Published October 30, 2012
DETROIT – Sergio Marchionne, chief executive of both Fiat SpA and Chrysler Group LLC, said he wants to achieve "unification" of the two automakers by 2015.
"The objective has always been to try and bring unification by 2014 or 2015," Marchionne said on a conference call on Tuesday. "I'd still like to see that done."
How that comes about "has yet to be determined given the fact that our primary objective right now is that of fixing the European environment."
Marchionne made his comments as he addressed Fiat's plan to purchase the remaining 41.5 percent of Chrysler that it does not own. That stake is held by a United Auto Workers union healthcare trust for retired Chrysler workers, a voluntary employees beneficiary association.
Fiat has raised its ownership to 58.5 percent of Chrysler, up from the 20 percent share it took after the U.S. automaker's 2009 bankruptcy.
But Fiat must first bolster its financial position amid a sagging European economy, Marchionne said.
"It is clear that given Fiat's capital requirements and the availability of liquidity today," said Marchionne. "It is highly unlikely that we would be able to finance a takeout of the minority stake in Chrysler, unless something extraordinary happens and we find liquidity through other means."
Marchionne said the only commitment he can make now is that Fiat will press ahead with its plan to purchase 3.3 percent of Chrysler every six months by exercising a call option allowed in the 2009 bankruptcy agreement with the U.S. Treasury.
Fiat can buy up to 16.58 percent of Chrysler in this fashion, which could increase Fiat's stake in the Michigan-based automaker to about 75 percent.
Fiat sued the healthcare trust in September because the trust did not sell the 3.3 percent share in July as Fiat had filed for. The two sides differ on the price that Fiat is to pay for the increased share. Fiat offered $139.7 million.
Marchionne said on Tuesday that there was no update on the lawsuit.
The July call option was the first one to be exercised by Fiat. Marchionne has said Fiat plans to exercise another call option in January.
(Reporting by Bernie Woodall; Editing by Gary Hill and Tim Dobbyn)