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All Fiat, all the time

Italian marque's majority stake becomes whole ownership

Published: January 3, 2014, 6:00 AM
Updated: June 7, 2015, 10:26 AM

2014 Fiat 500L - badging detail

This week Italian automaker Fiat SpA agreed to purchase the remaining 41.5% of shares in Chrysler it didn't already own, upping its ownership from 58.5% to the whole kit and caboodle. Caboodle, of course, being Italian for "wholly owned."

Fiat on Wednesday agreed to pay $3.89 billion Cdn in payments to a union-controlled trust fund. Auto industry analyst Dennis DesRosiers of DesRosiers Auto Consultants told CBC, "With sole ownership, and the ability to get synergies from the two companies together, Chrysler should be able to operate a little bit more efficiently.  And a more efficient company is a more secure company." DesRosiers said there was no down side to the deal; together, the companies were "much stronger" than apart. He added that the deal should mean reasonable job security for the 3,300 autoworkers at Chrysler's Brampton assembly plant, and the 4,500 hourly employees in Windsor.

“We’re going to have discussions with Marchionne, with Chrysler executives, about what this really means with regards to maintaining a footprint [in Canada],” said Unifor Local 444 president Dino Chiodo, who represents workers in Windsor. “It becomes a global player in the whole economy. He has presence in every part of the globe.”

Fiat shares went up 15% in European trading the day after Wednesday's announcements. The deal says Fiat will pay $1.9 billion US now, then an additional $1.75 billion on closing; Chrysler made an agreement with the UAW to contribute a further $700 million to the trust fund.

"The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization," Marchionne said in a statement.