Chrysler IPO in 2012 'Unlikely'

Chrysler IPO in 2012 'Unlikely'

At an auto-industry conference in northern Michigan today, Fiat S.p.A. CEO Sergio Marchionne said an initial public offering for Chrysler Group LLC – now majority owned by Fiat – is “unlikely” even in 2012, although until recent months it was speculated Chrysler might attempt a return to public ownership by the end of this year. As Fiat has acquired a majority stake in Chrysler and the two companies deepen their operating partnership - and the U.S. stock market again recedes - it now appears the urgency for a Chrysler IPO has cooled.

Marchionne did say, however, that a Chrysler IPO remains an almost inevitable outcome. The United Auto Workers union’s Voluntary Employee Benefit Association (VEBA) currently owns 45.7 percent of Chrysler and the retiree health-care and benefit trust fund is certain to seek to monetize its investment in Chrysler in order to secure long-term funding for the VEBA. The amount the UAW could derive from a sale of its Chrysler stake was capped at $4.5 billion in the 2009 bailout negotiations with the U.S. Department of Treasury, but there is an allowance for the cap to rise by 9 percent annually.

AutoObserver Staff:  The best in the business.