DETROIT -- Fiat S.p.A. and the United Auto Workers retiree health care trust disagree over the value of Chrysler Group, said CEO Sergio Marchionne, who runs both companies.
"It would be nonsensical for us to open a discussion of the acquisition of the interest in VEBA given their expectations" of Chrysler's worth, Marchionne told analysts and reporters on Tuesday.
The best way for the union trust, known as VEBA, to exit its stake is through the "capital market," he said.
Marchionne didn't provide specifics.
The dispute follows Fiat's buyout of the U.S. and Canadian governments' shares in Chrysler. Fiat last week completed a $500 million payment for the U.S. Treasury's final 6 percent holding and $125 million for Canada's 1.5 percent stake.
Those deals were based on open-market references and not a multiple of earnings, Marchionne said.
A similar valuation for the trust's stake would put its value at more than $3 billion while the trust believes it's worth more, Marchionne said.
The trust can't force a sale of its stake until 2013.
"We don't have to hit that hurdle until January 1, 2013, when VEBA is in a position to require registration," Marchionne said. "We're going to use this time between now and then to explore all possible ways in which we can get to what we consider the right answer," he added.
Fiat, initially granted a 20 percent stake in Chrysler by the U.S. government, expects to hold 58.5 percent of the third-biggest U.S. automaker by the end of 2011, after getting 5 percent in return for developing a fuel-efficient car for Chrysler.
The union's trust will have the remaining 41.5 percent of Chrysler at that time.
Marchionne reiterated that he won't risk Fiat's credit rating to buy the stake even though the Italian automaker has the cash necessary for the acquisition.