Chrysler Pays UAW Trust $5 Billion to End Bankruptcy Chapter [View all]
Chrysler Group LLC, the American carmaker owned by Fiat SpA (F), will pay $5 billion to a United Auto Workers trust, completing the final payments that the company owed as a result of its bankruptcy.
Chrysler today closed a bond sale to reimburse the UAW health-care trust for a note it provided five years ago as part of the automaker’s financial rescue, the U.S. manufacturer said in a statement.
Fiat last month bought the 41.5 percent Chrysler stake held by the trust, which was created to pay medical bills for union retirees, to gain full control of the U.S. business. The combination creates the world’s seventh-largest auto manufacturer. Fiat Chief Executive Officer Sergio Marchionne, 61, wants to transform the company with a scale that can challenge the likes of General Motors Co. (GM) and Volkswagen AG.
“Getting full control of Chrysler is a big step but only a first step,” Erik Gordon, a professor at the University of Michigan’s business and law schools, said in an e-mail. “Now he will have to display world-class operating skills to integrate the companies and compete globally,” he said.