By Jennifer Clark
MILAN Jan 30 Fiat SpA Chief Executive
Sergio Marchionne said the Italian automaker would like to see
the minority holder of U.S. affiliate Chrysler Group LLC sell
out as soon as possible.
"The faster we do it, the better it is. It's up to them," he
said, referring to a United Auto Workers union retiree
healthcare trust called VEBA that owns 41 percent of Chrysler.
Earlier this month, VEBA asked Chrysler to register 16.6
percent of its Chrysler shares for a future public offering,
setting the stage for the third-largest U.S. automaker to trade
on the stock market again for the first time since 2007, when it
was a unit of Germany's Daimler AG.
Marchionne said on Wednesday he would be "more than happy"
to work toward making any future IPO a success, adding however
he would prefer for Fiat to buy VEBA's stake in Chrysler.
Marchionne has said in the past that Fiat would like to buy the
rest of Chrysler.
Fiat owns 58.5 percent of Chrysler.
The trust needs to pay medical benefits to 121,624 retired
Chrysler workers and their families plus some 40,000 more in the
future, according to figures provided by VEBA.
As part of Chrysler's 2009 bankruptcy agreement, retired
Chrysler workers exchanged about $7 billion of health care and
life insurance liabilities for a stake in the collapsed company
plus a promissory note for $4.8 billion.
The United Auto Workers (UAW) union is keen to see Chrysler
hold an IPO, UAW Vice President and Director General Holiefield
told Reuters in a recent interview.
"I would love to see Chrysler go public again," he said.
"The VEBA has to have the proper amount of funding to provide
healthcare for our retirees."
Holiefield and Marchionne worked together to produce the
2009 agreement that led to Chrysler's present turnaround, each
taking on risk along with U.S. and Canadian taxpayers.
The healthcare trust's stake -- worthless when Chrysler
exited bankruptcy -- could now be worth billions of dollars.
Investment bank UBS has estimated Chrysler's market value at
about $9 billion based on trading multiples for competitors Ford
Motor Co and General Motors.
VEBA had a funding deficit of $5 billion at the end of 2011,
a report from UBS in November showed.
Marchionne said the question of when and how VEBA could
trade its Chrysler stake for the funds it needs to pay retiree
health care is "fundamentally a question of price."
"I will tell you the secret - it's called cash," he said.
Fiat and VEBA are at odds over the value of VEBA's stake,
and are trying to settle the matter in a Delaware court. Fiat
has offered $139.7 million for a 3.3 percent stake that VEBA
says is worth $342 million.