March 24, 2023

Chrysler Group Earnings Rise 68 Percent

(Reuters) – Chrysler Group LLC reported a rise of 68 percent in fourth-quarter net income, to $378 million from $225 million a year ago, driven by higher vehicle sales in its home North American market.

For all of 2012, Chrysler said its net income was $1.67 billion, up from $183 million in 2011.

Chrysler, majority owned by Italy’s Fiat SpA, said its net income would rise to about $2.2 billion in 2013.

Chrysler’s 2012 net revenue was $65.78 billion, up from $54.98 billion in 2011.

The Auburn Hills, Michigan-based company said its 2013 revenue would be between $72 billion and $75 billion.

(Reporting by Bernie Woodall in Detroit; Editing by Lisa Von Ahn)

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Pictures From the Week in Business, Jan. 18

Just a few years ago, as it plunged into bankruptcy, Chrysler was a wreck of a company. But strong sales and hot new products have made the automaker the envy of Detroit. Chrysler, the smallest of the American automakers, started the annual Detroit auto show on Monday with new versions of its Grand Cherokee and Compass S.U.V.’s. The two Jeep models have helped propel the company’s strong sales growth since its government bailout and bankruptcy in 2009.

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G.O.P. Turns Fire on Obama Pillar, Auto Bailout

And so began the latest, and perhaps most important, attempt by Mitt Romney to wrest Ohio into his column. His effort to do so is now intently focused, at times including statements that stretch or ignore the facts, on knocking down what is perhaps the most important component of President Obama’s appeal to blue-collar voters in Ohio and across the industrial Midwest: the success of the president’s 2009 auto bailout.  

Mr. Obama’s relatively strong standing in most polls in Ohio so far has been attributed by members of both parties to the recovery of the auto industry, which has helped the economy here outperform the national economy. At the same time, the industry’s performance and the president’s claim to credit for it appear to have helped Mr. Obama among the white working-class voters Mr. Romney needs.

With the race under most expected circumstances coming down to Ohio, and Ohio potentially coming down to perceptions of how the candidates view the auto industry, Mr. Romney has spent the last few days aggressively trying to undercut Mr. Obama’s auto bailout narrative.

In the past few days his running mate, Representative Paul D. Ryan, has accused Mr. Obama of allowing the bailout to bypass nonunion workers at Delphi, a big auto parts maker with operations in Ohio; Mr. Romney has characterized Mr. Obama’s bailout plan as based on his approach; and Mr. Romney incorrectly told a rally in Defiance, Ohio, late last week outright that Jeep was considering moving its production to China. (Jeep is discussing increasing production in China for sales within China; it is not moving jobs out of Ohio or the United States, or building cars in China for export to the United States.)

It is a high-risk strategy: Jeep’s corporate parent, Chrysler, had already released a scathing statement calling suggestions that Jeep was moving American jobs to China “fantasies” and “extravagant”; news media outlets here and nationally have called the Romney campaign’s statements — initially based on a poorly worded quotation from Chrysler in a news article that was misinterpreted by blogs — misleading.

Mr. Obama’s campaign, seeking to maintain what it sees as its advantage in Ohio, responded on Monday by releasing a commercial calling Mr. Romney’s ad false and reiterating that Mr. Romney had opposed the bailout on the terms supported by Mr. Obama. And on Sunday it dispatched the investment banker who helped develop the bailout, Steven Rattner, here to discuss Jeep’s plans and the auto rescue with local news organizations.

Democrats are hoping that Mr. Romney’s latest move will draw a backlash in a city so dependent on Jeep, which has announced plans to add 1,100 jobs to an assembly plant here that is currently being refitted for the next iteration of what is now called the Jeep Liberty.

Bruce Baumhower, the president of the United Auto Workers local that oversees the major Jeep plant here, said Mr. Romney’s initial comments on moving production to China drew a rash of calls from members concerned about their jobs. When he informed them Chrysler was, in fact, is expanding its Jeep operation here, he said in an interview, “The response has been, ‘That’s pretty pitiful.’ ”

The fight over the auto bailout shows the enduring power of the issue but also its complexities in a campaign that is about both the strength of the economy and the size and role of government.

