[Allpar News System]

In two venues, Chrysler and Fiat Auto CEO Sergio Marchionne repeated his desire to have Fiat and Chrysler joined as a single company, through a flat buyout of the retiree health care trust fund (VEBA)’s stake in the company. Earlier he had said that there was a 50-50 chance of an IPO, which would let the VEBA use the markets to set a price on their shares (at the cost of substantial attorney and advisor fees), but that he would prefer an outright buyout. Even if there is an IPO, Fiat intends to buy as much of Chrysler as it can, making Chrysler stock a good bet for speculators. Currently, the VEBA owns 41.5% of Chrysler, but it needs cash to meet its continuing obligations to retirees. Today, from Geneva, Marchionne said that he had been in discussions with a number of bank “CEOs and chairmen who want to help” to..

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[jazz77]

I wonder what would have happened if Fiat had bought Gm Europe like Sergio wanted in 2009. I don't think they would be able to buy Chrysler now provided Opel had a crazy 6,5 billion dollars net loss last year.

I mean buying Opel would have certainly created an impressive economy of scale in Europe, but considering how things played out in the European market Sergio got pretty lucky to have GM changed its mind .

 

[sebring96hbg]

I wonder what would have happened if Fiat had bought Gm Europe like Sergio wanted in 2009. I don't think they would be able to buy Chrysler now provided Opel had a crazy 6,5 billion dollars net loss last year.

I mean buying Opel would have certainly created an impressive economy of scale in Europe, but considering how things played out in the European market Sergio got pretty lucky to have GM changed its mind .

SM would have purchased a pared down Opel, not the bloated, money-sucking black hole that it is now and has been for years.

 

[Dave Z]

I'm pretty sure he would have been much more aggressive about factory shutdowns, especially considering that Opel, if I'm not mistaken, is centered in Germany... not his favorite place.

But yes, it would have hurt Chrysler, having all that extra capacity and all those cars that duplicate what they are trying to get from Chrysler...

I don't think the losses would have been nearly as high with Sergio in charge.

 

[Erik Latranyi]

SM would have purchased a pared down Opel, not the bloated, money-sucking black hole that it is now and has been for years.

That's right. The current GM and Opel have not restructured as much as Chrysler did going into and under bankruptcy.

Opel would be a very different company today.....but Marchionne would be the bad guy, especially to many Germans.

With Chrysler, he was given a company that was already stripped of excess baggage, given loan guarantees by the US and Canada, and only had to promise to live with VEBA part-ownership and the task of building a car that would get over 40 mpg under CAFÉ testing.

 

[Mopar392]

...and only had to promise to live with VEBA part-ownership and the task of building a car that would get over 40 mpg under CAFÉ testing.

And those aren't easy tasks..

 

[Erik Latranyi]

And those aren't easy tasks..

True, but I would take that over massive layoffs, plant closings and firing of engineers any day!

 

[tryphon]

I wonder what would have happened if Fiat had bought Gm Europe like Sergio wanted in 2009. I don't think they would be able to buy Chrysler now provided Opel had a crazy 6,5 billion dollars net loss last year.

I mean buying Opel would have certainly created an impressive economy of scale in Europe, but considering how things played out in the European market Sergio got pretty lucky to have GM changed its mind .

They would have benefited from the massive German government help provided to avoid cuts in the workforce.

 

[Erik Latranyi]

They would have benefited from the massive German government help provided to avoid cuts in the workforce.

But would you want your hands tied like that when the problem is over-capacity?

 

[dartndodge]

With the current turmoil on the Italian Political scene, they effectively have no government at the moment, apparently, There wont be any money coming from the Italian Government to bail out Fiat, when it again, comes into Money problems.

As it is, it has been reported in Europe, that in fact Chrysler is holding Fiat together, an it is the Profit from Chrysler that is propping up Fiat.

Without the Fluke of getting Chrysler, Fiat would be gulping air, about to drown in debt.

I cant see SM's "Friendly" Bankers, rushing to throw money at Fiat.

Perhaps Chrysler should take the opportunity and get rid of the lame duck Fiat, and go it alone....Maybe make some acquisitions of its own....preferably not European ones.... .

 

[jerseyjoe]

I think if Fiat mentions merger enough times people may believe it

 

[1969 300]

I guess the big question is where the new entity will be based. Remember that with the "Daimler" merger, Auburn Hills and Stugartt were supposed to be "joint world headquarters." We all know how that turned out. If it is not in the US, then there should be checks and balances built into the corporate charter.

 

[jazz77]

With the current turmoil on the Italian Political scene, they effectively have no government at the moment, apparently, There wont be any money coming from the Italian Government to bail out Fiat, when it again, comes into Money problems.

As it is, it has been reported in Europe, that in fact Chrysler is holding Fiat together, an it is the Profit from Chrysler that is propping up Fiat.

