Chrysler and Fiat Spin Their Wheels

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Sept. 26 (Bloomberg) -- On today's "Global Outlook," Matt Miller reports on Chrysler and Fiat getting a "divorce." He speaks on Bloomberg Television's "Street Smart." (Source: Bloomberg)

" on bloomberg television.

A fascinating story, who better to tell us than car grew room matt miller.

I just want to give you and our viewers a heads-up that this will be happening the entire fall, probably christmas and beyond.

It is basically a price negotiation.

The ceo of fiat is also the ceo of chrysler.

He is trying to finish his purchase of chrysler.

There's just 40% left out there that a union trust owns.

He wants to pay less than $5 billion for that.

The union trust one $6 billion, and he says forget about it, however you say that in italian.

The union has said we have in the contract the ability to force an ipo and we will do that to value the shares that would hold, so you have to pay up.

He doesn't want that.

He needs full control of chrysler as the head of fiat in order to do what he wants.

They have $12 billion in cash.

They also have the sales that he doesn't have.

The full companies more complete as one.

What you are going to see all fall is, he cannot say anything because he has a fiduciary duty to this union.

But the chairman of fiat, who is a very interesting figure in his own right, said today that the two companies will function separately if there is an ipo, and fiat will have to reevaluate its relationship with chrysler.

They own 58%, how do you reevaluate your relationship?

He is basically saying, if you go through with an ipo, we're going to get rid of you.

The union is going to say, up through christmas, if you don't pay us what we want, we're going to force an ipo.

We will have stories about this every couple of weeks.

Eventually they will get to a price, probably about 5.5 billion dollars, and there won't be an ipo and there won't be a divorce.

But you are going to hear this soap opera storyline persist until the ipo schedule at the beginning of 2014. it will be very interesting and fun to follow.

I will bet you and italian beard that it ends exactly the way i said it would.

-- i will buy you an italian beer.

The battle lines are drawn on capitol hill over the budget of

This text has been automatically generated. It may not be 100% accurate.


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