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Chrysler Files for IPO

Stock offering follows failure to resolve dispute between Fiat and the UAW.

by on Sep.23, 2013

Fiat/Chrysler CEO Sergio Marchionne returns to the IPO alternative as his dispute with the UAW drags on.

Chrysler Group LLC is filing for an IPO, a step that Sergio Marchione, the CEO of both Chrysler and its Italian ally Fiat, had hoped to avoid.

The move is a step of last resort, the result of an ongoing dispute between Fiat, which owns a majority stake in the U.S. maker, and the union retirement health care trust that holds the remaining 41.5% stake in Chrysler. The two are currently battling in the Delaware courts over the value of the so-called VEBA’s holdings in the once-bankrupt American automaker.

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The specific price, as well as the number of shares to be auctioned off, have yet to be set.  JPMorgan will serve as the investment banker putting together the Initial Public Offering, which will see Chrysler traded publicly for the first time since it entered a “merger of equals” with Germany’s Daimler-Benz in 1998.

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Court May Decide Value of Chrysler Stock

Ruling next month could force a Chrysler IPO.

by on Feb.12, 2013

Fiat/Chrysler CEO Sergio Marchionne wants to wrap things up with UAW's VEBA as soon as possible.

With Fiat and the United Auto Workers Union unable to come to a compromise on the price of Chrysler stock, it’s going to be up to a judge to decide – a verdict that could be worth $100s of millions.

But the move could end an impasse that has prevented the Italian maker from moving ahead with its long-term goal of buying up more of its U.S. alliance partner. The court’s eventual ruling could also determine what happens if an when Chrysler stages a long-discussed initial public stock offering, or IPO.

Fiat is apparently reviewing financing options with banks to strengthen its balance sheet in preparation to buy out the minority stake in Chrysler Group LLC now held by the UAW’s  Voluntary Employee Benefit Trust or VEBA.

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Sergio Marchionne, Fiat and Chrysler chief executive officer, has held talks with banks to help pay for at least some of the 41.5% now controlled by the trust, which is responsible for the medical bills of Chrysler retirees. A final deal may take months, however, because Fiat and the trust disagree over the value of the shares.

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UAW Wants Chrysler to Sell Stock on Open Market

The union may force Chrysler into an IPO.

by on Jan.10, 2013

Chrysler CEO Sergio Marchionne shown here during an appearance with UAW President Bob King.

The trust fund that pays medical bills for Chrysler’s unionized retirees wants the automaker to put a value on its share by selling a relatively small block of Chrysler stock.

While General Motors, which also went through bankruptcy and a subsequent U.S. government bailout, took itself public in November 2010, Chrysler has so far avoided a long-discussed IPO.

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The United Auto Workers Union Retiree Medical Benefits Trust – often referred to as a VEBA — now owns 41.5% of Chrysler shares. It is asking Chrysler to start the process for an initial public stock offering. The trust wants the company to sell 16.6% of the stock owned by the trust so it can put a value on the shares.

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Chrysler Workers Get Early Bonus

Maker waives rules to honor worker “commitment.”

by on Dec.03, 2012

Chrysler CEO Sergio Marchionne with workers at the Belvedere (Illinois) Assembly Plant.

Chrysler workers are getting an unexpected holiday present. The automaker says it is paying a bonus they weren’t supposed to get until next year ahead of time.

Chrysler’s union-represented employees will receive the second half of the $3,500 ratification bonus they got for approving their latest contract on Dec. 21. Had Chrysler stuck to the original language in the contract it signed with the United Auto Workers union in 2011 workers would not have received payment until at least the first quarter of 2013.

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“This waiver of the four-quarter requirement is made in recognition of the tremendous contribution you have all made to the performance of our facilities and to the revival of Chrysler,” Sergio Marchionne, Chrysler Group Chairman and CEO, said in a letter to employees.

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UAW Gets Chrysler Board Seat

Perkins to represent union’s health care trust.

by on Jun.15, 2012

Chrysler CEO Sergio Marchionne welcomes two new board members - including one from the UAW.

CEO Sergio Marchionne has brought a representative of the United Auto Workers Union onto the Chrysler Group LLC board of directors.

The appointment of the UAW’s Eric Perkins comes at the request of a trust fund set up to cover the health care costs of retired unionized workers. The so-called VEBA currently holds a 41.5% stake in the smallest of the Detroit makers.

Perkins is the director of the UAW’s strategic research department, a non-elected position on the union’s professional staff, and his appointment to the nine-member Chrysler board was effective June 10, the maker said.

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The automaker has also appointed Ruth Simmons, the retiring president of Rhode Island’s prestigious Brown University, to the board replacing former Michigan governor James Blanchard who is stepping down at the end of his term.

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Chrysler Stock Offering on Indefinite Hold

“It’s not imminent,” says Marchionne.

by on Mar.07, 2012

The long-awaited Chrysler IPO isn't likely to happen anytime soon, cautions CEO Sergio Marchionne.

Analysts and potential investors who’ve been waiting for a Chrysler stock offering are going to have to keep waiting – possible for quite some time, the maker’s CEO is cautioning.

