VENICE — Fiat SpA Chief Executive Sergio Marchionne said Saturday the Italian auto maker offered about $125 million to the Canadian government to acquire its 1.7 percent stake in Chrysler Group LLC.
Speaking on the sidelines of an event in Venice, Mr. Marchionne said he made the offer Thursday night. The disclosure came two days after Fiat reached a deal to pay the U.S. Treasury $500 million to buy its remaining 6 percent stake in Chrysler, reported The Wall Street Journal.
Mr. Marchionne, who is chief executive of both Fiat and Chrysler, reiterated that Fiat has the financial ability to buy out the stake held by the United Auto Workers health-care trust fund but at the moment has nothing on the table.
"We acquired the U.S. Treasury stake in Chrysler also to avoid the possibility that a competitor would sit with us at the table in the future," he added.
A spokesman for Canada's finance minister said he was unable to comment about Mr. Marchionne's remarks, adding Canada remains committed to selling its Chrysler stake "as quickly as feasible, while maximizing the value of our equity interests for Canadian taxpayers."
The U.S., Canada and the health-trust fund were given pieces of Chrysler during the auto maker's 2009 bankruptcy.
Mr. Marchionne said that the main target is now to pay the health-trust fund, a voluntary employees beneficiary association, or VEBA. "All options are on the table now, the IPO is not necessary," he said.
Fiat's top manager said that he plans to add about 100 dealers in the U.S. by the summer to boost sales of the Fiat 500 model. "Americans want to buy fuel-efficient cars," he said when asked about the possible risk of selling small cars in a country accustomed to larger ones.
Mr. Marchionne said neither a merger between Fiat and Chrysler nor a decision on where to move the company's headquarters is a priority this year. "The real issue to work on is the leadership and the integration," he said. "We are going to make little changes in a short while. It's going to be a busy summer," he said, adding that the corporate governance of the company must take into account that Chrysler produces as many cars in the U.S. as Fiat does in the world. "Because of the weakness of the European markets in 2011 and 2012, Chrysler will make more cars than Fiat world-wide. This is an interesting dilemma," he said.
When asked about Fiat-Chrysler expansion plans in Asia and a possible tie-up with Japan's Suzuki Motor Corp., Mr. Marchionne said that the industrial relationship with the car maker is very good.
"We plan to continue our cooperation with them both on engines and platform developments," he said, mentioning the new S4 model. He confirmed that he met with Suzuki officials a couple of weeks ago.
He also said that the Italian car maker revised its sale target in Russia to 120,000 vehicles. "We did the revision in light of the changes to the domestic market."
Mr. Marchionne said that Fiat could issue more bonds in future months while Chrysler won't. He reiterated that the main target is to make money and generate cash. "Never ever get to the point of reference to the banks," he said. Mr. Marchionne also said that Fiat would seek capital—if and when necessary—on the financial markets.
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