By Bob Blandeburgo
Supreme Court Justice Ruth Bader Ginsburg halted the sale on Monday to study appeals by Indiana pension funds and consumer group opponents. On Tuesday, the court ruled the appeals didn't meet the legal standard for an emergency stoppage of the deal, Bloomberg News reported.
The deal gives Chrysler access to Fiat's technology, platforms and power-trains for small- and mid-sized cars. Such access means a likely line of more environmentally friendly cars from Chrysler, which is known for its larger, fuel-hungry vehicles such as the Jeep Cherokee and the Dodge Grand Caravan. The Associated Press reports
Fiat Chief Executive Officer Sergio Marchionne will take on the same role in the new company, now called Chrysler Group LLC.
"Those Chrysler operations assumed by the new company that were idled during this process will soon be back up and running, and work is already underway on developing new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler's hallmark going forward," Marchionne said.
Fiat has a tattered history in the United States and will have a lot to prove when its cars appear at U.S. dealerships, which could be as soon as 18 months.
Fiat will own 20% of Chrysler initially, and could expand that stake by an additional 15% if it meets certain operational milestones. It cannot obtain a majority state until Chrysler repays the money it borrowed from the Treasury's Troubled Asset Relief Program (TARP). The United Auto Workers (UAW) Retiree Medical Benefits Trust will own 55% of Chrysler, while the United States and Canadian governments will own a combined 10%.
Chrysler expects to name C. Robert Kidder, chairman and CEO of private investment firm , as its chairman. Three board directors will be appointed by Fiat, four by the U.S. government, one by the Canadian government, and one by the UAW.
News and Related Story Links:
- Bloomberg News:
Fiat Buys Chrysler, Forms Six-Largest Carmaker
- The Associated Press:
- Money Morning:
For Auto-Sector Investors, Ford Truly is the "Better Idea"