We know the Chrysler IPO will happen very soon and could even be as early as this week, but there are already issues ahead of this initial public offering because of the UAW retiree healthcare trust and the small stake they have in the company.
The union understands the role they have within the company was only a temporary one, but both parties have been unable to reach a decision as to how the shares will be priced, which is just how The Detroit News reports it.
It is for this very reason why an IPO is needed because it is the best way for Chrysler to determine value of shares. However, we cannot underestimate how much of a precarious move this is, and as such could leave one company much worse off than the other.
Let us say the Chrysler shares are priced too high, then this would be bad news for FIAT, who own 58.5 percent of Chrysler. However, if they were priced too low then the UAW would lose out.
Whatever happens, the IPO needs to go ahead because it will be good for Chrysler because of improvement in growth and a new line-up of vehicles that shows the automaker is heading in the right direction.
One has to wonder what FIAT’s motives are because there have been rumors to suggest they would much rather a weak Chrysler, but still able to make a profit because they might be much easier to control. Do you think if Chrysler was strong and profitable it could make it harder for FIAT to control them and so shift the balance of power?
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