It's official: The Detroit Three is now The Detroit Two and The Fiat Subsidiary, Chrysler. Both the Italian carmaker and The Pentastar announced the completion of cash payments and a Memorandum of Understanding (MOU) on future payments necessary to make the Chrysler Group a wholly-owned subsidiary of Fiat. As previously detailed, Chrysler made a cash payment of $1.9 billion and Fiat North America made a cash payment of $1.75 billion to the Voluntary Employment Benefit Association (VEBA) run by the United Auto Workers union.

On top of that, Chrysler Group signed an MOU that agrees to payments of $700 million to the VEBA in four installments, the first of which was made concurrently with the other cash payments. And for you trivia mavens, the full name of the UAW is the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America. So go impress your loved ones with that nugget after you check out the press release below.
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Chrysler Group Enters Into Agreement with UAW to Make Contributions to VEBA Trust and Pays a Special Distribution

January 21, 2014 , Auburn Hills, Mich. - As previously announced, Chrysler Group and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (the "UAW") have entered into a memorandum of understanding to supplement Chrysler Group's existing collective bargaining agreement. Under the MoU, Chrysler Group will provide additional contributions to the VEBA Trust of an aggregate of $700 million in four equal annual installments. Chrysler Group made the initial payment today contemporaneously with the closing of a transaction between a wholly-owned subsidiary of Fiat and the VEBA Trust in which Chrysler Group became a wholly owned subsidiary of Fiat.

Additionally, Chrysler Group paid a special distribution to its members in an aggregate amount of $1,900 million.1

For more information on Fiat's acquisition of the remaining equity interests in Chrysler Group from the VEBA Trust, please visit: http://www.fiatspa.com/en-US/Pages/home.aspx.

1. FNA's portion of the special distribution was paid to the VEBA Trust as part of the purchase consideration for its acquisition of the VEBA Trust's equity interest in Chrysler Group.

About Chrysler Group LLC
Chrysler Group LLC, formed in 2009 to establish a global strategic alliance with Fiat S.p.A., produces Chrysler, Jeep, Dodge, Ram, SRT, FIAT and Mopar vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler Group's culture of innovation, first established by Walter P. Chrysler in 1925, and Fiat's complementary technology that dates back to its founding in 1899.

Headquartered in Auburn Hills, Mich., Chrysler Group's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300 and Town & Country, Jeep Grand Cherokee, Dodge Dart, Ram 1500, SRT Viper and Fiat 500. Fiat contributes world-class technology, platforms and powertrains for small- and medium-size cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles.

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Fiat S.p.A. Completes Acquisition of Remaining Equity Interests in Chrysler Group LLC From VEBA Trust

January 21, 2014 , Turin, Italy - Fiat S.p.A. ("Fiat") through its wholly owned subsidiary, Fiat North America LLC ("FNA") today completed its previously announced acquisition of all of the VEBA Trust's[1] membership interests in Chrysler Group LLC ("Chrysler Group"). Chrysler Group is now a wholly-owned subsidiary of Fiat. The consideration for the acquisition consisted of:

a special distribution paid by Chrysler Group on January 21, 2014 of U.S.$1,900 million (FNA directed its portion of the special distribution to the VEBA Trust as part of the purchase consideration); and
a cash payment by FNA to the VEBA Trust of U.S.$1,750 million.

Fiat funded the U.S.$1,750 million payment from available cash on hand. Chrysler Group funded the special distribution from available cash on hand.

As previously announced, contemporaneously with the transactions described above, Chrysler Group and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (the "UAW") entered into a memorandum of understanding under Chrysler Group's existing collective bargaining agreements to provide for additional contributions by Chrysler Group to the VEBA Trust of an aggregate of U.S.$700 million in four equal annual installments, the first of which was paid in connection with closing of the transaction with Fiat.

As part of the transactions and as promptly as practicable, FNA and the VEBA Trust will dismiss with prejudice the proceedings before the Delaware Court of Chancery with respect to the interpretation of the call option agreement.

