Does Ron Burgundy Know That Chrysler’s Now an Italian Car Company?

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Raymond Boyd / Michael Ochs Archives / Getty Images

2013 Dodge Dart

America just got itself a new Italian automobile company: Chrysler. Fiat agreed to buy the 41.46% of Chrysler shares held by a United Auto Workers (UAW) union’s health care trust for $3.65 billion in cash plus $700 million in future payments for a total of $4.365 billion. It gives Fiat 100% ownership of the U.S. auto company and completes Fiat CEO Sergio Marchionne’s grand strategy to combine the two companies into a more competitive global automaker. Benvenuto, Fiat-Chrysler.

The agreement ends a somewhat testy negotiation with the health care VEBA (as in voluntary employees’ beneficiary association), which took the Chrysler shares as part of the White House–negotiated deal to keep Chrysler afloat in the depths of the recession and allowed Chrysler to avoid billions of dollars in future retiree health care obligations. But now that Chrysler is the picture of health — the company earned $464 million on revenue of $17.6 billion in its last quarter ­— the VEBA wanted to cash out.

Although analysts valued the VEBA’s shares as high as $5 billion, Marchionne tried to play hardball, telling the trust that Fiat might pull back from its operating alliance with Chrysler, which called for the two companies to integrate their business plans this year. That seemed like more of a scare tactic, since the level of integration was already so deep at the management level that undoing it would have harmed both companies. The VEBA responded by forcing Chrysler to file for an IPO for the shares. That had risks for the trust, because the market might not have valued the company as highly as the VEBA did.

As happens in many negotiations, the VEBA took guaranteed if slightly less cash today rather than risk the vicissitudes of market, especially given the run-up in share prices in 2013. Chrysler will pony up $1.9 billion — it has that kind of money on hand — while Fiat will chip in $1.75 billion. The rest of the money is being paid as part of a revised labor agreement with the UAW that will provide future funding for the VEBA. Crowed Marchionne: “In the life of every major organization and its people, there are defining moments that go down in the history books. For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments.”

The deal gives Marchionne the opportunity to make Fiat-Chrysler a fully integrated global automobile company with a full lineup of vehicles, from Fiat’s tiny 500 to Chrysler’s monster Ram pickups. More important, it allows Fiat to complete the implementation of its world-class manufacturing programs across Chrysler’s operations — something the union agreed to as part of the deal. UAW workers build the Dodge Dart, for instance, which is based on a Fiat-owned Alfa Romeo platform. The company wants to be able to benchmark cars like the Dart with similar products worldwide to continually improve quality and efficiency. For Marchionne, it means that Fiat-Chrysler finally has something it was sorely lacking: a global manufacturing base with enough volume to drive costs down. Fiat and Chrysler are already sharing some platforms and parts, but Marchionne wants nothing less than to make his company a global powerhouse on the order of Volkswagen or Toyota. It gives new meaning to Chrysler’s slogan, Imported from Detroit.

56 comments
dale330
dale330

Would it still be an Italian company if headquarters moved to the U.S., or would it stay an American company? I read an article yesterday that Mr. Marchionne is considering moving headquarters to Detroit because of the strong U.S. sales market as opposed to the economic crisis in Europe. I've also read where he is considering the Netherlands for headquarters for tax purposes, but being listed on the NYSE.

EarlHickey
EarlHickey

just think what would have happened if chrysler had not been bailed out.  they would have gone out of business, broken up and bought up by a foreign carmaker

Maserati123
Maserati123

Calm down guys,now we have Ferrari,Maserati,Dodge,Alfa Romeo,Chrysler,Jeep,Mopar,SRT,and Fiat all in one company.They will all get better with Ferrari Alfa Romeo and Maserati leading the way forward.And this will not be like by the VW group.

Maserati123
Maserati123

I am very happy that Fiat was able to close this deal,this is just
an awesome way to start the new year for Chrysler's employees,and
Fiat's employees all around the world.I hope this means that Alfa Romeo
will be coming to the USA very soon.I already have my deposit for a red
4C with tan interior.Congratulation Fiat and Chrysler on this great
achievement.I am sure the VW group of companies will not like this,also
Ford and GM,but who cares.I will continue to support
Chrysler,Ferrari,Maserati,
Fiat,Jeep,Dodge,Alfa Romeo and what ever vehicles they produce.

