Two years after emerging from reorganization bankruptcy and being sold to Fiat, Chrysler is posed to deepen integration with the Italian automaker that now owns a 46% stake in the company.
In 2009, Fiat took over Chrysler with the purchase of a 20% stake. The move was motivated by Fiat’s desire to acquire small car and cleaner engine technology as well as management expertise from Chrysler.
Since then, Fiat’s stake has steadily grown after meeting U. S. Treasury-set performance benchmarks, paying $7.6 billion money transfer to the U. S. and Canadian governments, and after paying an additional $1.2 billion for a further 16 percent stake in Chrysler.
Fiat has options to increase its stake in Chrysler to 70 percent after reaching another Treasury-set benchmark and by purchasing the remaining stake held by the U. S. and Canadian governments, as well as the autoworkers' union pension fund trust.
The two companies’ CEO, Sergio Marchionne also marked a milestone in Fiat-Chrysler integration on Wednesday when he announced that the balance sheets of both carmakers would be consolidated next week.
However, Marchionne acknowledged that questions still remain about how to organize the corporate structures of both companies.
"I think the ability to maintain two separate corporate organs for the purposes of managing a mass market producer is nonsense. We need to find a solution going forward", Marchionne said.