AUBURN HILLS, Mich. – Within three weeks Chrysler will once again be a European company.
Italian automaker Fiat has cleared the last major hurdle to completing its acquisition of the Auburn Hills carmaker by striking a $4.35 billion deal in the new year.
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Since 2009 Fiat has methodically combined engineering and vehicle platforms. This allows the company to pool Chrysler cash with Fiat to finish the integration. Fiat may add its name to the building but the Chrysler name and identity in Auburn Hills isn't going anywhere.
It is unclear where the company will plant its global headquarters -- Milan, Italy, Auburn Hills or somewhere else. In terms of impact: Titles aside, this facility will continue to dominate in North America.
"One of the assets Fiat wants is Chrysler's vast knowledge base and expertise and that is housed in Auburn Hills. I don't see that changing. It would turn it upside down for no reason," said Stephanie Brinley, IHS Automotive analyst.
Fiat is paying the UAW health care trust fund $3.65B for the remaining 41 percent of the company the union holds. The union converts its stock to cash it needs to pay health care claims for 117,000 retirees and families.
One trust official called it the best outcome possible -- less than they wanted but higher than the original offer.
Chrysler, Dodge, Jeep and Ram brands will remain unchanged but will see the addition of models from Fiat's Lancia brand or other global product.
Those with bitter memories of Chrysler's so-called merger of equals with Daimler recall how the German company drained cash from Chrysler, leaving it weakened and eventually bankrupt. It's still a risk but Fiat needs a healthy Chrysler more than Daimler did.
"Cash for new products.. to reach the scale to become globally competitive. The difference between Daimler-Chrysler and Fiat, Sergio Marchionne is already combining operations and engineering to a greater degree than Daimler ever did," said Brinley.
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