The ownership increase was triggered when Fiat achieved the second of three “performance events” outlined in the 2009 operating agreement, each of which allows Fiat to increase ownership in Chrysler by five percent. In January 2011, the company was able to increase its stake from 20 to 25 percent by equipping a Dundee, Michigan engine plant to build Fiat’s Fully Integrated Robotized Engine (FIRE), which is used in the U.S.-spec Fiat 500.
The second performance event, achieved in the last few weeks, required Chrysler to record over $1.5 billion in revenues from countries outside North America since June 2009, and to enter an agreement to sell Chrysler vehicles in 90 percent of Fiat dealers in Brazil and Europe. The Fiat Freemont — otherwise known as the Dodge Journey — will be sold in Brazil, while a number of Chrysler products will be sold as Lancias in Europe (the 300 will be sold as the Thema, while the 200 will adopt the Flavia name).
The third and final performance event, which would see Fiat’s ownership of Chrysler climb to 35 percent, requires Chrysler to build a Fiat-based vehicle in the U.S. that achieves at least 40 mpg. The Wall Street Journal believes the U.S. introduction of the Fiat 500 will satisfy that requirement, although we can’t help but notice the car is estimated to reach 38 mpg on the highway.
The U.S. Treasury still owns an 8.6-percent share of Chrysler, and the Canadian government holds 2.2 percent, while the United Auto Workers still maintain a 59.2-percent stake. According to the WSJ, Fiat could stand to increase its ownership by another 16 percent — for a total 51-percent stake — when any government-backed loans are paid back. Fiat CEO Sergio Marchionne reportedly plans for Chrysler to repay those loans by the end of this year.
via Chrysler, The Wall Street Journal courtesy of Automobile Magazine Staff