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Cash for pensions, FCA

by David Zatz on

The former Chrysler Group is still providing independent financial information, due to the conditions of its loans, according to a company spokesman.

Chrysler made a special payment of $1.3 billion to FCA, the worldwide holding company. This was presumably used to service debt and/or help finance the rebirth of Alfa Romeo. The latter may benefit Chrysler as well; the last reliable word on the projects was that there will still be a midsize rear-wheel-drive Dodge car as a result, and that Dodge or Jeep may even gain an SUVas well.

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FCA made sizeable contributions to pension funds for the former Chrysler Group, but they are still underfunded — indeed, they are now more underfunded. The $5.5 billion underfunding of the end of 2013 increased to $5.8 billion at the end of 2013, due to reductions in discount rates (offset by increased returns on assets). The company did make $300 million in contributions to the plan, which earned $3.1 billion; the discount rate change cost it $2.5 billion and “interest, service, and other” cost $1.2 billion.

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304


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