The auto bailout was one of the first major moves of Mr. Obama’s presidency, and gave Mr. Romney an early chance in opposing it to prove his conservative credentials.

Mr. Romney has portrayed himself as an automobile maven. As he frequently says in his stump speeches, his father was credited with keeping American Motors in business during the 1950s and early 1960s. (The company, it happens, owned Jeep from 1970 to 1987.)

Before the incoming Obama administration was beginning to contemplate a bailout, Mr. Romney wrote an opinion article that he asked The New York Times to publish. The article carried the headline “Let Detroit Go Bankrupt”; in it, Mr. Romney wrote that in the event of a bailout, “you can kiss the American automotive industry goodbye.”

The plan the administration settled on first helped Fiat buy Chrysler and then put both Chrysler and General Motors into managed bankruptcies as part of a program that brought total government assistance for Detroit to almost $80 billion between the Obama and Bush administrations. Coming as the Tea Party was beginning to form, it seemed like risky politics for Democrats being accused of taking big government to an extreme.

At the third and last debate last week in Boca Raton, Fla., Mr. Romney emphasized his position that “these companies need to go through a managed bankruptcy, and in that process they can get government help and government guarantees.”

Mr. Romney has stepped up his offense on the issue since.

So it was that he told those at the exuberant rally on Thursday in Defiance, “I saw a story today that one of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China.”

Mr. Romney was apparently referring to a Bloomberg News article that said Jeep would return to manufacturing in China that had been misinterpreted by several conservative blogs to mean Jeep was shifting its production to China; the company made clear in a statement that Chrysler was only resuming production in China for Chinese consumers, which it had done for years before halting in 2009 before its sale to Fiat.

Mr. Romney’s ad treads carefully, with an announcer saying Mr. Obama “sold Jeep to the Italians, who are going to build Jeeps in China” and the screen flashing, “Plans to return Jeep output to China.”

Calling it “blatant attempt to create a false impression,” former Gov. Ted Strickland of Ohio, a Democrat, demanded Mr. Romney take it down on Monday. Stuart Stevens, a senior Romney adviser, disputed that the ad is misleading.

“Right now every Jeep built is built in America by an American and sold to the world,” he said. “Now instead of adding jobs in Toledo, they will be making Jeeps in China by the Chinese and selling them in China.”

Jeep began a joint manufacturing venture in China in 1984 and today makes some vehicles in Egypt and Venezuela. While it does produce cars for Chinese export here now, it has discussed returning some production to China since last year.

Jim Rutenberg reported from Toledo, and Jeremy W. Peters from New York. Richard A. Oppel Jr. contributed reporting from Sabina, Ohio.

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Aided by Growing Sales, Chrysler Profit Increases 80%

DETROIT — Chrysler, the third-largest Detroit automaker, said on Monday that its third-quarter profit rose 80 percent on the strength of new models, less debt and steadily growing sales in both American and international markets.

The company said it earned $381 million in net income, up from $212 million in the same period a year ago. Revenue for the quarter was $15.5 billion, an 18 percent increase from $13.1 billion in the same period last year.

The results could be seen as the latest evidence that Chrysler’s improbable comeback from its government bailout and bankruptcy was not only sustainable, but accelerating.

“We’ve changed the conversation at Chrysler Group,” said Sergio Marchionne, the chief executive of both Chrysler and its Italian parent, Fiat. “We continue to work feverishly and are pleased to see that our all-consuming aspiration for excellence is translating into results.”

Chrysler’s solid results are propping up the faltering European operations of Fiat, which was scheduled to release its third-quarter earnings on Tuesday.

Mr. Marchionne may announce new moves to cut losses at Fiat, which is struggling to cope with the steepest decline in sales in Europe in nearly 20 years.

But there’s no need anymore to fix Chrysler, which has repaid its debt to the American taxpayers and totally revamped its product lineup since emerging from bankruptcy in 2009.

