A will to do now that fiat is going to own the rest of chrysler, and it looks as though the deal will be completed in the next few weeks.
Yes, it is what has been working toward for almost five years, since he took chrysler off the hands of the u.s. government as part of the bailout and government finance banker see restructuring, let them integrate the operations a little more concretely then already, the guy was ceo of both companies.
What it really does, the big price of this is to let and get the crash -- the cash that chrysler has an user to reinvest in fiat while the european auto market is really at a bottom, try to kickstart that, and then really execute globally.
Jamie, this is a great deal for fiat.
Oh, it is a very good deal.
I would say that the uaw trust, which had almost no leverage at all, they cannot strike, they cannot -- they had almost no leverage all.
They try to get a value for their retirees, for their members, you know, they were trying to find billions of dollars in retiree health care liability from a bankrupt dump me.
They have got billions to go toward that, probably some concessions down the road.
He got the company for very little cash.
It really expands the reach of fiat on all the technology and the brands they have their in europe.
They could have forced an ipo.
This is the threat -- i would argue that they wasted time and money in trying to force the ipo to begin with because sergio marchionne wanted to give them $4 billion from the start.
Now what happens -- he gives them 4.3 5 billion dollars, and the majority of that money coming from chrysler.
-- $4.35 billion.
Managing that everybody knew what happened -- the original offer -- how the banks get paid as a little unclear to me.
They must have -- they knew this was a very high likelihood and must have a factor that into their equation.
$4 billion was not sergio marchionne's initial offer, so they did get an increase quite a bit over time.
Really, chrysler becomes more valuable as the key is generating cash, but they need money to pay their bills, and this worked out for everybody, even if it is only 10% more.
That is $400 million that can go toward a lot, by a lot of -- one of my favorite parts of the deals is that 700,000 will be paid over years.
They're getting less than $4 billion now and by 2018, they will get the rest of that $4.35 billion.
So it depends on what you think about the present value of money.
The best thing is really for the whole company, they will be able to invest $12 billion on as jamie said, he in the italian plants as other european manufacturers in europe are just a shutting down plans as quickly as they possibly can.
Plus, he is going to be able to do things like old maseratis on these platforms.
He is going to be able to import more -- well, start importing alfa romeos into the u.s. he is going to be able to offer more models come and that is what chrysler -- that is what the whole company needs to do but that is especially what chrysler needs to do.
Jamie, how competitive can a unified fiat chrysler be against a volkswagen or general motors, the other two global auto companies that come to mind?
On a global scale, they are still way behind gm, volkswagen, and toyota.
Those are really the global big three, the big automakers reached continent.
They are about half the size of those companies.
But they're going to ultimately get to those sizes, they will need a third or fourth partner.
Sergio marchionne originally came in saying they needed to be in top five.
To really compete at scale, get through the ups and downs of the global economy.
You start thinking they will need something with more asia focus, they need more into china, which they are working on through jeep already, but the southeast asia, a lot of big markets where they are really behind.
All right, jamie, good to see you this morning.
That is bloomberg's jamie butters and detroit, matt miller here in new york city, looking ahead to fiat's full ownership of chrysler.
Turning from detroit to d.c. were the senate may vote to
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