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Trust That Owns 41.5% of Chrysler Faces Funding Shortfall
The United Auto Workers union trust that holds a 41.5% stake in Chrysler Group LLC faces about €2.2 billion in unfunded retiree benefit obligations, Bloomberg News reports.
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The United Auto Workers union trust that holds a 41.5% stake in Chrysler Group LLC faces about €2.2 billion in unfunded retiree benefit obligations, Bloomberg News reports.
The trust provides healthcare coverage for about 61,200 Chrysler retirees. It hopes to cover its shortfall and more by selling its equity in the company, either directly to Fiat SpA or through an initial public offering.
The trust estimates its Chrysler stake is worth about €3.7 billion. Fiat, which already owns 58.5% of the carmaker, has the legal right to demand a sale for €4.4 billion but reportedly is offering no more than €2.9 billion.
Fiat-Chrysler CEO Sergio Marchionne has been trying for years to fully merge the two companies, in part to gain access to Chrysler's €8.9 billion in cash, Bloomberg notes.
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