Italian unions worry about ramifications
ROME (AP) — Shares in Fiat soared on Thursday on the news the Italian automaker will take full ownership of Chrysler, but some Italian unions worried what the deal will mean for jobs and investments in the country.
In a New Year’s day announcement, Fiat Spa said it could complete its acquisition of Chrysler without having to raise new capital through a rights issue. Investors cheered the fact, bidding the shares up 12 percent on the Milan exchange. The stock was up by as much as 15.8 percent earlier in the day.
Fiat will buy a 41.5 percent stake held by a United Auto Workers union trust fund for $1.75 billion (about 1.35 billion euros) in cash and another $1.9 billion in extraordinary dividends. The deal is due to close by Jan. 20.
The agreement caps the dream of Sergio Marchionne, Fiat’s chief executive and CEO of Chrysler Group, to run a truly global automaker. Marchionne called the deal one of life’s “defining moments that go down in the history books.”
The move was greeted in Italy, where Fiat is the largest private employer, with a mixture of anxiety and excitement.
Italian unions have long fretted that the global reach of Fiat could come at their expense in terms of production, job security and contract conditions. Their leaders immediately pressed for guarantees, appealing to the government to help safeguard their concerns.
“It is indispensable that Fiat say what it intends to do in our country,” Susanna Camusso, leader of the nationwide, left-leaning CGIL labor confederation, said in a statement.
Fiat has a total of 215,000 employees, almost a third of which are in Italy.
While praising the deal as important for Fiat to keep up with rivals, Camusso insisted that the company’s “strategic direction and planning remain Italian” and that it “keep a significant presence in Italy.”