GM's IPO may help Chrysler's
- Source: Shanghai Daily
- [10:10 November 18 2010]
- Comments
The success of General Motors Co's IPO, potentially the largest United States offering ever, bodes well for Chrysler's own envisioned share sale, Fiat SpA CEO Sergio Marchionne said on Tuesday.
But the Italian executive told Reuters the strong take-up for the initial public offering did not change the timing of Chrysler's public debut, which he reaffirmed was still set for the second half of 2011.
Chrysler was on the brink of liquidation in 2009 before a US government-funded bankruptcy slashed its operating costs and handed majority ownership to a union-affiliated trust fund and management control to Fiat, Europe's sixth largest car maker.
"It will give us the logistics of what this market is looking for, as far as pricing expectations," Marchionne said in a brief interview on the sidelines of the launch of Chrysler's flagship showroom in downtown Los Angeles.
"This will give us a great, great precursor for the Chrysler IPO. I'm delighted, it couldn't have gone better."
Chrysler now employs 52,000 - up from less than 40,000 a year and a half ago, which Marchionne argues has an impact that reaches beyond just adding 12,000 jobs to the economy.
"I don't care what multiplier you use, 1 to 4, 1 to 5, 1 to 7, including the pizza guy. If you go far enough down the chain, I think the multiplier effect is huge," he said. "It just reinforces the fact that President Obama did the right thing. He saw it."
As a condition for the government bailout of the struggling auto maker, Chrysler - of which Fiat now owns 20 percent - took on loans at excessively high interest rates of about 12 percent.