The company said its worldwide sales increased 12 percent in the third quarter to 556,000 vehicles. For the first nine months of the year, it sold 1.7 million vehicles, up from 1.4 million in the same period in 2011.

Before its financial collapse, Chrysler relied mostly on its pickups, S.U.V.’s and minivans to contribute the bulk of its profit. The company was particularly vulnerable to swings in gas prices, which drove consumers to buy smaller, more fuel-efficient passenger cars from other manufacturers.

With the assistance of Fiat technology and parts, Chrysler has broadened its lineup to include a compact car, the Dodge Dart, which gets 40 miles per gallon of gas. The company is also putting more efficient engines into its bread-and-butter models like the Jeep Grand Cherokee and Chrysler 300.

Mr. Marchionne on Monday reaffirmed Chrysler’s full-year targets of $1.5 billion in net income and global shipments of 2.3 million vehicles.

Chrysler’s balance sheet also continues to improve as its business grows. The company said it had $11.9 billion in cash at the end of the third quarter, compared with $9.5 billion in the same period a year ago.

The company’s net industrial debt was $693 million at the end of the quarter, considerably lower than the $2.86 billion in debt on its books a year ago.

Chrysler’s two American rivals, General Motors and Ford, are expected to report lower earnings for the third quarter than a year ago, primarily because of growing losses in the troubled European car market. Ford was scheduled to report on Tuesday and G.M. on Wednesday.

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Center for Automotive Research Predicts Sharp Gain in Auto Jobs

DETROIT — Employment in the auto industry will return to prerecession levels by 2015, with carmakers and their suppliers adding about 167,000 jobs by then, according to estimates by an auto industry research firm.

The job growth would represent a 28 percent increase over current levels but would still replace only about a third of the jobs lost in the last decade. And much of the increase is made possible by labor agreements ratified this fall that allow the Detroit automakers to hire more workers on the lower of their two pay scales.

The industry group, the Center for Automotive Research in Ann Arbor, Mich., said it expected the Detroit automakers to hire 14,750 hourly employees in the next four years. They would receive entry-level wages of $16 to $19 an hour. Workers hired before 2007 earn about $29 an hour.

The group projected that about 15 percent of the new jobs would be at Detroit automakers, and nearly 80 percent would be at suppliers. Foreign automakers would account for the rest.

Sean McAlinden, the group’s chief economist, said that about one in six hourly workers at the three Detroit companies would be earning entry-level wages in 2015. They will account for 23 percent of hourly workers at Chrysler, 17 percent at General Motors and 12 percent at Ford, he said.

Currently, about 5 percent of hourly workers at the three automakers are paid entry-level wages.

Mr. McAlinden said that he expected the companies eventually to stop using a two-tier wage system but that it would most likely survive past their next contract negotiations with the United Automobile Workers union, in 2015. Chrysler’s chief executive, Sergio Marchionne, unsuccessfully pushed to eliminate the system during this year’s negotiations, though he said he did not propose cutting wages for any existing workers.

The two-tier system was created in 2007 to help the automakers cut labor costs as they were hemorrhaging money, but only recently were they able to begin hiring new workers in large enough numbers for the savings to have a noticeable effect on the bottom line.

“This was the only real option for lowering labor costs and increasing employment,” said Kristin Dziczek, director for the labor and industry group at the Center for Automotive Research.

The automakers have said the new contracts would result in a minimal increase to their labor costs, which was their overarching goal during the negotiations, while the union tried to recover some of the concessions it had given up in recent years.

Mr. McAlinden estimated that the new contracts would add $114, or 8 percent, to the companies’ average per-vehicle labor costs by 2015. The increases range from $85 a vehicle at G.M. to $166 at Chrysler, though Chrysler’s per-vehicle labor costs would remain the lowest of the three, at $1,293.

About 590,000 people now work in the auto industry, 13 percent more than in July 2009, when G.M. emerged from bankruptcy, Ms. Dziczek said. That figure is expected to grow to 756,800 in 2015.

