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Fiat has been in a big, fat hurry to increase its stake in Chrysler, as the Italian automaker has managed to increase ownership from 20 percent to 30 percent so far this year. A report out of Automotive News Europe (via Italian newspaper Corriere della Sera) shows that the stakes may raise once again by June of 2011.

From the onset, the first goal for Fiat has been to hit 35 percent ownership by the end of 2011, but sources tell AN that CEO Sergio Marchionne and his team are now aiming for 46 percent this summer. To hit that number, the automaker will need to pay down U.S. and Canadian government debt from the original $7.4 billion to under $4 billion. On Monday, Marchionne reportedly said that Fiat planned to speak with banks in an effort to refinance the loans. Earlier in the year, Marchionne referred to the government loans as "shyster loans," which, though he later apologized, tells us everything we need to know about the CEO's motivation.

As part of that agreement, Fiat has the option to pay down $1.14 billion in debt by the end of 2011, while waiting until next year will effectively raise the rate to $1.37 billion. That translates to a 20-percent interest rate for the year, which is high for a credit card, much less a government loan.

The next step for Fiat is to achieve another five percent ownership in Chrysler by the end of 2011. To do this, the automaker will need to sell a 40+ mile per gallon Dodge (likely a rebadged Fiat) and sell it in the U.S.

[Source: Automotive News – sub. req. | Image: Massimo Pinca/AP]

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    • 1 Second Ago
      • 4 Years Ago
      Ghadaffi would be proud.
      • 4 Years Ago
      Even at 46%, which is huge, Fiat will still not have a majority stake. And people were already calling Chrysler "Italian owned?"
        • 4 Years Ago
        You don't really need a majority to be in control.
        If I own 40% and three other people each own 20% then they all have to agree to override my decision on anything.

        But with chrysler it is many more than three people owning all those other percents I think.

        So as a practical matter you can effectively control a company with much less than actual majority ownership.

        Still - to be sure, 51% plus is best for easy sleeping.
      • 4 Years Ago
      Or they'll re-badge a 2011 Alfa Romeo Giulietta and sell if for the 40mpg Fiat. Alfa Romeo. Italian hot car. Do it, Fiat.

      Sell the Alfa Romeo instead.
      • 4 Years Ago
      There are no rebadged Fiats coming to the U.S as a Dodge.
      The 40-mpg car is the Caliber replacement, which will ride on the Fiat/Chrysler C-EVO platform, and it was likely be powered by a Fiat engine, or a revamped World Engine. It will be the first car with the new 9-Speed Automatic transmission.