CharlesLowe
CharlesLowe

I am very happy that Fiat was able to close this deal,this is just
an awesome way to start the new year for Chrysler's employees,and
Fiat's employees all around the world.I hope this means that Alfa Romeo
will be coming to the USA very soon.I already have my deposit for a red
4C with tan interior.Congratulation Fiat and Chrysler on this great
achievement.I am sure the VW group of companies will not like this,also
Ford and GM,but who cares.I will continue to support
Chrysler,Ferrari,Maserati,
Fiat,Jeep,Dodge,Alfa Romeo and what ever vehicles they produce.

incognito
incognito

I see many Americans complaining about this. The fact is that American automakers were blinded with ethnocentrism. Except for a few exceptions, they were not able to implement global strategies to appeal a broad range of customers all around the World. I hope Fiat will help to boost Chrysler and save this brand.

Tula_Dalmatina
Tula_Dalmatina

Apparently FIAT has just bought Chrysler, maybe it's true, but unfortunately for us Italians, FIAT has been becoming more and more American in recent years; think of the FIAT factories in Italy getting closed. Ironically, the last "Italian" descendant of the Agnelli family, currently Chairman of Fiat, was born in New York, and - what a case! - was givenl "Italian" names (John Philip Jacob). So what?  F.I.A.T. = Former Italian Automaker Turin, and R.I.P. Italian industry. Amen.

krw1943
krw1943

Does this now mean that the Italian taxpayer will have to bail them out if they go south? Hope so. 

11B_INF_Retired
11B_INF_Retired

In a year or two almost all the American Chrysler employees will be out of a job.  And Chrysler will go like the Studebaker and American Motors.   Thanks Chrysler and the Union for selling out another American car company for a quick profit. 

chipmano
chipmano

Cannot believe there are so many people on here against this massive deal that makes them the 7th biggest car maker in the world. You have short memories and should remember Chrysler would have gone the same way as our Rover company did in the UK. Nobody wanted Chrysler in 2009, nobody was willing to take on all of the sleeping giant and try and turn it around. Had FIAT not made the move it did, Chrysler like Rover would have been shut down with couple of its product lines being picked up for next to nothing. Rover had the Mini, BMW took that with them when they gave away the company to asset strippers. The asset strippers who called themselves a management buyout sold everything and rented back buildings without investing in the company and eventually it folded. Range Rover got bought by an Indian company China bought the blue prints to what was current designs. The factories are bulldozed the jobs gone forever.

Now, let me know, if we can go back in time, would you like to swap with us in the UK. You can have the total annihilation of Chrysler, we have FIAT ROVER that is creating tens of thousands of jobs locally?

brenro12
brenro12

Great. An Italian car company hemorrhaging money buys an American car company circling the drain. Makes perfect sense.

guardianne
guardianne

will you sign for my petition of declare war on france to be against business of god(god is white no yellow and boudha)?

RB1
RB1

Dear "JohnS" yes there is lots of blame to go around for the progressive collapse of America!  I know that we have done immense trade with many countries that attacked the USA in the past. Yes, the auto industry is but one avenue of the wide range of the selling of America.

As far as the Knox case goes, yes their is much politics involved with that, but how do you explain the huge demonstrations by mobs of Italians protesting America and Americans, not just Knox!

JohnS
JohnS

@RB1 & Open-
A little more history here. Ex-GM backbencher, Bob Eaton sold out Chrysler to the Mercedes high command, making it a German company. After looting the company for 9 years, they sold it out Canadian stripper-flippers, who gutted the company. The DA feds didn't know what to do with what was left, so they gave it to FIAT. They recognized it as a cash cow if run halfway competently, which would save FIAT from their fat cat socialist unions & politicians.
      In case you forgot, the Romans & later Italians, killed thousands in the name of the religion du jour, including Muslims during the Crusades. People have had no problem buying Japanese & German cars from the very companies that rained destruction & death on millions during WWII. The Knox case is just a textbook example of an out of control, lying prosecutor that should be disbarred. You might also throw in their religious slant on that case too.