Much of the job growth will happen in Michigan, where the three Detroit automakers cut more than half of their jobs since 2001, she said.

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Ford Workers Ratify Contract

The United Automobile Workers union said Wednesday that the contract had passed, with 63 percent voting “yes” and 37 percent voting “no.” Early on, the deal appeared in danger of being rejected, after several large plants turned it down. But workers who had weighed in since Friday were overwhelmingly in support.

The contract calls for 5,750 new jobs that Ford had not previously announced, and for most workers to receive signing bonuses of $6,000 and profit-sharing checks averaging $3,700 this fall. They also will get bonuses totaling up to $7,000 in later years, but workers earning entry-level wages are the only ones to receive a pay increase.

“This agreement is proof that, by working together with our U.A.W. partners and local communities, we can significantly create new jobs, invest in our plants and people, and make a very positive impact on the U.S. economy,” Mark Fields, Ford’s president of the Americas, said in a statement. “Our agreement is fair to our employees and it improves our competitiveness in the U.S.”

Ford has scheduled a conference call with analysts and reporters Thursday to explain the financial implications of the deal. The credit-rating firms Standard Poor’s and Moody’s said recently that they might upgrade Ford if the contract were ratified.

Workers at the last Detroit carmaker to reach a new labor deal, Chrysler, began voting this week. Voting there is scheduled to end Oct. 26.

Labor experts said they expected workers at Chrysler to express less opposition than those at Ford did, given Chrysler’s shakier financial position.

Gary Chaison, a professor of labor relations at Clark University in Worcester, Mass., attributed the big swing toward approval at Ford to union leaders realizing that the deal was in peril and stepping up their efforts to show workers how they would benefit. Sentiment also shifted after the leaders began to prepare for a strike, warning that Ford might not return to the bargaining table.

“They got out there and really started to sell the agreement, not as a great agreement but an adequate agreement,” Mr. Chaison said. “The members walked right to the very edge of a cliff and they looked over and decided to take a step back.”

The contract adds only about 70 cents an hour to Ford’s labor costs, which were roughly $59 an hour under the old contract, estimated Brian Johnson, an analyst with Barclays Capital. That is a 1 percent increase, the same amount that General Motors said its new contract, ratified by workers last month, would add.

“The contract, while richer than other firms, does not impose significant new costs on Ford (while a strike would have temporarily cut production and profits),” Mr. Johnson wrote in a report to clients this week. He said a strike could have cost Ford $273 million a day in lost revenue and $71 million a day in profits.

Workers at plants in Chicago and Wayne, Mich., voted against the deal in the first few days, but their “no” votes were more than overcome by strong support from large union locals in Dearborn, Mich., Louisville, Ky. and Kansas City, Mo.

“Our leadership went in the plant and made sure we answered as many questions as we could so they were making an informed decision,” said Jeff Wright, the president of U.A.W. Local 249 in Kansas City. More than 90 percent of voters there supported the deal Sunday after Jimmy Settles, the U.A.W. vice president in charge of negotiations with Ford, flew in to meet with its workers.

Mr. Wright said his members would have liked a better deal, but understood that this was not the time for the union to press harder.

“I don’t know anybody that wouldn’t want a raise,” he said. “It’s going to be good to have this behind us so we can go back to building cars and trucks.”

In the contract, Ford committed itself to invest more than $1 billion in the Kansas City plant, which has 3,700 workers, to make upgrades and build a metal-stamping plant on site. The plant will begin building a new full-size commercial van, called the Transit, in 2013.

It also will get an additional shift of workers to build the F-series pickup truck in 2012, adding perhaps 1,500 workers, Mr. Wright guessed, and the next-generation of the F-series will be built there.

“As the nation’s economy remains stalled and uncertain and its employment rate stagnates, we were able to win an agreement with Ford that will bring auto manufacturing jobs back to the United States from China, Mexico and Japan,” the U.A.W.’s president, Bob King, said in a statement.

