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Michigan Chrysler Dealers Hear Fiat Takes 53.5 Percent Ownership; Chrysler Owns Less Chrysler
Chrysler has been helped by Fiat as the Italian company fronted millions of dollars to buy out other stakeholders that saved Chrysler in 2009 from fading as a company. Michigan Chrysler dealers now know Fiat owns more of Chrysler than Chrysler.
Slowly owning more and more of the Chrysler Group, Fiat has moved to the front of the company, helping Chrysler regain its footing within the auto industry and positioning the company for further successes.
The most recent deal that was struck with Fiat and the federal government included a final payment of $500 million to take ownership of the six percent stake that was still in possession of the Treasury.
[Rewind: Michigan Chrysler Dealers Hear IPO Not Coming this Year; Chrysler Group Not Ready]
On July 21, the final payment was made to the Treasury while Fiat also paid $125 million to the Canadian government for its 1.5 percent stake.
"With today's closing, the U.S. government has exited its investment in Chrysler at least six years earlier than expected," said assistant secretary for financial stability Tim Massed to The Detroit News.
Rep. Candice Miller, R-Harrison Township, added, “Nobody should ever underestimate the ability of the hard-working men and women who work in our domestic auto industry. Chrysler is driving forward with great products, great leadership and an incredible work force.”
The following is a timeline of how Fiat acquired Chrysler a little bit at a time:
• 2009 original stake with management control, technology and global distribution:
• 2011 beginning of January as Chrysler met one (The first milestone was completed in Jan 2011 with production of the fuel efficient Fully Integrated Robotized Engine (FIRE) in Dundee, Mich.) of three Fiat agreed milestones: 25 percent
• 2011 early May as Chrysler met two (The second milestone includes two parts: a) Chrysler must make $1.5 billion in sales outside North America and b) 90 percent of Fiat's Latin American dealers must sell Chrysler vehicles.) of three Fiat agreed milestones: 30 percent
• 2011 end of May as Fiat adds $1.27 billion to consolidate loans: 46 percent
• 2011 end of July as Fiat pays $500 billion to U.S. and $125 Canadian Governments:
At this point, Michigan Chrysler dealers have heard the stake could grow to 58.5 percent by the end of the year as Chrysler aims to reach the final milestone (The third and final milestone sees Chrysler selling a vehicle that earns 40 mpg.) in the original agreement.
Michigan Chrysler dealers may be encouraged to see its company come back from a difficult position to a much stronger stance in the automotive industry. There are more plans from Chrysler Group to complete its goals and continue growing as a corporation.
Check back as MI Auto Times continues to follow the Fiat Acquisition.
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[Source(s): The Detroit News, The New York Times, Reuters, CNN, Daily Finance, Chrysler Media]