[1] The UAW Retiree Medical Benefits Trust, a Voluntary Employees' Beneficiary Association, an independently administered trust established to pay health care benefits for retirees from Chrysler


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  • 19 Comments
      elmonelson
      • 11 Months Ago
      Human nature can be quite odd. Sports fans attach themselves loyally to a team as though they have a large ownership stake in that team. The same seems to happen here with diehard Chrysler fans. The inability of this company to self-sustain from the products they manufacture is fully embarrassing and an undisputed fact. Yet the straws your grasping for are, "BTW, Fiat leader John Elkann was born in New York City." and "When they list Fiat-Chrysler on the NYSE then Fiat-Chrysler becomes an American company."? Americans LOVE strong American companies but sorry folks, Chrysler is no longer American. You know the saying, "Ownership is 9/10's of the law". Based on the success of Chrysler's past, I will start referring to this partnership as Fiat-Titanic (no disrespect to the British intended).
      ehisforadam
      • 11 Months Ago
      Chrysler is still American. They will still be designed and engineered here. If this isn't the case, we should start calling Lamborghini, Bentley, Rolls Royce, and Mini German; Volvo Chinese; Land Rover and Jaguar Indian; and Lotus Malaysian.
        bootsnchaps60
        • 11 Months Ago
        @ehisforadam
        Excellent point! There will still be a few American platforms like the Ram the minivan and most Jeeps, though I think over time there will be more Fiat basis for for the car lines. This seems a better pairing than with Daimler..
      mikemisa
      • 11 Months Ago
      i say kudos to fiat for getting the rest of chrysler under their belt. lets just hope fiat doesnt do what mercedes did to chrysler bleed them dry and left chrysler out to die.
        ehisforadam
        • 11 Months Ago
        @mikemisa
        The platform and engine sharing that's already been going on is pretty damn good proof this isn't the case. They've done more together in less than 3 years than DiamlerChrysler did in almost 10. Chrysler built and launched Fiat 500, localized FIRE engines to the US, Dodge Dart, Jeep Cherokee, Chrysler 200, added Mulitair to the World Engines, Maserati Levante, Chrysler infotainment systems and switch gear in Maseratis and Ferraris.
      Jesus!
      • 11 Months Ago
      Time to trade in the Jeep.
      elmonelson
      • 11 Months Ago
      Talk about "spin" you guys (and gals). Chrysler is no longer Chrysler, their Fiat (and that includes Ram, Dodge and Jeep). It's embarrassing (if you liked Chrysler products to begin with?!). Someone actually created a new division called "Ram" for the trucks, just to try and save face and separate from the now embarrassing "Dodge" name. Your grasping for straws talking about "American Chrysler platforms" and such. Fiat owns Chrysler so they own all the intellectual property as well. America is left with two major automobile companies and Chrysler is absorbed by the Italians. Ciao!
        billfrombuckhead
        • 11 Months Ago
        @elmonelson
        More Tea Party stupidity from the JapanInc worshippers and Confederate dunces. Fiat is going to be American so get over it.
          elmonelson
          • 11 Months Ago
          @billfrombuckhead
          Tea Party? Japanese worshipper? You just verified "you make an ass of yourself when you make assumptions". What you said makes as much sense as saying, "green is going to be yellow so get over it". But continue selling the pipe dream, Fiat-Titanic needs as many customers as they can get!
      billfrombuckhead
      • 11 Months Ago
      When they list Fiat-Chrysler on the NYSE then Fiat-Chrysler becomes an American company. Read it and weep America haters, there is a new big 3.
        • 11 Months Ago
        @billfrombuckhead
        [blocked]
        billfrombuckhead
        • 11 Months Ago
        @billfrombuckhead
        BTW, Fiat leader John Elkann was born in New York City.
        Michael Scherping
        • 11 Months Ago
        @billfrombuckhead
        That would be so awesome!!! I really hope that's how it goes. I fear that if it doesn't, Chrysler will tank by losing sales from patrons and die-hard American types. :/
      czarkzm
      • 11 Months Ago
      Hmmm...so UAW is now IUUAAAIWA....yup that sounds about right.
        karman876
        • 11 Months Ago
        @czarkzm
        Sounds like someone choking. I guess the UAW has that effect on the US automakers.
      1guyin10
      • 11 Months Ago
      Have to wonder how conflicted the Brits are going to be when this new company ends up being based in Great Britain. Will it soften their savagery of the Chryslers?
      diffrunt
      • 11 Months Ago
      F ix I t A gain T ony
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