After Italian automaker Fiat effectively took control of the U.S. maker following its 2009 bankruptcy, Sergio Marchionne signaled he would stage an Initial Public Offering in relatively short order.  The IPO has since been pushed back repeatedly by Marchionne – CEO of both Fiat and Chrysler.

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In a Detroit radio interview, the Canadian-educated executive this week said he will not authorize the stock offering until the time is right.  In fact, he told an Italian newspaper last month, that Chrysler just might skip the IPO entirely.

“It’s not imminent,” Marchionne told Detroit talk station WJR when asked about when Chrysler might take itself public again.

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Chrysler Profit Triggers First Profit-Sharing Checks Since 2005.

CEO Marchionne reveals Chrysler earnings offset Fiat deficit.

by on Feb.02, 2012

Chrysler workers will get $1,500 profit-sharing checks - and stand to earn another $1,750 if the maker can deliver four consecutive quarterly profits.

Chrysler workers have a variety of reasons to be pleased about the maker’s improving fortunes. They’re not only seeing thousands of jobs added but receiving their first profit-sharing checks since 2005 as a result of the maker landing in the black for the first time since 1997.

Meanwhile, Sergio Marchionne, the CEO of both Chrysler and Fiat, said the U.S. makers positive net offset a deficit at its Italian rival, which has been hammered by the European financial crisis – which has been particularly severe in Italy.

Marchionne wrote to U.S. hourly employees – who negotiated an improved profit-sharing formula as part of last-year’s new contract with the United Auto Workers Union, advising them they would get an average $1,500 each.

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“This is a reward that you have earned,” Marchionne proclaimed. “Your efforts rewrote the history that so many naysayers had forecast,” he added, a reference to the many outside skeptics who argued in favor of shutting down Chrysler rather than approving the maker’s 2009 federal bailout.

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Chrysler Adding 1,100 Detroit Jobs to Build Jeep Grand Cherokee Diesel

Maker confirms plans to launch Dodge Viper, add 150 more jobs at reopened Connor plant.

by on Jan.06, 2012

Chrysler will add 1,100 jobs as it prepares to launch a diesel version of its popular Jeep Grand Cherokee.

Chrysler will add another 1,250 jobs at a pair of assembly plants in the Motor City, as it prepares to launch production of a diesel-powered version of the Jeep Grand Cherokee along with an all-new Dodge Viper sports car.

The biggest increase, involving 1,100 workers, will come with the addition of a third shift at the Jefferson North Assembly Plant, on Detroit’s east side.  Meanwhile, Chrysler will re-open its old Connor Avenue Assembly Plant, adding another 150 jobs.  The facility was closed prior to the maker’s 2009 bankruptcy when it stopped production of the old Dodge Viper.

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“Our future, like the history of our brands, is interwoven with the City of Detroit,” said Chrysler Group Chairman and CEO Sergio Marchionne.  “We believe that investing in Detroit is not only the right thing to do, but it is a smart thing to do as we work to write the next chapter in our shared history.”

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Marchionne Wants to Eliminate 2-Tier Wage Structure at Chrysler

“Economic disparity…cannot go on indefinitely.”

by on Oct.28, 2011

CEO Sergio Marchionne is signalling Chrysler must find a way to eliminate the 2-tier union wage structure.

Despite the significant cost savings it is bringing to the smallest of the domestic automakers, Chrysler CEO Sergio Marchionne signaled that the maker’s two-tier wage structure is something he plans to eliminate in the not-too-distant future.

About one in eight of Chrysler’s 26,000 union workers in the U.S. currently fall into the second tier, earning about half as much as more senior members of the United Auto Workers Union – a figure expected to grow to at least one in four by the time the newly ratified 4-year UAW contract expires in 2015, said Marchionne during a conference call.

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The union failed to eliminate the two-tier structure during its recent contract talks with Chrysler, General Motors and Ford, though it did win so-called “new hires” a modest increase of about $3 an hour in wages and some additional benefits.  But in an unexpected turn, Marchionne suggested that having multiple grades is “structurally undesirable.”

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Chrysler Claws Back into the Black

$212 mil profit reflects rising sales.

by on Oct.27, 2011

Third-quarter results were "totally in line" with Chrysler's plans, says CEO Sergio Marchionne.

Long struggling Chrysler is having a decidedly good week.  Just a day after getting word that its U.S. hourly workers have approved their new contract, the automaker is reporting it clawed back into the black during the third quarter with a $212 net profit.

The maker lost $84 million during the July – September quarter in 2010.  The black ink is the result of a sharp surge in demand for Chrysler products, with revenues for the latest quarter up 19% to $13.1 billion.

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“In the third quarter, Chrysler Group achieved increased sales and positive financial results, totally in line with the plan we laid out in November 2009. And in October, together with the United Auto Workers, we crafted a solid four-year contract that will support us in our growth plans and significantly reward our employees for their contribution to the revival of Chrysler,” said Sergio Marchionne, Chairman and CEO of both Chrysler LLC and its Italian partner, Fiat.

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