Wall St veteran leads UAW trust in fight with Fiat over Chrysler

Wed Sep 18, 2013 7:40pm EDT
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By Deepa Seetharaman and Jennifer Clark

DETROIT (Reuters) - Sergio Marchionne, the chief executive of automakers Fiat and Chrysler, is well-known as a tough and shrewd negotiator. But he may have met his match in Alain Lebec.

The French-born investment banker is a key adviser to a United Auto Workers healthcare trust fund that assumed a stake in Chrysler after the Obama administration's bankruptcy restructuring of the U.S. automaker in 2009.

Just how the trust maneuvers its exit from Chrysler is one of the unresolved issues from bankruptcy. Lebec aims to get largest payout possible for its 41.5 percent stake, the proceeds of which must be used to fund medical benefits for current and future blue-collar Chrysler retirees over the coming decades.

Marchionne, for his part, is eager for Fiat, the parent and majority shareholder of Chrysler, to buy out the trust's shares at a much lower price. Their long-running tug-of-war will intensify in Chrysler's expected initial public offering filing by the end of the month.

Steering the trust through this complex situation is yet another high-stakes role for Lebec. The low-key, 40-year veteran of Wall Street orchestrated some of the most significant telecommunications deals of the 1990s while at Merrill Lynch. He also advised General Motors Corp (GM.N: Quote) during that time.

That Chrysler's IPO is going forward - over Marchionne's strenuous objections - demonstrates Lebec's outsized influence over the future of Fiat-Chrysler and the timing of Marchionne's plan to merge the two companies fully.

Lebec's negotiating stance is strengthened by the UAW trust's stronger-than-expected financial condition and an unusual provision in the bankruptcy deal that gives the trust the power maximize its returns by forcing Chrysler to go public.

"Sergio's plans are of zero interest to him," said Maryann Keller, managing director of auto consulting firm Maryann Keller & Associates. "The only thing that matters to him -- and should matter to him - is how much money am I getting for my shares?"   Continued...

Fiat Chief Executive Sergio Marchionne poses during a visit at the carmaker's Sevelsud plant in Atessa, central Italy, July 9, 2013. REUTERS/Remo Casilli