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Breakingviews: Chrysler's $450 mln question

Wednesday, Oct 30, 2013 - 03:51

Oct 30 - Reynolds Holding and Antony Currie explain how Fiat and a union trust fund - the two owners of the Detroit automaker - are battling over a much smaller sum than overall valuations imply.

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-- Detroit auto results are out today Chrysler aren't included. They're fine but a more interesting story. This playing out behind the scenes -- -- dispute between Fiat and union's Chrysler and Anthony what the heck is going. Well this is being -- for some time now it's bull if all goes back to 2009. Beta remember right fear. Was given effective control. Pretty much for free of -- that by the US government. The union. Which end up getting just have a 40% of a company is how to -- outstanding health care lobbyists management and -- Is now fighting not trying get the best valuation camp for the stake for. Which which makes predecessor and makes perfect sense that -- to make sure it doesn't pay too much remember right fear is that makes the European automaker. And in the middle market as well which means it's been re suffering. Yeah across the obvious and tries -- best from best it's still nowhere near as it is sold in GM's hands of mountains and stuff but it's. Yes but it's almost five semis in in the circle. It's not meant considering that -- is -- you'll full listing was going into the guts so -- verified as everyone try to be raised the ball as -- legitimate at all in his right who's wrong initially Sobel it's surely going to be. She is the basis set him up you know and he's he's playing -- he's one eagle is great deal he's but he paid. Turf cup team big and also they say five rice to get 60% this company socially he's the one he's -- he's playing Koppel. And he may well be that he is but the sense I'm getting -- and actually he's played some pretty good office space animal the company may be worth and also what's in all these documents from four years ago is the union which really hasn't said anything between them we got back to the first time these two clashed with the middle of last year. And what Fiat is an absentee from the middle last year until 2016 is every six months. It could say we're gonna pay you. X amount based on certain formula for 3.3 percent of the company's at least six months it can -- of the treatment because it. And its valuation of the last it was coming put the company at less than four billion dollars which is. Less than half what it paid. The US government for its stake right a year -- and send it salute you with -- agreements in 2009. Which link what we pay in this peaceful chunks. To -- -- trading know how I was doing and truck and and the unions disputes that why are they being so difficult at the avenue Q -- well on the aren't just making a mountain out of a -- well enough when I was in these small increments I think this at that there is a decent fight to be had on both sides I think -- thing. These agreements in 2009 and crossing. That's not what those agreements mean -- think. A lot of people really look at this thing Q what this means there's a dispute between six billion dollars in violation because the union saying reality the valuation hit -- fears -- news of what might the union another -- pretty small -- -- -- to -- pieces of money. The team will -- trunks chunks we have each time increase netted. If you follow that through and think they'll increase that again in the next two and chunks there on out to buy. That means all these were fighting and it is 400 feet one million dollars which is it's -- a -- bit especially when you go to -- these these these health care benefits through but the remained what they union trust irons which is about -- of the company. Is not. Could be set by these agreements. And that's that's that's he's -- less contentious it's all about these 3.3 percent chunks -- at sixteen opposite. -- -- -- 42 point two million dollars considering the contentions around the IPO. And the numbers missing that much bigger than that it -- it because these guys on coming to some kind of inflation always interesting stuff coming out of Detroit will be following that story as well as others and you stay tuned for more breaking views tomorrow.

Breakingviews: Chrysler's $450 mln question

Wednesday, Oct 30, 2013 - 03:51

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