AUTOMOTIVE
Shares of Fiat soar, but its workers fret

Fiat shares soared 16 percent on the Milan exchange Thursday on news that the Italian automaker will take full ownership of Chrysler, but some Italian unions worried what the deal will mean for jobs and investments in the country.

In a New Year’s Day announcement, Fiat said it will buy a 41.5 percent stake held by a United Auto Workers union trust fund for $1.75 billion in cash and another $1.9 billion in extraordinary dividends. The deal is due to close by Jan. 20.

The move was greeted in Italy, where Fiat is the largest private employer, with a mixture of anxiety and excitement.

Italian unions have long fretted that the global reach of Fiat could come at their expense in terms of production, job security and contract conditions. Their leaders immediately pressed for guarantees, appealing to the government to help safeguard their situation.

“It is indispensable that Fiat say what it intends to do in our country,” Susanna Camusso, leader of the nationwide, left-leaning CGIL labor confederation, said in a statement.

Fiat has a total of 215,000 employees, almost a third of whom are in Italy.

While praising the deal as important for Fiat to keep up with rivals, Camusso insisted that the company’s “strategic direction and planning remain Italian” and that it “keep a significant presence in Italy.”

Allied with CGIL is the FIOM metalworker’s union, which has a reputation as a hard-liner in labor negotiations. Its leader, Michele De Palma, said he will ask the premier’s office to summon all sides to talks about the future of the Italian plants.

“Before celebrating, we contend it is fundamental to understand the deal’s terms,” De Palma said.

— Associated Press

MORTGAGES
Regulator describes banks’ settlements

Citigroup paid $250 million to taxpayer-owned Fannie Mae and Freddie Mac to settle a lawsuit over soured mortgage securities, the regulator of the two housing finance firms said.

General Electric paid $6.25 million to settle a similar suit, the Federal Housing Finance Agency said in a statement. Ally Financial, the former parent of bankrupt Residential Capital, paid $475 million.

Citi, GE and Ally settled the claims in 2013, but none had disclosed the financial terms.

The banks are among 18 financial institutions that were sued in 2011 for allegedly misleading Fannie Mae and Freddie Mac, the biggest provider of housing finance in the United States, into buying more than $200 billion in mortgage-backed securities.

Six institutions have since settled the accusations. GE and Citi were the first two to resolve the claims in early 2013, but the FHFA kept the terms confidential as they negotiated additional settlements.

In October, JPMorgan agreed to pay $4 billion to resolve its lawsuit, and in December, Deutsche Bank entered a $1.9 billion accord with the agency.

In total, the United States has recouped nearly $8 billion through the settlements, the housing regulator said. The lawsuits accused the firms of violating securities laws and, in some cases, committing fraud.

— Reuters

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