Fiat announced that the company has added an additional 5% stake in U.S. automaker Chrysler. The U.S. Government had been the majority shareholder of Chrysler after its bailout of the auto giant in 2009. After the government funded the 2009 restructuring of Chrysler under bankruptcy protection, Fiat came calling. The government yielded a 20% stake to Fiat in exchange for the company’s strong management skills and use of its proprietary technology.
Since 2009, Fiat has gradually increased its amount of ownership by meeting performance goals and by continual purchases of shares from the government. The new stake that Fiat gained occurred after the pre-production version of a new compact car achieved 40mpg in testing. The new vehicle will be a modern version of the Dodge Dart and will be released for sale as a 2013 model.
The United Auto Workers trust fund still retains 41.5% of the Chrysler shares and may seek an IPO later this year to convert those shares into available cash to increase the fiscal coffers for the trust. The trust is responsible for paying retiree health care and benefits.
The Dart will be assembled in a factor in Belvidere, Illinois. Look for the Dart to be unveiled at the North American International Auto Show next Week in Detroit, Michigan.