Chrysler Group LLC announced Monday that it has paid $5 billion to a United Auto Workers trust and now has completed its plan to buy out the union.
“This transaction brings to a successful and earlier-than-anticipated conclusion the process that led the U.S. and Canadian governments, the UAW and the (UAW trust), together with Fiat, to take on the task of re-establishing Chrysler as a viable automotive enterprise,” Fiat Chrysler Automobiles CEO Sergio Marchionne said in a statement. “Fiat and Chrysler together have satisfied all the monetary commitments that were made to Chrysler in 2009. None remain outstanding.”
Chrysler made the announcement after closing a bond sale and using the proceeds to pay off a note the UAW trust received in 2009 as part of a bailout of the bankrupt Auburn Hills automaker brokered by Obama administration.
It means Italy’s Fiat SpA now has full control of Chrysler. It also means the UAW trust no longer has a financial stake in the company.
Fiat last month bought the 41.5 percent Chrysler stake held by the trust, which was created to pay medical bills for union retirees, to gain full control of the U.S. business. The combination creates the world’s seventh-largest auto manufacturer.
Marchionne, 61, wants to transform Fiat into a manufacturer with the scale to challenge the likes of General Motors Co. and Volkswagen AG. Fiat, which owned 58.5 percent of Chrysler prior to the full takeover, relies on the U.S. for profit because of losses in Europe amid a six-year car-market contraction in the region.
Fiat plans to move its primary listing to New York and rename itself Fiat Chrysler Automobiles NV. The manufacturer aims to complete the New York listing by Oct. 1 and will also continue to have shares traded on the Milan exchange.
Bloomberg News contributed.