Chrysler and Fiat CEO Sergio Marchionne said today that his long-term goal is for Fiat to acquire all of Chrysler in order to better manage the two companies as a single automaker.
"I am running ...one car company," Marchionne said today at a Chrysler engine plant in Detroit. "We are here to try and build value."
Fiat currently owns 58.5% of Chrysler. The remaining 41.5% is owned by the UAW Retiree Medical Benefits Trust.
Fiat wants to buy an additional 3.3% of Chrysler's shares from the trust but is embroiled in a lawsuit over the value of those shares.
Fiat has offered to pay $139.7 million. On Monday, the trust said it estimates the value to be $381 million in a court filing in Chancery court in the state of Delaware.
The trust, which wants to maximize the value of its Chrysler shares, has the right to initiate an initial public offering as early as January, Marchionne said today.
If that happens, Marchionne said, Fiat and Chrysler will cooperate with the trust and might. Marchionne said he would even be willing to buy Chrysler's shares on the open market.
In Europe, Fiat is losing money because of a deep recession and five consecutive years of declining industry sales. Analysts have suggested that Fiat needs to acquire all of Chrysler so it can use the Auburn Hills automaker's cash to fund Fiat's restructuring in Europe.
Marchionne said Thursday that isn't the reason for his desire to acquire the remainder of Chrysler and said there are restrictions in its loan agreements that prevent Chrysler from funding Fiat.
"We are very, very respectful of minority interests in the U.S. and there are firewalls for cash flow," Marchionne said. "When we borrowed The $7 billion last year, we borrowed it with the very clear understanding that we would segregrate cash and cash flow."
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