Fiat CEO sees 50 percent chance of Chrysler IPO, prefers buyout
By Bernie Woodall
KOKOMO, Indiana (Reuters) - Sergio Marchionne, the chief executive of both Fiat and its majority-owned Chrysler Group LLC unit, said he sees a 50 percent chance that Chrysler will go public but would prefer that it be fully merged with Fiat.
Fiat shares ownership in the smallest U.S. automaker with a retiree trust fund affiliated with the United Auto Workers labor union. Marchionne said he would prefer that Italian automaker Fiat buy the trust fund's holdings.
"My preference is to be one single company," Marchionne told reporters in Kokomo, Indiana, on Thursday. "We belong together."
Over the last four years, the two automakers have been blending their operations as Fiat has increased its stake in Chrysler, said Marchionne, who has been CEO of both companies since Chrysler emerged from bankruptcy in 2009.
Fiat, however, has been odds with the trust fund over Chrysler's worth. The fund is under pressure to squeeze as much value as possible from its Chrysler holding to pay for medical benefits.
Marchionne was speaking at a plant in Kokomo, Indiana, where Chrysler announced it would invest $374 million in four Indiana plants to support production of its more fuel-efficient eight- and nine-speed transmissions by the end of the year.
The move will create up to 1,250 jobs in Indiana, including as many as 850 jobs at the company's new Tipton Transmission Plant, Chrysler said on Thursday.
Chrysler is spending $162 million to make a nine-speed transmission at Tipton. Production at Tipton is expected to start in the first quarter of 2014.
About $212 million will be invested in the Kokomo Transmission, Kokomo Casting and Indiana Transmission I plants to make the eight- and nine-speed transmissions. The money will be used to install additional tooling and equipment needed to make Chrysler's eight- and nine-speed transmissions by the fourth quarter of 2013.
(Reporting By Bernie Woodall in Kokomo, Indiana; Editing by Gerald E. McCormick, Sofina Mirza-Reid and Leslie Adler)
© Thomson Reuters 2017 All rights reserved.