It has been long time coming, but Italy’s Fiat has today officially taken majority control of Chrysler Group.
A further $500 million payment to the U.S. Treasury saw the Italian car maker extend its shareholding from 46 to 52 percent.
The takeover marks a historic day for Chrysler, a traditionally American brand that was formed in 1925. In 2009, amid the global financial crisis, Chrysler filed for bankruptcy and was partially sold to Fiat.
Barack Obama’s administration invested $12.5 billion to bail out the manufacturer and saw Fiat as a good partner to bring the iconic brand back to life. So far $11.2 billion of the money has been repaid, but the U.S. government believes that it’s “unlikely to fully recover the difference of $1.3 billion.”
Fiat’s boss Sergio Marchionne has set a rather ambitious target for his automotive empire (which also includes the likes of Alfa Romeo, Ferrari and Maserati) to sell 6.6 million vehicles annually by 2014. Last year saw the brand’s manage just 3.6 million sales.
The original deal with the U.S. Government was to encourage Fiat to meet sales and emission targets to gain more shares in Chrysler. Firstly, Fiat had to build a fuel-efficient engine in the U.S., which it did (Fiat 1.4-liter MultiAir engine being built in the Village of Dundee, Michigan). Secondly, it had to export $1.5 billion in Chrysler vehicles and open up Fiat dealerships to Chrysler products in Europe and Latin America (which it did by April).
The third and final goal (which will see Fiat receive a further five percent share holding) is to design a new Dodge that can manage 40mpg (5.88L/100km) which it has planned to do by year’s end.
As it stands today, the Canadian government owns 1.5 percent and United Auto Workers’ Voluntary Employee Beneficiary Association (VEBA) owns the remaining 41.5 percent of Chrysler.