Ford and the union have yet to resolve a grievance filed by thousands of workers who assert Ford violated its “equality of sacrifice” promise by restoring bonuses for salaried employees but not for its hourly work force. The grievance is in arbitration, with a hearing scheduled for November, and any payout resulting from that would be on top of the contractual bonuses.

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Focus Is on G.M. as Contract Talks Resume

Negotiators for the U.A.W. and G.M., the nation’s biggest automaker, reconvened for meetings after failing to reach a deal before their contract expired late Wednesday.

The union has agreed to a day-by-day extension at G.M. to complete the outstanding issues separating the two sides, including job commitments in plants, signing bonuses for workers and a pay increase for entry-level employees. Talks will resume 9 a.m. on Friday.

The union’s president, Bob King, has been conducting parallel talks with G.M. and Chrysler, the two Detroit automakers that were bailed out by the Obama administration in 2009.

But Chrysler abruptly asked for a weeklong contract extension on Wednesday night after Mr. King did not attend a scheduled session with Chrysler’s chief executive, Sergio Marchionne.

Instead, Mr. King seeks to set a pattern on wages and bonuses at G.M., and then try to match it at Chrysler and Ford Motor.

“It looks like the pattern, at least initially, is going to be set at G.M. rather than Chrysler,” said Arthur R. Schwartz, president of the consulting firm Labor and Economic Associates in Ann Arbor, Mich.

The union cannot strike either G.M. or Chrysler as a condition of their federal aid packages. That is not the case with Ford, which turned itself around without government assistance.

It is not unusual for the union to grant a contract extension if it is close to a deal with one automaker. G.M. has been determined to be the first company to settle and establish a cost structure that will help its comeback.

Mr. King, however, may find the going rougher at Chrysler, which is owned by the Italian carmaker Fiat and has yet to turn as profitable as G.M. or Ford. Mr. Marchionne was clearly peeved with Mr. King for not honoring an agreement to negotiate face to face on the last day before the current four-year deal expired.

The Chrysler chief executive sent a scathing letter by fax to Mr. King, noting that he had flown in from Europe to finish the negotiations. “You, unfortunately, could not be here, I am told, due to competing engagements,” Mr. Marchionne wrote. Mr. King received the fax in the middle of his discussions with G.M.

Mr. Marchionne then said he would be unavailable to meet with Mr. King again until next week. Mr. Marchionne also, for the first time, brought up the possibility of the contract being arbitrated if an agreement could not be reached.

“If that happens, nobody knows what we’re getting into,” Mr. Schwartz said.

Nick Bunkley contributed reporting.

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U.A.W. Opens Contract Talks With Chrysler

AUBURN HILLS, Mich. — Contract talks between Chrysler and the United Automobile Workers began Monday with promises by both sides to reach an agreement that benefits workers, the company and the American taxpayers who bailed out the nation’s third-largest automaker.

The opening of negotiations at Chrysler will be followed this week by similar ceremonies at General Motors and Ford. The current four-year agreements between Detroit’s Big Three and the U.A.W. expire in mid-September.

After years of losses and restructuring culminating in a government bailout and bankruptcy in 2009, Chrysler hopes to continue rebuilding its operations under its new owner, the Italian automaker Fiat.

Company executives said the next contract with the union could not add costs that make the company uncompetitive with foreign automakers. Four years ago, Chrysler estimated that each union worker cost $76 an hour in wages and benefits. After substantial job cuts that have reduced the company’s hourly employees in the United States to 23,000, Chrysler’s typical U.A.W. worker now costs $49 an hour.

“We have a responsibility to ensure we don’t go back to our old formula,” said Al Iacobelli, Chrysler’s vice president of employee relations. “Unfortunately, we have a rich history of not getting it right.”

However, the U.A.W.’s president, Bob King, said that union members deserved to share in Chrysler’s recent successes, which include earning a profit this year and increasing sales in North America.

Mr. King declined to outline specific goals, but said the U.A.W. hoped to add jobs and improve compensation, possibly through a new formula for profit sharing.

