The old Chrysler Corp. was rescued by a U.S. Treasury bailout and then purchased out of bankruptcy by Italy's Fiat SpA. That year more than one in four Chrysler dealers were losing money and car dealerships were closing like crazy.
Chrysler has since rolled out new vehicles like the Dodge Dart, streamlined manufacturing to reduce the number of platforms while increasing models, and expanded market share. Sergio Marchionne, the chief executive officer of both companies, would like Fiat to acquire the 41.5 percent of Chrysler it doesn't already own.
Marchionne envisions a fully merged Chrysler-Fiat taking on global leaders like Toyota and Volkswagen in addition to traditional rivals General Motors and Ford -- offering a full-range of vehicles from the subcompact Fiat 500 to supercharged Ram trucks.
Success has a cost.
Chrysler is making money -- $673 million January-through-June -- while Fiat, hit by economic shockwaves in Italy and flatlined sales in the rest of Europe, is not. Chrysler posted $1.6 billion in profit in 2012 on revenues of $66 billion.
The UAW Retiree Medical Benefits Trust -- known as a VEBA for voluntary employees' beneficiary association -- a United Auto Worker entity that controls the minority stake in Chrysler, said it thinks an IPO can bring in billions more than Fiat can afford to pay.
Chrysler Group filed for the initial public offering Monday. On Tuesday, Standard & Poor's Ratings Services kept its B+ credit rating and said Chrysler's outlook remains positive.
"Fiat has informed us that it is evaluating the various potential impacts that a public offering and the consequential introduction of public stockholders may have on its views of the Fiat-Chrysler alliance, and as such, is considering whether or not to continue expanding the Fiat-Chrysler alliance beyond its existing contractual commitments, Chrysler said in its nearly 400-page filing.
"If Fiat becomes unwilling to work with us beyond the scope of its existing contractual obligations, there may be a material adverse effect on our business prospects, financial condition and results of operations."
In the lengthy IPO filing, Chrysler estimates the value of the company at $8.9 billion. The filing also indicated the company wants to build a new so-called "cute-ute" to compete in the popular small crossover utility market segment -- but is keeping details close to its vest.
Chrysler was last traded publicly in 1998, when it became DaimlerChrysler after it was acquired by Germany's Daimler AG.
Success also has not come without growing pains.
Chrysler recently delayed production of the all-new, reintroduced Jeep Cherokee because of problems with its nine-speed transmission.
The Detroit News said workers at the Toledo Assembly Complex in Ohio, where the 2014 Cherokee is built, said Jeeps have been rolling off the line with issues involving the German-designed transmission. Five-hundred second shift workers at the plant have been temporarily laid off for a possible two weeks while engineers work to fix the problem.
The new Cherokee replaces the slow-selling Jeep Liberty. It was supposed to reach dealer showrooms in July, but was delayed by quality problems. Chrysler is hoping for September deliveries.
"We have been producing vehicles since the end of June and have now built the critical number of vehicles we need to stock dealerships once containment is released," a Chrysler spokesman said in a statement.
Detroit woos resurgent GM
Beleaguered Detroit is trying its best to keep good-paying jobs from exiting the rust-belt region.
The City Council voted 5-1 Tuesday to approve a 12-year tax break for GM if it builds two logistics centers at its assembly plant in suburban Hamtramck, Mich.
The tax break, which would help create 165 construction jobs and 210 permanent jobs, is worth nearly $600,000 over a dozen years, the Detroit News said, and was proposed one day after GM announced a $4.5 billion debt offering to buy back preferred stock.
Some 260 million GM preferred shares have been held by the United Auto Workers Medical Benefits Trust since the 2009 federal bailout of GM and depending on the market they could be worth as much as $6.5 billion.
The News said GM wants to buy back around $3.2 billion in preferred shares and use $1.2 billion to repay in full and four years early a loan from the Canadian Auto Workers Union Health Care Trust.
"We're taking advantage of a favorable market to lower our cost of capital, increase our financial flexibility and further strengthen our fortress balance sheet," Dan Ammann, GM's chief financial officer, said in a statement.
The logistics centers would keep the Detroit-Hamtramck Assembly Plant competitive and help ensure the jobs of 1,600 workers who assemble the Chevrolet Malibu, Impala, the gas-electric hybrid Volt and the Opel Ampera.
Alfa Romeo 4C introduction delayed, again
American motorists looking for a limited-production luxury Italian roadster will to wait awhile longer.
Fiat and Chrysler CEO Sergio Marchionne had hoped to bring the all-new Alfa Romeo 4C sports car to the United States this summer, but Fiat said the two-seater won't hit U.S. showrooms until mid-2014.
Alfa Romeo left the U.S. market in 1995 when Fiat ended operations in the United States. It was never a big seller in the United States and the sporty mid-engine, rear-wheel drive 4C won't change that. Only about 500 will be available for enthusiasts and it's expected to have a starting price north of $55,000.
The U.S. model will use lots of aluminum and carbon fiber to keep weight to around 2,200 pounds and the car will have an Italian-built, turbocharged 1.8-liter, four-cylinder engine cranking out 240 horsepower. The 4C would go against rivals like the Porsche Cayman and Lotus Exige S, which start at $70,000.
Timing couldn't be better, however. CNBC says U.S. luxury vehicle sales are nearly 14 percent higher this year, nearly double the increase in overall car sales.
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