Without the Fluke of getting Chrysler, Fiat would be gulping air, about to drown in debt.

I cant see SM's "Friendly" Bankers, rushing to throw money at Fiat.

Perhaps Chrysler should take the opportunity and get rid of the lame duck Fiat, and go it alone....Maybe make some acquisitions of its own....preferably not European ones.... .

I'm sorry but your post is just a mess, it seems like you heard some rumors but didn't really take the time to understand.

Chrysler's cash cannot be used by Fiat thus Chrysler's profits are not propping up anything. As a matter of fact Fiat's share value is depressed despite good consolidated profits. And there's no such a thing as "money problems" since cash reserves at Fiat are pretty significant right now.

 

[jazz77]

I guess the big question is where the new entity will be based. Remember that with the "Daimler" merger, Auburn Hills and Stugartt were supposed to be "joint world headquarters." We all know how that turned out. If it is not in the US, then there should be checks and balances built into the corporate charter.

I believe the world headquarters will stay in Turin, mainly because of historical reasons but also because it's where the ownership live and have their business.

The doubt which Marchionne has expressed is about the legal seat, which fundamentally is an issue connected to the listing options.

 

[MoparNorm]

I believe the world headquarters will stay in Turin, mainly because of historical reasons but also because it's where the ownership live and have their business.

The doubt which Marchionne has expressed is about the legal seat, which fundamentally is an issue connected to the listing options.

The owners, also have homes in New York. I think CNH, is the model. They will move the HQ to a tax free location, and keep operational offices in BOTH Turin and Auburn Hills.

 

[jimboy]

There was also a report in the press this morning (either automotive news or autoblog), that Fiat could have considerable trouble financing a buyout of Chrysler along with the cost's associated to relaunch Alfa Romeo and Maserati's new line ups. Will Fiat have the cash or financing to do both, especially since they DON"T have access to Chryslers money yet.
It is predicted that Europe will remain flat in sales for the rest of the decade, which means Fiat development money has to come from elsewhere, either Brasil, China, NA, or Chrysler Group, if they can acquire it.

 

[Erik Latranyi]

As we know, there are many 'experts', 'analysts' and 'reporters' who like to spout off without knowing a damn thing.

There was also a report in the press this morning (either automotive news or autoblog), that Fiat could have considerable trouble financing a buyout of Chrysler along with the cost's associated to relaunch Alfa Romeo and Maserati's new line ups. Will Fiat have the cash or financing to do both, especially since they DON"T have access to Chryslers money yet.
It is predicted that Europe will remain flat in sales for the rest of the decade, which means Fiat development money has to come from elsewhere, either Brasil, China, NA, or Chrysler Group, if they can acquire it.

 

[dartndodge]

I'm sorry but your post is just a mess, it seems like you heard some rumors but didn't really take the time to understand.

Chrysler's cash cannot be used by Fiat thus Chrysler's profits are not propping up anything. As a matter of fact Fiat's share value is depressed despite good consolidated profits. And there's no such a thing as "money problems" since cash reserves at Fiat are pretty significant right now.

Im sorry, but perhaps you should read more news articles.

Chrysler is part of the "Fiat Group", so any profit it makes since the "takeover" is open for Fiat to use as it likes.
That is why companies "Takeover" others...to make money.

Fiat is sinking, Chrysler profits are keeping it afloat........atm.
No mystery, simple business. Nothing to do with cash reserves.
And if Fiat has "Cash reserves" as you claim, then they do not need to borrow extra funds....so why are they chasing money?

 

[Erik Latranyi]

No, you are wrong.

Go read the agreement.

Im sorry, but perhaps you should read more news articles.

Chrysler is part of the "Fiat Group", so any profit it makes since the "takeover" is open for Fiat to use as it likes.
That is why companies "Takeover" others...to make money.

Fiat is sinking, Chrysler profits are keeping it afloat........atm.
No mystery, simple business. Nothing to do with cash reserves.
And if Fiat has "Cash reserves" as you claim, then they do not need to borrow extra funds....so why are they chasing money?

 

[jazz77]

Im sorry, but perhaps you should read more news articles.

Chrysler is part of the "Fiat Group", so any profit it makes since the "takeover" is open for Fiat to use as it likes.
That is why companies "Takeover" others...to make money.

Fiat is sinking, Chrysler profits are keeping it afloat........atm.
No mystery, simple business. Nothing to do with cash reserves.
And if Fiat has "Cash reserves" as you claim, then they do not need to borrow extra funds....so why are they chasing money?

They need to borrow extra funds in order to keep the current level of liquidity, for the same reason some may apply for a mortgage even when they have enough money to buy their house.

As for the rest, provided no takeover happened yet and fiat didn't encounter any "money problems, your point is senseless.