Fiat completes it's buyout of Chrysler.

I was surprised to learn that yesterday Fiat completed it’s buyout of Chrysler. I’m not surprised that it happened; Fiat has wanted to complete the buyout so it can use Chrysler’s money to fund it’s own restructuring. I am surprised that the deal went down on New Years Day. Plus, I’m surprised that they got it so cheaply. The total price is $4.35 billion, with about 60% of that coming from Chrysler itself. Fiat only needs to come up with $1.75 billion. The VEBA that currently owns the stock had been insisting on a price over $5 billion. They need the money to fund the retirees’ healthcare plan (since you can’t pay for doctors appointments with shares of stock).

So far, I’m afraid this is shaping up to be a repeat of the Daimler-Chrysler debacle, where Daimler pretty much beat up Chrysler, robbed it, and left it for dead in a roadside ditch. Only this time, the thugs are Italian, not German.

But Italian thugs are much more charming than German thugs. I think it’s those thin mustaches.

Actually, that’s been true so far :smiley:

I gather that the culture clash under Daimler was awful. Of course, it didn’t help that the Chrysler workers were flat-out lied to. It was billed as a “merger of equals.” That pretense lasted about two days before the American boss left and the Germans took control of everything.

what hasn’t been mentioned-Fiat got Chrysler for nothing-the US taxpayer paid for the acquisition. Another “big success”-and Marchione now gets the company and its assets.

The more I think about it, the more I begin to suspect that the announcement was made on Jan. 1st in an effort to “hide” it from the American people, because they knew that many of us would be less than thrilled by this. I mean, the only thing open for business on New Years Day is WalMart. I know for a fact that the automakers are all still on their holiday shutdown.

Show your work, ralph. (In other words: cite?)

Here ya go:

Yes, making loans that got paid back fully, with interest, so that the company would continue to exist and provide American jobs etc. was a *horrible *idea of Obama’s, wasn’t it?

Do you even know what would have happened otherwise? Chrysler was bankrupt and about to liquidate. Then what?

Thank you. However, according to that article, after their initial “purchase” of 20% of Chrysler, Fiat paid $2.2 billion to become the majority owner, and is now paying $4.4 billion to buy out the UAW’s stake in the company. How is paying $6.6 billion equal to “Fiat got Chrysler for nothing”, as you described it? (Whether they underpaid for it, or whether the U.S. government priced it too low, is another question.)

Also, I’d note that your source for that article may just have an axe to grind, and may be less than unbiased.

I think that ralph124c objects to the fact that Chrysler was bailed out back in 1979. Had it not been for the Carter administration, Obama wouldn’t have been put into this awkward situation of having to bail it out a second time.

Having visited all three of the big three, I like the atmosphere at Chrysler the most. This is when dealing with folks working on vehicle innovation, not manufacturing. They seemed exited about their new overlords, but I don’t know if that was an act.

I don’t think that’s accurate. The US Government wrote off $7.2 billion in loans to Chrysler. (And the Canadian government another $900 million.) Also, the US Government lost $1.3 billion on the sale of Chrysler stock.

Well, the Government could have distributed $8 billion directly to Chrysler’s employees, and saved money. :wink:

Any chance we’ll start seeing more Fiats or other brands under the Fiat umbrella? I can think of cars that might be more interesting than the Fiat 500.

It’s possible, but so far Fiats aren’t selling well in the US. From what I’ve read, they seem to be most interested in building up Masterati. That might generate a bit of interest, but of course zillion-dollar luxury sports cars are going to be a definite niche product.

It might not be accurate to say that Fiat got Chrysler “for nothing,” but in fact Fiat did get the initial 20% ownership literally for free, with rights to purchase additional shares to give themselves majority ownership. Sounds like a real sweetheart deal for them.

Open Market is a partisan political, ideologically driven publication. So its not a very convincing source for a cite.

Were not the auto bailouts initiated by the Bush government and continued by Obama?

In the CNN articles that I linked, you’ll see that the Administration confirmed having written off those loans. I can’t speak to whether Fiat got Chrysler for nothing, but certainly the US Government subsidized the purchase by eating those losses.

If Chrysler and GM had gone through traditional bankruptcy, the US taxpayers would not be out over $50 billion. Think how much those jobs cost the taxpayers. And, traditional bankruptcy would have had the new companies emerge with most of the deadwood gone-Obama preserved all of the bad features of the old GM. But he needed Democrat voters, so cost was no object.

When Daimler spun off Chrysler to Cerebrus back in 2007, the total value of the deal was approx. $7.4 billion.

Chrysler sold 1.7 million cars last year, up sharply from their 2009 figure of barely over 900k, but still below their 2005 level of 2.5 million cars.

So $6.6 billion doesn’t sound too off the mark.

Ralph, your last statement about “Obama preserved all of the bad features of the old GM” shows your ignorance of the subject matter. Read “American Turnaround” by Ed Whitacre and Leslie Cauley, and “Overhaul” by Steve Rattner for a more comprehensive view of the GM bailout. Neither Whitacre nor Rattner are fans of each other, but their competing viewpoints still support the contention that the “old GM” was largely done away with by Whitacre (Rattner says Whitacre should have stayed longer as CEO, Whitacre says Rattner was too political. They’re probably both right.)