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Fiat-Chrysler alliance in jeopardy due to Pentastar's IPO filing?

The four-year relationship between Fiat and Chrysler has thus far been beneficial for both automakers, but it has also proven to be a complicated battle between Sergio Marchionne and the United Auto Workers - the latter controlling the remaining 41.5 percent of Chrysler. With the recent filing for a US IPO, it looks like Marchionne and the UAW appear to be playing a billion-dollar game of chicken, with both sides far apart on how much the union's shares are worth. If it comes down to Chrysler's remaining stake being publicly traded, it could act to drive a wedge between the two companies.
According to Bloomberg, Fiat's chairman John Elkann says "if the IPO will take place, there will be two companies, and that's different than having a single one." Now, we're not great at math, but this sounds like the complete opposite of the full merger that Marchionne has been pushing for since taking the helm at Chrysler. Bloomberg notes that the UAW's shares should be worth around $5.6 billion, but Fiat could end up paying as little as $4.9 billion for Fiat to gain full control of Chrysler. A story by The Detroit News points out that Marchionne's "alleged low-balling" is just the latest hurdle the Auburn Hills-based automaker must overcome as its ownership is being fought over for the fourth time in 15 years.

UAW reveals more details for tentative FCA deal

Around 40,000 union workers employed by Fiat Chrysler Automobiles have a new proposed contract to vote for or against just about a week after soundly rejecting a previous proposal. Like the contract that was rejected, this new proposal was negotiated between union leadership and management at FCA. If workers vote this time to accept the contract, negotiations are likely to begin in earnest with the other two big American automakers, Ford and General Motors. The biggest sticking points that kept the previous contract proposal from being ratified revolved around so-called second-tier UAW workers. Under the rejected contract, there wasn't a clear path in place that would bring these newer hires into wage parity with first-tier workers. The newly proposed contract, however, would have second-tier employees earning around $29 per hour – the same as first-tier workers – after eight years of employment. A slightly revised profit-sharing plan is also included, as is a larger signing bonus for first-tier workers. Gone from the new contract proposal is a health-care cooperative that would combine workers from all three Detroit-based automakers into one pool. While this action had the potential to lower health-care costs for UAW members, it wasn't universally understood by rank-and-file workers, said UAW President Dennis Williams. "I was a little naive," he said. "I really thought everyone understood it. It is my fault. I should have educated people more on it. And so we did take it out of the agreement." If ratified, this new contract will go into effect immediately and will cover a four-year period. Over that course of time, the UAW expects FCA to increase its employment figures by a little more than 100 workers, according to reports. Additional details on the contract can be seen on the UAW's website here. News Source: The Detroit News, The Detroit Free Press, United Auto Workers (PDF)Image Credit: Jeff Kowalsky/Bloomberg via Getty Earnings/Financials Hirings/Firings/Layoffs UAW/Unions Chrysler Fiat FCA

Move over Audi, now Chrysler has a beef with Tesla's claims

In the same week that Audi said "not so fast" to some claims from Tesla, Chrysler has responded to a new press release from the California-based EV-maker by saying "not exactly, Tesla." The statement, released through the company's blog, comes in response to Tesla claiming it was "the only American car company to have fully repaid the government." Chrysler notes that it, too, recently paid back Uncle Sam from its 2008 bailout. Similar to Audi's recent press release, which was eventually and mysteriously deleted from the German automaker's site, Chrysler is both right and wrong in its statement.
Tesla specifically said that it had paid back the Department of Energy loans that many automakers received - including Fisker and VPG Autos - while Chrysler's retort argues Tesla is "unmistakably incorrect" since it repaid the government in 2011 a full six years early. Technically, the statements from both automakers are correct, but Tesla's startup loan originated from the DoE, while Chrysler's loan came in bailout form from the Troubled Asset Relief Program (TARP). Further, as The Detroit News notes, Chrysler's loan still cost taxpayers well over a billion dollars after all was said and done - those negative assets tied to "old Chrysler" in the bankruptcy did not require repayment.