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Fiat seeking $10B in financing to buy Chrysler

As Fiat looks to become the full owner of Chrysler, all it has standing in its way is the retiree trust of the United Auto Workers, which currently holds the remaining 41.5 percent of the company as the result of the Pentastar's bankruptcy deal. The Detroit News is reporting that that Fiat is currently talking to numerous banks in an attempt to raise around $10 billion to fund the purchase of Chrysler's remaining stake with enough left over to refinance the debt of both companies. We've known that Fiat has been working to obtain the capital to buy out Chrysler for some time now, but this is the first time we've seen Fiat tip its hand about how much cash it thinks it will need to close the deal.
The first order of business is a legal dispute over the value of the UAW's stake in Chrysler, which the report indicates could cost Fiat around $3.5 billion. The acquisition of remaining shares could happen by this summer, but it sounds like CEO Sergio Marchionne (above) might not be ready for a full merger until next year.

The problem with how automakers confront hacking threats

More than anyone, Chris Valasek and Charlie Miller are responsible for alerting Americans to the hacking perils awaiting them in their modern-day cars. In 2013, the pair of cyber-security researchers followed in the footsteps of academics at the University of Cal-San Diego and University of Washington, demonstrating it was possible to hack and control cars. Last summer, their research established which vehicles contained inherent security weaknesses. In recent weeks, their latest findings have underscored the far-reaching danger of automotive security breaches. From the comfort of his Pittsburgh home, Valasek exploited a flaw in the cellular connection of a Jeep Cherokee and commandeered control as Miller drove along a St. Louis highway. Remote access. No prior tampering with the vehicle. An industry's nightmare. As a result of their work, FCA US recalled 1.4 million cars, improving safety for millions of motorists. For now, Valasek and Miller are at the forefront of their profession. In a few months, they could be out of jobs. Rather than embrace the skills of software and security experts in confronting the unforeseen downside of connectivity in cars, automakers have been doing their best to stifle independent cyber-security research. Lost in the analysis of the Jeep Cherokee vulnerabilities is the possibility this could be the last study of its kind. In September or October, the U.S. Copyright Office will issue a key ruling that could prevent third-party researchers like Valasek and Miller from accessing the components they need to conduct experiments on vehicles. Researchers have asked for an exemption in the Digital Millennial Copyright Act that would preserve their right to analyze cars, but automakers have opposed that exemption, claiming the software that runs almost every conceivable vehicle function is proprietary. Further, their attorneys have argued the complexity of the software has evolved to a point where safety and security risks arise when third parties start monkeying with the code. Their message on cyber security is, as it has been for years, that they know their products better than anyone else and that it's dangerous for others to meddle with them. But in precise terms, the Jeep Cherokee problems show this is not the case. Valasek and Miller discovered the problem, a security hole in the Sprint cellular connection to the UConnect infotainment system, not industry insiders.

FCA under investigation for fraud by FBI, SEC, and DOJ

The US Justice Department is currently in the initial stages of investigating Fiat Chrysler Automobiles for fraud, according to two anonymous sources that spoke with Bloomberg. According to the unnamed sources, prosecutors are examining whether FCA violated US securities laws. As part of a coordinated investigation into FCA's sales reporting practices, investigators from the Federal Bureau of Investigation and the Securities and Exchange Commission visited the automaker's field staff in their offices and homes earlier this month, reports Automotive News. According to an anonymous source that spoke to Automotive News, federal staff attorneys visited FCA's US headquarters in Auburn Hills, MI on July 11. The unnamed source told the outlet that employees were advised to seek counsel before speaking with investigators. Investigators also visited the automaker's offices in Dallas, California, and Orlando, the unnamed source told Automotive News. The investigation comes after FCA claimed it had recorded the best month of sales in the US in the automaker's history in December with a total of 217,527 vehicles sold, reports Bloomberg. The claim now seems untrustworthy. According to a previous report from Automotive News, a Chicago-based dealership group filed a lawsuit against FCA earlier this year. The suit accused the automaker of paying dealers to fake new-vehicle sales. At the time, the automaker claimed the allegations were baseless and had no merit. After the lawsuit, FCA started to add an extended disclaimed at the end of its monthly sales reports, according to Automotive News. In a statement, FCA claimed that the automaker is cooperating with the SEC investigation and pointed out that it records "revenues based on shipments to dealers and customers, not on reported vehicle unit sales to end customers." We'll have more on the investigation as it unfolds. Related Video: News Source: Automotive News-sub.req., Automotive News-sub.req, Bloomberg, GIUSEPPE CACACE/AFP/Getty Images Government/Legal Chrysler Fiat FCA USDOJ investigation