[gibson]

FIAT and Chrysler are having a bit of a lovers quarrel right now... FIAT wants to buy the rest of Chrysler but the UAW holds the remaining shares and is attempting to extort some extra funds from FIAT for the residual.

In response to FIAT balking the UAW has decided to file Chrysler for IPO, making it even more difficult for FIAT to purchase the residual. In response to the response FIAT has said it can and will yank the plug on all current and future technology sharing...

From Reuters:

"Fiat has informed us that it is reconsidering the benefits and costs of further expanding its relationship with us," Chrysler said in its S-1 filing with the U.S. Securities and Exchange Commission.

Chrysler added that Fiat is also reconsidering the terms on which the Italian automaker will continue to share its technology, vehicle platforms, engineering expertise and other resources with Chrysler.

"Fiat is saying that Chrysler is worth less if we don't get that full integration," said Richard Hilgert, an analyst with investment research firm Morningstar. "It's a shot across the bow of the UAW."

The IPO prospectus warns that Fiat’s ultimate objective is to secure 100 per cent control of Chrysler and that a listing would “prevent or delay” Fiat from meeting that objective. It also points out that Fiat has publicly said it believes a public listing for Chrysler would hold up realisation of the benefits of the companies’ alliance, under which the two have shared technology and distribution networks to cut costs and boost sales.

Theres actually alot of very interesting business and psychological strategy going on here that would make a great discussion on its own, but we're here for Levante.

The Levante is slated to ride on the Jeep Grand Cherokees architecture, If FIAT pulls the plug on tech sharing I seriously doubt Chrysler is going to continue to offer up the GC platform as a parting gift. Not for anything but FIAT doesn't have a platform of their own for the Levante to ride on...

This has the potential to get ugly...

 

[Maverick]

I don't think that FIAT will actually stop their relationship with Chrysler. This is all posturing. The two sides will come to some type of settlement, and the Levante will get the green light. That is my prediction at least.

 

[gibson]

I don't think that FIAT will actually stop their relationship with Chrysler. This is all posturing. The two sides will come to some type of settlement, and the Levante will get the green light. That is my prediction at least.

Why not? FIAT has all the leverage here. They rescued Chrysler, their products have underpinned a product revolution at Chrysler... Now as they want to purchase the rest of Chrysler operations to mash together their balance sheets and ease cash strains the UAW (whose employees would be out of work if it wasnt for FIAT) is trying to play hardball....

FIAT understands that Chryslers shares are worthless without them. I'd pull the plug on Chrysler if i was getting tooled around by Union thugs. They think they're smart but not only are they the reason the auto makers were run into the ground in '08 but now that they are back to their old tricks I hope they run the rest of the industry into the ground and find unemployment an enjoyment...

 

[pitchfork]

politics. the #1 party pooper in the auto industry.

 

[Maverick]

I just can't see FIAT abandoning Chrysler when they obviously want to buy the whole thing. It is a bit of brinkmanship. Either FIAT will give into a few demands to get things moving again, or the union workers will give up once they realize that they will have no job if FIAT doesn't continue its relationship with Chrysler. It's kind of like the government shutdown situation. "Give into our demands or we will force you to shut down everything."

 

[gibson]

I just can't see FIAT abandoning Chrysler when they obviously want to buy the whole thing. It is a bit of brinkmanship. Either FIAT will give into a few demands to get things moving again, or the union workers will give up once they realize that they will have no job if FIAT doesn't continue its relationship with Chrysler. It's kind of like the government shutdown situation. "Give into our demands or we will force you to shut down everything."

Yes but what your missing is how motivated the UAW is to drive this to the brink? Did you follow the bankruptcy debacles in '08? The UAW had been commanding rising wages every year in the factories. Entry level first year workers with the UAW were commanding $28/hr to START, and thats not even what the senior high end guys were commanding, well over $50 in some cases.

The UAW was aware their wage demands were pushing profitability to the brink and they said tough... The Union doesn't care about corporate health, the unions number one concern is maximizing dollars to the union.

The UAW doensn't care if FIAT/Chrysler goes down they will just find work in another auto plant, the UAW reps them all...

 

[pitchfork]

not sure what Fiat wants with Chrysler to be honest.