“Our focus is to get the best contract for our membership that makes sure they share in the upside,” Mr. King said.

The ceremonial handshake on Monday between the negotiating teams seemed more upbeat than in years past, when contract talks often deteriorated into a tense tug of war. In 2007, the U.A.W. called brief strikes at Chrysler and G.M. before reaching agreements.

But this time, the union is bound by no-strike clauses at G.M. and Chrysler that were conditions of their financial rescue by the Obama administration.

Mr. King said he did not anticipate having to go to binding arbitration with either company, nor to resort to a strike at Ford, the only American automaker to survive without federal assistance.

“It’s our job to get an agreement,” Mr. King said. “We don’t want some third party making decisions that impact our members.”

The federal government committed a total of $12.5 billion to save Chrysler. It has recovered all but $1.3 billion of that sum in a series of transactions that resulted in Fiat’s now owning a 53 percent interest in the American company.

Last week, Fiat paid the Treasury Department a total of $560 million for the remaining shares owned by taxpayers, as well as rights to buy shares held by a health care trust for union retirees.

Although the government has cut its ties to the company, both Chrysler and union negotiators said they considered it vital to reach a contract that justifies the bailout.

“We wouldn’t be standing here today talking about Chrysler without the support of the U.S. taxpayer,” said Scott Garberding, Chrysler’s head of manufacturing.

Mr. King added, “We have a larger responsibility to the American public.”

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The Caucus: Obama Hails Auto Industry’s Turnaround in Visit to Chrysler Plant

President Obama received an enthusiastic reception from workers at a Chrysler plant in Toledo, Ohio., on Friday, but he did not mention the day's disappointing jobs report.Doug Mills/The New York TimesPresident Obama received an enthusiastic reception from workers at a Chrysler plant in Toledo, Ohio., on Friday, but he did not mention the day’s disappointing jobs report.

TOLEDO, Ohio – President Obama hailed the auto industry’s comeback at a Chrysler plant here, two years after the company’s bailout, but warned several hundred appreciative workers that “headwinds” continued to buffet the economy – the closest he came to referring to the day’s disappointing employment report.

Mr. Obama’s visit to a century-old auto-manufacturing site that now makes the Jeep Wrangler was intended to draw attention to the good news that the auto industry’s once-threatened Big 3 — Chrysler and General Motors, which were both bailed out, and Ford, which recovered on its own – all were adding workers, making profits, increasing market share and, in the case of Chrysler and G.M., paying back their taxpayer loans. He did not directly address the day’s news that the government’s monthly jobs report showed an uptick in the unemployment rate to 9.1 percent – unlike last month on the Friday that improved jobs numbers were released, when he visited a Maryland plant and noted the improved numbers.

“There are always going to be bumps on the road to recovery,” Mr. Obama said. “We’re going to pass through some tough terrain that even a Wrangler would have a hard time on.” At that the audience sounded a good-natured yell of “No!” in defense of their product.

The job news hardly seemed to dampen the enthusiastic reception Mr. Obama received; instead he was repeatedly thanked by people who said they owed their jobs to him and his decision in early 2009 to provide $60 billion in government assistance to see Chrysler and G.M. through bankruptcy. Mr. Obama was introduced by Chrysler worker who said she and her husband would not have jobs or health coverage but for the bailout.

Taking credit for the controversial decision has become a staple of Mr. Obama’s recent stump speeches and is likely to remain so through his re-election campaign, especially given that the auto states of Ohio and next-door Michigan are election swing states. But in his short speech, Mr. Obama had to balance the congratulatory message with acknowledgment of ongoing weakness in the economy.

“I don’t want to pretend like everything’s solved,” he said. “There’s nobody here who doesn’t know somebody who’s looking for work and hasn’t found something yet,” Mr. Obama added, to which a man yelled “Right!”

“This economy took a big hit,” he said, and continued to face “headwinds” stalling progress. The latest, he said, are high gas prices, the economic disruptions from Japan’s earthquake and tsunami and instability in the Middle East.

