DETROIT – Chrysler’s plan for a public stock offering would ordinarily be cause to celebrate the automaker’s comeback from its government bailout and bankruptcy in 2009. But the company’s filing for the offering late Monday is hardly a moment of triumph.
Chrysler is taking the step only under pressure from its second-largest shareholder, a trust set up to provide medical coverage for 115,000 retired autoworkers and family.
And while the offering would generate needed cash for the trust, it would also thwart plans by Fiat, Chrysler’s Italian parent, to acquire full ownership of the automaker. The public stock offering is a way for the trust to establish a value for its shares. If Fiat and the UAW trust reach a deal on the value before the offering, it could still be called off.
The Detroit automakers have large responsibilities to their retirees. On Monday, General Motors said it would raise money in the bond market to buy preferred stock in the company owned by its retiree health care trust for $3.2 billion.
New York Times