Is a Foreign-Owned Chrysler Still American?
I hope you’re practiced in your philosophy, because here’s a question that could throw you for a loop:
If a foreign company owns 70 percent of an American automaker, should that automaker still be considered “American”?
A news story that surfaced last week seems to have skidded under a good majority of the blog-o-sphere’s radar: Fiat, it seems, is well on track to owning a full 70 percent of Chrysler. While that’s great news for improving Auburn Hills’ lineup, it turns Chrysler into little more than another Hyundai: American-built cars from a headquarters across the Atlantic.
There’s a lot that would have to happen for the 70 percent stake to become reality, but it could all fall into place within the next year. See if you can follow this:
Fiat owned about 30 percent of Chrysler before buying another 16 percent for over a billion dollars. Its current ownership stands at about 46 percent.
It can go to 56 percent as a reward for selling a 40-mpg car made in the U.S., a deal made under the original bankruptcy deal with the Obama administration. CEO Sergio Marchionne says that should happen this year, probably with the rebadged Fiat 500 for Dodge.
Marchionne wants out of the government loans given to Chrysler ASAP, saying, “It’s time to close the loop on what has been an incredibly necessary intervention.” So the remaining stake to jump to 70 percent would come if Fiat exercises an option to buy out the U.S. taxpayers’ share and to buy a percentage from the stake held by the United Auto Workers.
A majority share of the company would allow Fiat to do things like control Chrysler’s board and decide when to hold a public offering. Pretty powerful stuff.
The bottom line of all this is that a foreign company will probably own the vast majority of an American icon. But without that foreign ownership, the American icon would most likely be dead.
If Fiat ends up owning 70 percent of Chrysler, would you still consider Chrysler an American company?