Labor leaders at Fiat Group will hold a meeting with top officials of the United Auto Workers union next week as part of efforts to break a stalemate over the carmaker’s bid to merge with Chrysler Group. Chrysler-Fiat chief executive Sergio Marchionne is being compelled by VEBA, a UAW retiree health-care trust, to get ready for Chrysler’s initial public offering after the two sides remain in dispute over the value of the shares owned by the fund.
Chrysler filed for an IPO on Sept. 23, 2013. Fiat holds 58.5 percent of Chrysler while VEBA owns the remaining 41.5 percent. Ferdinando Uliano, Fim Cisl national secretary in charge of Fiat relations, remarked that they are worried that an IPO “would harm” the merger of the two carmakers." He said that they will tell the UAW that only a merger of Fiat and Chrysler would “grant a positive future for both companies' workers."
He said that a Fim Cisl delegation will hold a meeting with UAW leaders, including President Bob King, in Detroit. Uliano will be part of the delegation. Marchionne has been trying to combine Fiat and Chrysler to create a global carmaker large enough to rival Toyota Motor Corp., General Motors Co. and Volkswagen Group.
VEBA is asking for at least $1 billion more than what Fiat wants to pay. Fiat has said that an IPO may place the carmakers’ relationship at risk. Once Fiat fully acquires Chrysler, it could fully tap the US carmaker's $12 billion in cash to help finance its turnaround in Europe. Fiat posted a 3-percent drop in sales in Europe in September, despite the region logging a 5.5 percent surge in the month.