But mostly he cited the evidence of the revival of the auto industry and manufacturing generally, and added near the end, ”I want you to remember all those voices who were saying ‘No. No we can’t.’” The workers gave him an effusive send-off and a standing ovation.

The day had the trappings of a campaign, with the factory visit sandwiched between stops at Rudy’s Hot Dog to greet lunch diners and at a Fred’s Pro Hardware store near the Chrysler plant, which Mr. Obama visited to draw attention to the fact that not only auto companies were helped by the bailout but also the suppliers and small businesses in the communities around them. And he stood at the gate at a shift change, greeting the departing workers.

A number thanked him for the government aid. “Nice to meet you. Thanks for bailing out Chrysler,” one woman said. Mr. Obama replied, “Thanks for paying it back.”

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DealBook: Fiat to Raise Its Chrysler Stake to 46%

A Fiat dealership in Milan.Luca Bruno/Associated PressA Fiat dealership in Milan. Fiat seeks “effective legal control” of Chrysler.

7:01 p.m. | Updated

Fiat, the Italian automaker, said on Thursday that it would raise its stake in the Chrysler Group to 46 percent and acquire a majority stake in the company this year.

Fiat increased its stake to 30 percent this month. It said it would pay $12.3 billion to acquire an additional 16 percent once Chrysler paid off the roughly $7 billion it owes the American and Canadian governments.

Fiat, based in Turin, Italy, and Chrysler, based in Auburn Hills, Mich., are working with their banks to refinance the debt before the end of June. Fiat will then exercise a $1.3 billion equity call option for the 16 percent stake, with the money adding to Chrysler’s capital. Fiat will draw on its cash reserves of more than 14 billion euros ($20.4 billion) to buy the stake.

Sergio Marchionne, the chief executive of both companies, said in a conference call with analysts that Fiat expected to obtain an additional 5 percent of Chrysler this year, raising its total to 51 percent and giving it “effective legal control.”

Fiat has had management control of Chrysler since a 2009 deal with the Obama administration gave Fiat a 20 percent stake in the American company in exchange for technology and financial aid.

In the meantime, Mr. Marchionne said, raising Fiat’s stake to 46 percent will allow the two companies to consolidate their results for accounting purposes and “provide a much-needed base for a fuller operational integration of these businesses.”

Asked if he was talking about a full merger, Mr. Marchionne said, “I’ve always said from a governance stance that it doesn’t make sense to have two separate companies.” He cautioned that he could not predict “how we might get there,” emphasizing that integration at the business level was more important than legal integration.

Mr. Marchionne has been saying for some time that he hoped to hold an initial public offering of Chrysler shares as early as this year, but he has been more cautious recently. Speaking on that subject in the conference call, he said, “I think a lot of it depends on market conditions and the performance of Chrysler.”

He noted that any stock offering would be subject to discussions with Chrysler’s Voluntary Employee Benefit Association, which received a majority of the nearly worthless stock in Chrysler at the time of the government rescue in exchange for the money it was owed by the company.

As part of the 2009 deal with the Obama administration, the Italian company agreed to a series of performance goals that, once met, would allow it to increase its holdings. On Jan. 10, Fiat increased its stake to 25 percent, after meeting the first target, laying the groundwork for American production of an engine based on Fiat’s FIRE family (for fully integrated robotized engine).

On April 12, Fiat said it had met the second target, producing Chrysler sales of at least $1.5 billion outside of North America, and raised its stake to 30 percent. It said it expected to meet the last of the three targets — sales in the United States of a Fiat platform car that gets 40 miles per gallon — by the end of the year.

Shares of Fiat, which trade in Milan, were up 4.6 percent in afternoon trading.

On Wednesday, Fiat said first-quarter revenue rose 7.1 percent, to 7 billion euros ($10.2 billion), from the period a year earlier. It shipped 518,600 passenger cars and light commercial vehicles in the quarter, down 2.6 percent from the period a year earlier. Net profit rose 24 percent, to 37 million euros.

It will break out Chrysler earnings next month.

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