Last month, we brought you the latest news in a rather tenuous ordeal between Fiat and the United Auto Workers over the future of the Italian automaker's stake in Chrysler. The union contended that Fiat failed to make an adequate offer for the 3.3-percent stake that was sought. Fiat offered $139.7 million for the shares in July, which the UAW rejected.

We now have word of the union's counter offer of $342 million – more than double what Fiat proposed. According to Reuters, the entity in question is the UAW's healthcare trust, known as Voluntary Employee Beneficiary Association, or VEBA, which currently owns 41.5 percent of the American automaker. Fiat boss Sergio Marchionne has voiced his intent to eventually purchase the trust's full 41.5 percent stake in Chrysler as part of a long-term unification plan.

Following the initial offer from Fiat, the trust refused to sell the 3.3 percent share in July, which resulted in a lawsuit brought by Fiat. As part of this counteroffer, VEBA has brought a counter suit, as well as a statement claiming that the initial Fiat offer was "substantially below market value."

VEBA originated from the 2007 auto bailouts, in which retiree medical benefits were shed off into their own entity to facilitate restructuring of the automakers. Rather than taking cash to fund its restructuring, VEBA took the Chrysler stock, which is the center of this current conundrum. According to a spokesperson for the trust, "sale of the called shares at the price calculated by Fiat would constitute a transaction prohibited by federal law." At this time, neither the automaker, the trust, nor the Securities and Exchange Commission have commented on the proposed transaction.