What can Chrysler offer Fiat? Market entry into north america? someone fill me in here.

 

[gibson]

not sure what Fiat wants with Chrysler to be honest.

What can Chrysler offer Fiat? Market entry into north america? someone fill me in here.

CASH FLOW.

If Chrysler and the UAW go forward with the IPO it prevents FIAT from fully gaining control of Chrysler meaning FIAT misses out on full access to Chryslers cash flow and manufacturing efficiency.

Chrysler gives FIAT the ability to diversify the Alfa, FIAT and Maserati brands. Take the Levante for instance, without Chrysler influence there would be no platform for the Levante to ride on as it was borrowed from the Grand Cherokee.

They're both dying companies who need each other desperately for support. FIAT is flat broke, Chrysler has been funding most of FIATS operations recently, but Chrysler doesn't have any cash or modern products without FIAT donor parts. Its a very Toxic codependent relationship the two companies have built.

Should the marriage fall apart one will shrivel up slowly and one will implode immediately....

 

[mavante]

CASH FLOW.

If Chrysler and the UAW go forward with the IPO it prevents FIAT from fully gaining control of Chrysler meaning FIAT misses out on full access to Chryslers cash flow and manufacturing efficiency.

Chrysler gives FIAT the ability to diversify the Alfa, FIAT and Maserati brands. Take the Levante for instance, without Chrysler influence there would be no platform for the Levante to ride on as it was borrowed from the Grand Cherokee.

They're both dying companies who need each other desperately for support. FIAT is flat broke, Chrysler has been funding most of FIATS operations recently, but Chrysler doesn't have any cash or modern products without FIAT donor parts. Its a very Toxic codependent relationship the two companies have built.

Should the marriage fall apart one will shrivel up slowly and one will implode immediately....

Yeah these changes need to happen ASAP, if it doesn't it will slow and might even stop the production and delivery of some key cars. The Alfa Romeo 4C being one of them already on hold.

 

[St.Who]

I think that the UAW is pushing a bit too hard at this point. They should just be happy that there are still auto plant jobs left in the US. Their wages are already pretty good in most cases so I don't see the need to continue to force raises all the time.

At the same time, executives get huge salaries and bonuses each year, so its not like there isn't blame to spread.

 

[mavante]

I think that the UAW is pushing a bit too hard at this point. They should just be happy that there are still auto plant jobs left in the US. Their wages are already pretty good in most cases so I don't see the need to continue to force raises all the time.

At the same time, executives get huge salaries and bonuses each year, so its not like there isn't blame to spread.

about income, i bet if there was a report on their income it would cause a lot of people lower down to get mad. usually it's the greedy people at the top.

 

[gibson]

This has nothing to do with salaries and bonuses.. well not really. The UAW was gifted shares of Chrysler as compensation for missed benefits in '08. The company is essentially half owned by its workers.

to be honest I wonder if UAW is actually fearful FIAT will begin shipping thier jobs out...

 

[pitchfork]

CASH FLOW.

If Chrysler and the UAW go forward with the IPO it prevents FIAT from fully gaining control of Chrysler meaning FIAT misses out on full access to Chryslers cash flow and manufacturing efficiency.

Chrysler gives FIAT the ability to diversify the Alfa, FIAT and Maserati brands. Take the Levante for instance, without Chrysler influence there would be no platform for the Levante to ride on as it was borrowed from the Grand Cherokee.

They're both dying companies who need each other desperately for support. FIAT is flat broke, Chrysler has been funding most of FIATS operations recently, but Chrysler doesn't have any cash or modern products without FIAT donor parts. Its a very Toxic codependent relationship the two companies have built.

Should the marriage fall apart one will shrivel up slowly and one will implode immediately....

hm if thats the case they both need to straighten out their priorities and get their head out of their asses.

 

[St.Who]

If the UAW does own half of Chrysler it is a really good way to ensure that they can keep their jobs secure. This is probably part of the reason that FIAT wants to buy out their shares as well. It only makes sense then that the UAW wants something in exchange for the leverage that they currently have. What can workers ask for other than more money, i'm sure their benefits are already unimaginable.

 

[pitchfork]

so whats happening with the situation now?

 

[mavante]

there hasn't been an update yet from what I seen