Chrysler-fiat Plans To Buy Their Government-owned Shares

By Author: Marty Vergel Baes
Total Articles: 413
Comment this article

Chrysler has recently paid the loans that they owe from the US and Canadian government. These loans were used by Chrysler to finance their production during those times when the company was in the brink of bankruptcy. Due to these loans, new car finders who prefer to purchase Chrysler-made vehicles have never run out of choices. In addition to this, most of the auto financing deals provided by Chrysler to its customers was not stopped.

However, Chrysler under the leadership of its CEO Sergio Marchionne is not yet satisfied in just paying these loans off. This is because three days after the loan payments were paid Chrysler-Fiat has announced that it is planning to purchase the shares that were will still owned by the US and Canadian treasury. This was probably the company’s strategy to gain full access of the opportunities that they could obtain from the rising demands for Chrysler and Fiat vehicles. Through the ownership of the majority of the company’s shares Marchionne could implement plans and policies with greater autonomy ...
... and this could also benefit every Chrysler car finder in areas where this car maker operates.

Chrysler executives who were given the task to negotiate with the US government officials regarding the purchase of shares have somehow been successful in getting what they want. The US government was somehow at ease with what the company is planning. This could be a good opportunity for Chrysler to retrieve the shares that they have lost during the 2009 economic crisis which struck almost all of the economic entities in US.

Chrysler has also issued the same offer to the Canadian government. The discussion between Chrysler-Fiat representatives as headed by the company’s CEO itself with the Canadian government happened afterwards. However, the Canadian government gave Marchionne a hard time. This is because, the Finance Minister from Canada Jim Flaherty denied the company with any right to purchase the shares that his government owns as of the present. This gave the Canadian government greater leverage in the negotiation. Due to this, Chrysler might be forced to purchase these shares at relatively higher prices. Given this, Chrysler might also need to spend more money to earn their lost shares back.