Sergio Marchionne, chief executive officer of both Fiat and Chrysler, is being forced by a UAW retiree health-care trust to prepare for a listing of the American company because the two sides are at odds on the value of shares held by the union fund.
“We are concerned that a Chrysler initial public offering would harm a combination of the two carmakers,” Ferdinando Uliano, Fim Cisl national secretary in charge of Fiat relations, said in a phone interview. “We’ll tell the UAW that only a merger of Fiat and Chrysler would grant a positive future for both companies’ workers.”
A Fim Cisl delegation will meet with UAW leaders, including President Bob King, in Detroit as part of a scheduled trip to consult with American counterparts, said Uliano, who will be part of the delegation. Turin-based Fiat owns 58.5 percent in Chrysler and the UAW trust the remaining 41.5 percent.
Marchionne has spent the past four years working to combine Fiat and Auburn Hills, Michigan-based Chrysler to create a global automaker with the scale to compete with Toyota Motor Corp. (7203), General Motors Co. (GM) and Volkswagen AG. (VOW)
Chrysler filed for an IPO on Sept. 23. Preparations for the stock sale may help resolve a dispute over the value of the trust’s stake. The union fund is seeking at least $1 billion more than Fiat wants to pay. The Italian company has said that going through with the IPO may put the manufacturers’ relationship at risk.
Fiat, which is fighting with the trust in court over the value of Chrysler shares, must wait almost a year for a trial after a judge set a September 2014 date to hear evidence. Delaware Chancery Court Judge Donald Parsons scheduled a five-day, non-jury trial to start Sept. 29.
Buying the trust’s holding in Chrysler would help Fiat gain access to the U.S. carmaker’s $12 billion in cash to help fund a turnaround in Europe, where the Italian company is losing money and market share. Fiat’s deliveries fell 3.4 percent in September in Europe, while new car sales in the region rose 5.5 percent, the most in more than two years.
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