Fiat Removes All UAW Ownership of the Chrysler Group with a Full Buyout

The Chrysler Group has announced that parent company Fiat SpA will buy the remaining 41% from the UAW VEBA Trust for roughly $4.35 billion US dollars – thus removing all UAW ownership of the automaker and preventing Fiat from going an initial public offering in order to acquire the rest of the company.

On December 30th, 2013, Fiat SpA owned about 59% of the Chrysler Group while the other 41% was owned by the UAW VEBA Trust – a healthcare program for members of the United Autoworkers Union. Fiat had been in talks with the UAW to purchase that other 41% over the past year but with things seemingly going stale and no real news of progress, it was widely believed that the UAW would eventually force the Chrysler Group to go through the process of an initial public offering (IPO). An IPO would allow Fiat to buy up more of the Chrysler Group but they would have to do so via the public market and that would force them to essentially compete with the rest of the investing world. It seemed less than ideal but that appeared to be the direction that things were headed – until the Chrysler Group issued a statement proclaiming that Fiat SpA and the UAW VEBA Trust leaders had come to an agreement in which the Italian automaker will purchase the final 41% of the Chrysler Group from the UAW fund.
The cost of buying 41% of the Chrysler Group for Fiat? A whopping $4.35 billion US dollars.

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Comments

So if I understood Poppy Harlow on Cable News today, this means that the company we call Chrysler is now officially an Italian company, right? And this John Varvatos guy who pushes the 300 as "Imported from Detroit" is really selling car made in Canada by a European company? Am I wrong? More importantly, how did such a (pretty) young gal become such an expert on cars?

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