agreement, Fiat paid $125 million to acquire 24,615 Class A membership interests in the Company from the Canadian government, representing approximately 1.5% of the fully-diluted ownership interest.
Pursuant to these self-funded transactions, Fiat became the owner of a majority of the membership interests in the Company. Fiat now holds 55.3% of the Company’s outstanding equity, or 53.5% on a fully-diluted basis, taking into account the occurrence of the third and final Class B Event described in the LLC Operating Agreement which is expected to occur by the end of 2011. The remaining equity in the Company is owned by the UAW Retiree Medical Benefits Trust, a voluntary employees’ beneficiary association trust (the “VEBA”).
That’s right, the United States taxpayers are now fully-divested from their “investment” in Chrysler, which is now a majority-owned division of Fiat. Once the EPA certifies that Dodge’s new Fiat-based compact car gets 40 MPG unadjusted combined (about 30 MPG in “window sticker” EPA mileage), Fiat will get another 5% of Chrysler’s equity, bringing its stake in the company to 58.3%. In a statement, the Treasury estimated the final cost of the bailout to be $1.3b (as it does not expect any meaningful recovery from Old Chrysler’s liquidation), although that does not include several taxpayer outlays, without which the rescue of Chrysler would not have been possible. By our math, the total bill for Chrysler’s rescue is closer to $4.7b.
So, after all the drama was it worth it? For now I’ll leave that one to the comment section… and history.
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I don't take sides with any of this - not that I don't stand for anything, it's just the fact that the government will do what it deems right in its own mind, whether anyone else likes it or not. Let's see if this comes back to bite them. I do feel it's more jobs being sent out of the country, though. Am I worried? For now, no, as I'm still laughing over "bacon stripes" and "blitzkrieg..." from VanillaDude's comments yesterday!
Speaking for myself, as a Mopar fan, I think it was worth it. I believe this because Fiat was the only Chrysler parent company that had anything remotely resembling a workable plan to fix the ills of the original Chrysler company ... including its most notorious: inferior quality vehicles. Given such moves, what's so bad about Chrysler being an Italian company? I don't know about anyone else, but I think that's a good thing.