Fiat to buy U.S. Treasury's sake in Chrysler
The Fiat and Chrysler logos.
HOBSON: Economists are focused this morning on the Labor Department in Washington where we're about to find out how many jobs were created last month and what the new unemployment rate is.
But over at the White House they're celebrating something else. The Italian automaker Fiat will buy the rest of the government's stake in Chrysler for about $500 million.
Let's get the latest now from Marketplace's Gregory Warner, who's with us live. Good morning.
GREGORY WARNER: Good morning.
HOBSON: Well first Gregory, what does this new Italian ownership mean for Chrysler?
WARNER: Well, Fiat's are famously small and cute and Chrysler likes to make their cars big. But Fiat seems to have stepped into the merger knowing that Chrysler especially can be very suspicious about Europeans telling them how to make cars. If you remember, Daimler Benz of Germany and Chrysler tried a merger. It collapsed in a sea of mistrust. So Fiat stepped into this sharing operations even before the company had a majority stake.
I called Ian Henry. He's an industry expert in London.
IAN HENRY: They had to show that they had done certain things to show the two companies were getting closer and closer together whether that was putting Fiat engines into Chrysler vehicles.
They're even producing Chryslers in Italy so maybe we'll see more SUVs on the small streets of Rome.
HOBSON: And the news today is that the government is going to get another $560 million, but will actually lose money on its bailout of Chrysler in the end right?
WARNER: That's right. To the tune of about $1.3 billion. But this does end the government's stake in Chrysler and the government will say that the bailout of the auto industry was a success because it saved 115,000 jobs and kept factories running through the recession.
HOBSON: Marketplace's Gregory Warner, thanks.
WARNER: Thank you.
BOB MOON: Looks like the company that's made its slogan "Imported from Detroit" -- Chrysler -- will soon officially be controlled from across the Atlantic again. President Obama heads to an Ohio auto plant today, to announce Uncle Sam is closer to getting out of the car business. And Italy's Fiat says it wants to create a unified, global footprint.
Marketplace's Gregory Warner reports we've heard that phrase before.
GREGORY WARNER: The last time a European company took over Chrysler in the name of creating a "global footprint, " it didn't go so well. The year was 1998, Germany's Daimler Benz never got along.
IAN HENRY: They didn't really get on at an operating level the Americans felt they were being taken over by the Germans and the Germans didn't trust the American engineering.
Ian Henry is director auto analysis in London. He says Fiat has approached the merger with a much more cooperative relationship. And Chrysler has changed. It's owner, the U.S. government is looking forward to making some money back for tax payers.
HENRY: There's a limited number of taxpayer dollars available. So this was the only or the best game in town.
The White House acknowledged yesterday that the government will not be making money on the auto bailout as previously hoped. Around $14 billion of the bailout fund won't be paid back.
I'm Gregory Warner for Marketplace.