ITALY/US: Fiat hikes Chrysler stake to 58.5%
Fiat SpA has boosted its ownership of Chrysler Group to 58.5% from 53.5% after achieving the last of three performance-related milestones agreed with the Obama administration in the US.
Under a provision of its 10 June, 2009 operating agreement, Chrysler recently wrote to to the US Department of the Treasury confirming it was "irrevocably committed to begin assembly of a vehicle [the Alfa Romeo Giulietta-based Dodge Dart] with an unadjusted combined fuel economy of at least 40 mpg in commercial quantities in a production facility located in the United States".
That triggered an automatic 5% increase in Fiat's Chrysler holdings and the Italian automaker now holds 58.5% with the balance owned by the United Auto Workers (UAW) VEBA benefits trust fund.
A pre-production Dart achieved an unadjusted combined rating of 40 mpg in official US government fuel economy tests, Chrysler said. The four-door compact sedan will be built in Belvidere, Illinois after making its public debut at the Detroit show next week.
This is the fifth time in the last year Fiat has increased its ownership in Chrysler.
In June 2009, It took a 20% stake in exchange for sharing intellectual property and other resources. Fiat announced a boost to 25% on 10 Janauary 2011 after Chrysler received government approval to begin commercial production of the Fiat-designed Fully Integrated Robotised Engine (FIRE) in Dundee, Michigan.
On 12 April, Fiat’s ownership rose to 30% after Chrysler reached cumulative revenue of over US$1.5bn from sales made outside NAFTA and inked distribution agreements in Brazil and Europe, as well as a technology-use agreement.
After paying back its US and Canadian government loans in full last 24 May, six years early, Fiat exercised a call option to increase its Chrysler stake 16% to 46%.
On 21 July, Fiat said it had paid $500m to purchase the treasury’s remaining 6% stake in Chrysler and $125m to but the Canadian governments' remaining 1.5%, taking its holding to 53.5%.