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Fiat To Pay $3.65 Billion For Remaining Chrysler Shares

Italian automaker Fiat SpA announced Wednesday that it reached an agreement to acquire the remaining shares of Chrysler for $3.65 billion in payments to a union-controlled trust fund. Fiat already owns 58.5 percent of Chrysler's shares, with the remaining 41.5 percent held by a United Auto Workers union trust fund that pays health care bills for retirees. Under the deal, Fiat will make an initial payment of $1.9 billion to the fund, plus an additional $1.75 billion upon closing the deal. Chrysler will also make additional payments totaling $700 million to the fund as part of an agreement with the UAW. The deal is expected to close on or before Jan. 20, according to a statement from Chrysler. Sergio Marchionne, CEO of both Fiat and Chrysler, has long sought to acquire the union's shares in order to combine the two companies. "The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization," Marchionne said in a statement issued by Turin, Italy-based Fiat. The deal eliminates the need for an initial public offering of the union fund's stake, which analysts had previously valued at $5.6 billion. Fiat went to court last year seeking a judgment on the price, but the trial date was set for next September. Marchionne can't spend Chrysler's cash on Fiat's operations unless the companies merge. In recent months he made it clear that he preferred to settle the dispute without an IPO, but filed the paperwork for the offering in September at the trust's request. Chrysler's profits have helped prop up Fiat on the balance sheet as the Italian automaker struggles in a down European market. The Auburn Hills, Mich., automaker earned $464 million in the third quarter on U.S. sales of the Ram pickup and Jeep Grand Cherokee, its ninth-straight profitable quarter. The results boosted Fiat, which earned $260 million in the quarter. Without Chrysler's contribution, Fiat would have lost $340 million. UAW/Unions Chrysler Fiat

2017 Chrysler Pacifica will start at $29,590

Early reports suggested the 2017 Chrysler Pacifica would be more expensive than the outgoing model, but that's not entirely the case. The new minivan's base LX trim starts at $29,590 (after $995 destination) versus $30,990 for the 2016 Town & Country. The latest vehicle's prices are also in line with its competitors. All Pacificas have amenities like Active Noise Cancellation and the model's famous Stow 'n Go seats. For $31,490, customers can upgrade to the Touring trim to get SiriusXM satellite radio, power sliding doors, and automatic headlights. The Touring-L adds a little more luxury for $35,490 with features like rear parking assist, blind spot monitoring, and leather seats, which are heated for the front row. The Touring-L Plus at $38,80 includes even more useful items like a seven-inch driver display, 8.4-inch Uconnect infotainment system, heated steering wheel, heated second-row seats, and an upgraded stereo. The top of the Pacifica range is the Limited trim for $43,490, which piles on even more luxuries to haul the family around in style. The amenities include Nappa leather, ventilated front seats, an integrated vacuum, 3D navigation, HID headlights, LED foglights, panoramic sunroof, and hands-free doors and liftgate. It seems perfect for a road trip. Compared to the competition, the Pacifica has good fuel economy and similar pricing (all of which include destination). For example, the 2016 Honda Odyssey starts at $30,300 and can go up to $45,775 for the top Touring Elite model. The situation is similar with the Toyota Sienna, which ranges between $29,750 and $46,170 for the most expensive two-wheel drive version. The rapidly aging Nissan Quest starts out cheaper at $27,480 but tops out at $44,130. However, the Kia Sedona is significantly cheaper than the Pacifica, starting at $27,295 and going to $40,795 for the highest trim. The only potential downside to the Pacifica's pricing is FCA's discontinuation of the Dodge Grand Caravan. The model started at just $23,090 and topped out at $31,990, which gave the automaker a range of less expensive trims to lure price conscious customers. The company has lost that market advantage. We look forward to spending more time with the 2017 Pacifica when it arrives at dealers this spring. The Hybrid joins the lineup in the second half of the year.

Government Ending Jeep Investigation

The government is closing its investigation into older-model Jeeps with fuel tanks that could rupture and cause fires. The National Highway Traffic Safety Administration said Friday it has "no reservations" with Chrysler Group's plans to recall the vehicles. The agency is expected to release a report on its investigation in a few weeks. The decision ends an unusually public struggle between Chrysler and NHTSA. The agency asked Chrysler to recall 2.7 million Jeeps last June, contending that their gas tanks - which are positioned behind the rear axle - were at risk of rupturing and catching fire in rear-end crashes. Involved were Grand Cherokee SUVs from the 1993 to 2004 model years and Liberty SUVs from 2002 to 2007. Chrysler initially refused to recall the vehicles. The company said the rate of fuel leaks and fires after crashes was similar to comparable vehicles that were sold during the time in question. It was the first time in two years that an automaker had refused NHTSA's request for a recall. Chrysler later agreed to recall 1.56 million of the Jeeps and install trailer hitches on them to help protect the gas tanks. The company sent notices to the remaining customers saying their vehicles were fine if they have factory-installed or Chrysler-made trailer hitches. NHTSA said late Friday that it has been in close contact with Chrysler and will monitor the recall as it continues. Chrysler has told customers that it will start installing the hitches soon. "Consumers should have their vehicles serviced promptly once they receive final notification from Chrysler,"NHTSA said in a statement. In its own statement Friday, Chrysler said, "We share NHTSA's commitment to safety." NHTSA's outgoing chief, David Strickland, told The Associated Press in an interview last month that Chrysler had convinced NHTSA that the Jeeps were no more dangerous than similar vehicles sold at that time. "Those vehicles performed at a rate similar to their peers. That is the keystone analysis as to whether something poses an unreasonable risk to safety," Strickland said. Friday was Strickland's last day at NHTSA. He is joining Venable, a law firm. NHTSA began investigating the Jeeps at the request of the Center for Auto Safety, a Washington-based advocacy group. "It is tragic that NHTSA approved Chrysler's sham trailer hitch recall for Jeeps that explode in rear impacts," the Center for Auto Safety's director, Clarence Ditlow, said Friday.