Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Fiat Doesn’t Need Access to Chrysler’s Cash, CEO Says

Fiat SpA, the Italian automaker planning to merge with Chrysler Group LLC, doesn’t need access to its U.S. partner’s cash, which currently has limits on its use, the chief executive officer of both companies said.

“There will have to be no covenants on the debt structure that exists within Chrysler, and I think we have to get over 80 percent of Chrysler” ownership for Fiat, CEO Sergio Marchionne told reporters yesterday at a press conference in Detroit. “I don’t think Fiat needs it.”

Chrysler accepted restrictions on its cash when refinancing loans from the U.S. and Canadian governments. Marchionne, 60, has said he plans to merge Chrysler with Fiat by 2015. The ability of Fiat, which owns 58.5 percent of Chrysler, to buy the rest is limited by a turnaround plan that the Turin, Italy-based company announced last month, the executive has said.

Fiat is in a court dispute with Auburn Hills, Michigan-based Chrysler’s minority shareholder regarding the price that it has to pay to boost its ownership to almost 62 percent. The United Auto Workers’ retiree health-care trust has said Fiat must pay at least $342 million for the holding, more than double the $139.7 million that Fiat has said that it owes.

Fiat sued Sept. 26 in Delaware Chancery Court to confirm the price that it has to pay. The voluntary employee beneficiary association, known as VEBA, responded in a Nov. 13 filing.

Judge’s Decision

“We read the agreement in a way; they read it in another,” Marchionne said yesterday. “Let the judge decide.”

The court may rule on the matter by the end of the year, the CEO said on Fiat’s Oct. 30 quarterly conference call.

As part of Chrysler’s 2009 bankruptcy, Fiat was granted call options to purchase a portion of the VEBA’s stake every six months beginning earlier this year through June 2016. The agreement covered 40 percent of the trust’s holdings.

Fiat reported 20 billion euros ($25.6 billion) of available liquidity at the end of the third quarter, down from 22.7 billion euros as of June 30.

Fiat presented a plan last month to turn around its European operations, which are generating wider losses and caused the automaker to cut its 2014 profit goal by 31 percent to 5.2 billion euros. Other automakers in Europe, including PSA Peugeot Citroen, Ford Motor Co. and General Motors Co.’s Opel unit, also are struggling as industrywide vehicle sales in the region head for the biggest annual decline in 19 years.

“If you look at the collective losses that we have, that Ford has, that GM has and that Peugeot has in the European arena, the correction is enough to choke a horse,” Marchionne told reporters yesterday. “There’s a point in time in which the cash runs out.”

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.