    Don't blame JUST the Republicans for giving away our manufacturing sector. BOTH parties and their Presidents greatly contributed to the establishment of a service economy flipping burgers & bedpans!


RB1
RB1

Well "Openminded1" you seem rather lacking in real open-mindedness in your very verbal attack against a religious group called "Islam!"  I'd say your the REAL MORON for your vicious verbal attack against millions of innocent Muslims that are not involved with violence. I'd say MORON that you owe a lot of people a very loud and sincere apology!  

Oh, you also seemed to have circumvented the issue of the college girl that spent years in jail, then was cleared and is now being tried again. Seems Italian's like to persecute American's for as many years as they can! That appears to be very vindictive! Sounds a lot like you! Are you of Italian heritage? I'd wager from your near violent response that you are! 

I believe that Italy changed sides during WW 2 about the time that they realized that they were pretty well whipped!

chipmano
chipmano

@Tula_Dalmatina As i said i i followed this story before it even began IE when Marchionne took the helm of FIAT. This deal now means not only Chrysler benefiting from a much bigger scale of economies, but FIAT can invest in the new Alpha Romeo line up and Maserati line up that he wants to make in Italy using up the spare capacity in underused factories. These will be premium products to compete with Audi and BMW that will be made for export. Without this deal not only would Chrysler suffer, but Alpha Romeo was being eyed up by VW who wanted it and would have done to that what they did with Lamborghini. I.E. made it a luxury line that benefits VW not FIAT Chrysler.

11B_INF_Retired
11B_INF_Retired

@chipmano 

Give Fiat-Chrysler two years and Fiat will dump Chrysler!  For many of us remember how bad Fiat was back in the 1960s and 70s...

RB1
RB1

@RB1 So many italians defending italians, yet I see no italians defending anyone other than italians. This is what I have seen throughout my lifetime from such self-centered people that are convinced that the world evolves around themselves!!!!!!!!!!!!

Oh by the way it has been proven over and over again that columbus didn't discover america first!!!

billymm
billymm

@RB1 are you of german descent? if so did you forgot that America fought also against Germany during the ww2 and not onlyItaly? did America changed side? LOL

billymm
billymm

@RB1 and don't forgot that America was discovered by Columbus and America got the name from another Italian amerigo vespucci

billymm
billymm

@RB1

from Italy


about oj simpson, casey Anthony, Zimmerman? and did you ever heard of Cavalese cable car disaster (1998)

? check on yahoo "Cavalese cable car disaster (1998) Wikipedia"


Fiat own Ferrari and Maserati that both did the record of sales %. Ferrari was also named the most powerful brand in the world 2013. check on yahoo "Ferrari rated world's most powerful brand ahead of Apple"



also are you aware that Italians are the FOURTH largest European ancestry in America. all of this people below have an Italian ancestry by mom, dad or both parents

Nicolas cage, john Travolta, Leonardo di caprio, Robert de niro, al pacino, Bradley coopers, kayle cuoco, paris Hilton, bruce springsteen, Madonna, lady gaga, Lindsay lohan, hayden panettiere and many many others

Openminded1
Openminded1

@JohnS How long ago was that dummy, today we are in 2014 and Muslims are the killers religious fanatics of  this century.

loopyduck
loopyduck

@JohnS  

>In case you forgot, the Romans & later Italians, killed thousands in the name of the religion du jour, including Muslims during the Crusades.


And in case YOU forgot, Americans killed tens of thousands of Native Americans, forcibly resettled many more, and occupied millions of acres of land in the name of Manifest Destiny. This all occurred a few centuries more recently than the Crusades; has that stopped you from buying American cars? If not, what was your point?

Openminded1
Openminded1

@RB1 My post name is meant to be ironic,I owe no one an apology most of all no f-ing muslims. You can not trust them moron. They do not wear name tags stating I am a nice Muslim and or I am a killer muslim. So common sense dictates do not trust any Muslim. You do know dummy the Boston brothers where Muslim, all their neighbors liked them and they had the neighbors fooled just like you a naive dummy. So kiss my ass with your apology bs.