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  • 43 Comments
      sinistro79
      • 2 Years Ago
      The only reason Chrysler has any value whatsoever is because Fiat controls them. What Marchionne needs to watch out for is giving too much $$$ to the union in benefits, salaries, etc. Right now it isn't even worth it for Fiat to build cars in Italy because the workers demand too much money. I'd hate to see the same thing happen with Chrysler. The union would be worth nothing if they can't even sell a vehicle at a competative price. That said, $139 million for the shares does seem a bit low. I think they should both agree on $200 million and move on.
      diffrunt
      • 2 Years Ago
      Lawyers-------rejoice!
      CEC
      • 2 Years Ago
      I believe that Chrysler is behind on it's payments to VEBA payments some 1.7 billion. Considering Fiat can only buy shares at 3.3% at a time that and if Fiat continued to buy shares at 140million a pop, VEBA would get its money back by the end of the transaction. What is the UAW thinking?
        mirobin
        • 2 Years Ago
        @CEC
        They're thinking it is a lowball offer. Chrysler was valued at $4.8B at the end of 2010, and the company's value has only gone up since then... In 2010 dollars a fair offer would be $158.4m. They're not going to get $342m either, but they're probably about as far off as the other side.
      Mr. Z
      • 2 Years Ago
      I demand that the UAW disappear!!!!
      jnbcressy
      • 2 Years Ago
      UAW screw U! What makes you think you are entitled to anything after you screwed legitamite stock holders. Please don't send any thugs to my house.
      • 2 Years Ago
      [blocked]
        Renaurd
        • 2 Years Ago
        What do you do for a living, what is your wage, and are you worth it?
          • 2 Years Ago
          @Renaurd
          [blocked]
          Matt
          • 2 Years Ago
          @Renaurd
          Stamping door panels doesn't warrant $45/hr.
          m_2012
          • 2 Years Ago
          @Renaurd
          Why do I need to pay union dues to have someone tell me what I am going to work for? Or tell me who I am going to vote for? I do what I enjoy, get paid plenty, and I am worth it! All without union "help".
          m_2012
          • 2 Years Ago
          @Renaurd
          Agreed.
        m_2012
        • 2 Years Ago
        That you will not find.
      luigi.tony
      • 2 Years Ago
      Boycott UAW products till the UAW is gone.
        wasp
        • 2 Years Ago
        @luigi.tony
        when i clicked on this article you had a +7. 3 minutes later i refreshed and you're at +1. The thugs have been alerted.
      Rayman
      • 2 Years Ago
      This is why I will not ever buy a new car from the UAW sourced labor, and any car built in Ohio!
        Shiftright
        • 2 Years Ago
        @Rayman
        Yup screw the American worker because of some greedy UAW leader
          Jason Krumvieda
          • 2 Years Ago
          @Shiftright
          So it is OK to boycott chick-fil-a because the left doesn't agree with their bosses position but it isn't OK to Boycott UAW because they take the union dues and give it to whomever they want in office?
        caddy-v
        • 2 Years Ago
        @Rayman
        Boycott each and every car made by the UAW. Send them a message they will never forget. Stay the he// out of politics. Their lies about candidates they don't like will not be tolerated by the very people that bailed their sorry butts out.
      wooootles
      • 2 Years Ago
      UAW is a terminal cancer.
        wrestleprocbt
        • 2 Years Ago
        @wooootles
        Amazing how they spent so much of their union thug money to get their guy elected again. Sad! This is why America is in such bad shape. I would be very happy to make even $20/hr which is no where near what union guys are making before you even cosider all their benefits. OUT OF CONTROL!
          Renaurd
          • 2 Years Ago
          @wrestleprocbt
          Maybe if you were smart enough to join a union or seek a union job, you would make more money. Don't slam a person that belongs to a union because you are jealous of their pay, try bettering yourself. Stupid will not make you rich and will not help you in your retirement.
          caddy-v
          • 2 Years Ago
          @wrestleprocbt
          Gee Renaurd, one doesn't have to be smart to join a union, he only has to be someone that can't stand on his own two feet and make something better of himself than being dependent on some radical idea that's time has passed long ago.
          tinted up
          • 2 Years Ago
          @wrestleprocbt
          Unions do have a place in this world. That place is for a collection of skilled workers that can get training by the union and put to work by said union. When unions dispatch workers from job site to job site they are very much necessary. Hell, even the laborers are used from time to time by decent businesses that need some grunt work occasionally. These are the only situations that I feel unions are necessary. A union is NOT necessary when it is merely a collection of workers that are accomplishing fairly mundane tasks and are NOT being dispatched from job site to job site. Not bashing the UAW or any union for that matter, but I am sure you can figure out which unions I like and which I do not from my explanation above.
        ss1591
        • 2 Years Ago
        @wooootles
        Their not a cancer but a lost sole that had so much and had to give much of it back. Just think what these people once had and over the past 20 years had it taken away, all while their UAW reps told them that if they fought back they could still win. I for one could not think of anything much worse because what can they change on their own?
      IBx27
      • 2 Years Ago
      Here's another schmuck we get to deal with for 4 more years...
      m_2012
      • 2 Years Ago
      How can federal law demand a price? Its worth only what somebody is willing to pay for it! If you don't like what Fiat is offering, move to the next bidder or quit trying to sell. I'm sorry you didn't take the cash! You bought stocks with someone else's money (their medical benefits) on a gamble. Question is - who is going to pay if you do lose this bet? The US govt?
      Jake
      • 2 Years Ago
      Sounds like normal negotiating to me. I don't see them as trying to gouge FIAT or overvaluing their shares. They seem to me to be leaving negotiating room below them. It's what I'd do.
        Renaurd
        • 2 Years Ago
        @Jake
        Exactly, most of the people on this have no idea what they just read. The UAW owns this stock, it's no different than any other entity that owns a block of stock, they can demand their price. These workers earned their healthcare and they should have it. I cannot understand why most of the commenters here think people that work in the auto industry should work for nothing, most of it is just damn sour grapes. Many of you need to grow up and get a life.
          ss1591
          • 2 Years Ago
          @Renaurd
          Its not that people think they should work for nothing but its the way that they deal with the public that brings out the worst in people. On one hand you have people who work for companies like Wal Mart (the living dead) and on the other you have the UAW workers (still trying to live in the past) each work hard for what they have but not considered mentally hard work (I for one could never work 40 a week doing the same thing) but still difficult because it is boring. The UAW needs to find a better way to bring the average American into their way of thinking if its fair because trying to bash us every time they are asked to give up or back isn't working and is costing them more then they get. It is sad that they have had to give up so much but the market for workers is now out of the hands of American only workers.
          Tfree
          • 2 Years Ago
          @Renaurd
          What about the people who lost all their savings in Chrysler when it went bankrupt? Should the government have given them stock in the new company like it did the unions? What about all the suppliers that they owed money to before bankruptcy? Nothing against the unions, it's just they received a huge payout when everyone else got the shaft.
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