Saturday, May 28, 2011

Fiat to buy remaining U.S. stake in Chrysler

Chrysler is on a faster track to shed all U.S. government ownership by June 10 -- exactly two years after it emerged from bankruptcy.

Fiat said Friday that it has asked to buy the U.S. Treasury's remaining 6% stake in Chrysler.

The Canadian government owns 1.7% of the Auburn Hills automaker.

"This is great news for Chrysler. ... It obviously gives us more autonomy to move forward," said Alfred Flores, a Chrysler dealer in Houston and head of the company's national dealer council.

Fiat and the U.S. Treasury will negotiate a price. If they don't reach an agreement by June 10, they agreed to accept the average of two estimates set by investment banks, Fiat said in a statement.

Fiat's announcement came a week before President Barack Obama is to visit a Chrysler plant in Toledo next Friday.

By buying the government's remaining shares, Fiat would boost its Chrysler stake to 52%, up from 46%. Fiat and Chrysler need each other and this deal will strengthen the alliance, said longtime auto analyst Maryann Keller.

"Neither one has the ability to compete alone in the kind of global environment that they face," Keller said.


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