Openminded1
Openminded1

@RB1 I am black moron, and muslims are no dam good period. All you have to do dummy is read media stories from around the world it is Muslims killing people everywhere. Not Italians. They did switch sides because they new the germans were wipped. Mussolini was the problem he did what he thought was best for Italy. the italians did what they thought was best to him, you know the results of that. The italain culture is one of the great cultures of the world in many ways. do your history research. They are ego maniacs i give that one. but so are we americans with alot less culture.

jerry48
jerry48

@RB1 : at least the college girl is free ! does Guatanamo ring a bell ? US has the biggest jail population in the world ! tell us about death penalty in the US ? Some of those being executed never had a chance to be tried again !

Italians persecuting americans ????? that's a funny one !

" attack against a religous group " : who invaded Iraq and Afghanistan calling it a Crusade ??

what country has white supremacist groups, Aryan nation, KKK, 33000 gangs, the Wesboro baptist Church etc...NUFF SAID !

jerry48
jerry48

 : " Ford continued to do business with Nazi Germany, including the manufacture of war materiel. Beginning in 1940, with the requisitioning of between 100 and 200 French POWs to work as slave laborers, Ford-Werke contravened Article 31 of the 1929 Geneva Convention. At that time, which was before the U.S. entered the War and still had full diplomatic relations with Nazi Germany, Ford-Werke was under the control of the Ford Motor Company. The number of slave laborers grew as the war expanded although Wallace made it clear that companies in Germany were not required by the Nazi authorities to use slave laborers."

billymm
billymm

@RB1


From italy

Italy during the ww2 was divided north with Mussolini and south against him


North Italians never changed side, are the Sicilians and the southern Italians that fought against north Italians and Mussolini. Check on yahoo "ITALIAN CIVIL WAR WIKIPEDIA"



Openminded1
Openminded1

@11B_INF_Retired @chipmano 60's and 70's , many companies where bad and some where good, just like now in 2014. the fact remains moron fiat is still alive and the italian govt did not have to bail them out  to stay alive. i would rather see it remain an American company, but at least its an Italian company not The Govt of China taking it over or a Korean company.

chipmano
chipmano

@11B_INF_Retired. You really are too pessimistic of this deal. FIAT are fully integrating with Chrysler, unlike Daimler who considered them inferior and paid the price for such short sighted views. Regardless of your views of FIAT in the 60's its now HALF A CENTURY later. The world has moved on. That same company weathered the storm, improved and built up. It owns Ferrari, Maserati and now Chrysler along with other brands such as Alpha Romeo, they are not an asset stripping investment firm turning a quick buck.

Openminded1
Openminded1

@RB1 Not proven, speculated and most of the history books say it was Columbus.

JohnS
JohnS

Open-m & L-duck    I did NOT forget about the first nations people. That isn't pursuant to the discussion. It is not like they don't buy American & foreign cars. Christianity has killed more in the name of the Lord than most if not all religions. They are much better now that they are over the Reformation & religious wars of the 16h & 17th centuries. The radical muslims just need to get out of the 1500s & into the 21st century. Of course that ignores the Middle East & Pacific RIng areas...

RB1
RB1

@billymm @RB1 Why do the history books say that America invaded and overtook Italy. Italy was defeated by American forces, not by Italian forces! You can keep slagging your self-righteous slop at people but real Americans know who kicked butt in Italy!

RB1
RB1

@billymm @RB1 since you seem to be defending openminded1 then what is your defense of that bigot that slanders people of different religions?  My experiences in 60 years is that all italians will defend each other (unless money involved) but seldom for another nationality or race! So are you also a hater of any other religion and those that follow????? your such a defender of him.  

Openminded1
Openminded1

@RB1 @billymm Why not because they are not black or not muslim maybe. You sound like you were scorned by an Italian woman or maybe a man. Whats the matter you do not like Pasta?

JohnS
JohnS

@Openminded1@JohnS

Your handle is a misnomer. All of the Muslims I have met are not. Which ones have you met? Your name calling is juvenile & adds little to the discussion except vitriol.

Openminded1
Openminded1

@JohnS Bottom line Muslims are religious fanatics and killers and no dam good. none of them can be trusted. 

Openminded1
Openminded1

@RB1 @billymm Dummy I am a vietnam veteran who loves his country , but the fact remains the Italians with many faults still have a great culture. grow up moron facts are facts. it does mot matter who's butt we beat, we still deal with germany do we not and japan.