Tag Archive | "Fiat S.p.A."

Fiat-Chrysler Rebrands as Fiat Chrysler Automobiles

Turin, Italy – The Board of Directors of Fiat S.p.A. (Fiat) approved a corporate reorganization and the formation of Fiat Chrysler Automobiles (FCA) as a fully-integrated global automaker. Along with the new name, the group also announced a new logo and branding materials.

Following Fiat’s acquisition of the minority equity interest in Chrysler Group LLC, previously held by the VEBA Trust, the Fiat Board of Directors reviewed options for the most appropriate governance and corporate structure. In order to establish a true peer to the major global automotive groups, in both scale and capital market appeal, the board decided to establish Fiat Chrysler Automobiles N.V., organized in the Netherlands, as the parent company of the Group. FCA’s common shares will be listed in New York and Milan.

“A new chapter of our story begins with the creation of Fiat Chrysler Automobiles. A journey that started over a decade ago, as Fiat sought to ensure its place in an increasingly complex marketplace, has brought together two organizations each with a great history in the automotive industry and different but complementary geographic strengths. FCA allows us to face the future with a renewed sense of purpose and vigor,” said John Elkann, chairman, Fiat.

Sergio Marchionne, CEO, Fiat and chairman/CEO, Chrysler Group said, “Today is one of the most important days in my career at Fiat and Chrysler. Five years ago we began to cultivate a vision that went beyond industrial cooperation to include full cultural integration at all levels. We have worked tenaciously and single-mindedly to transform differences into strengths and break down barriers of nationalistic or cultural resistance. Today we can say that we have succeeded in creating solid foundations for a global automaker with a mix of experience and know-how on a level with the best of our competitors. An international governance structure and listings will complete this vision and improve the Group’s access to global markets bringing obvious financial benefits.”

Under the proposal, Fiat shareholders will receive one FCA common share for each Fiat share they hold and the FCA common shares will be listed on the New York Stock Exchange (NYSE) with an additional listing on the Mercato Telematico Azionario (MTA) in Milan. FCA is expected to be resident for tax purposes in the United Kingdom, but this is not expected to affect the taxes payable by group companies in the jurisdictions in which their activities are carried out.

In order to foster the development and continued involvement of a core base of long-term shareholders, FCA will adopt a loyalty voting structure, under which Fiat shareholders who are present or represented by proxy at the Fiat shareholder meeting called to vote on the proposal and who continue to hold their shares until the closing, regardless of how they vote, are eligible to receive special voting shares equivalent in number to the newly-issued FCA common shares they receive. The special voting shares will be subject to specific terms and conditions.

The transaction is expected to be completed by the end of the year. The Group will present a long-term business plan to the financial community at the beginning of May 2014.

A New Look to Go With a New Name
Following an initial phase with the two corporate logos appearing side-by-side, both FCA now requires a new corporate identity representative of an organization that is much more than the sum of its two component parts, based on strong core values that represents a unique corporate culture, a common vision and a group with an international reach.

Created by RobilantAssociati, this branding project began with definition of a distinct strategic concept that served as the basis for creation of the name, logo, house style and entire corporate identity, whose universal and essential forms are strongly expressive and evocative.

Use of an acronym helps create a transition from the past, without severing the roots, while at the same time reflecting the global scope of the Group’s activities. Easy to understand, pronounce and remember, it is a name well suited to a modern, international marketplace.

The three letters in the logo are grouped in a geometric configuration inspired by the essential shapes used in automobile design: the F, derived from a square, symbolizes concreteness and solidity; the C, derived from a circle, representing wheels and movement, symbolizes harmony and continuity; and finally, the A, derived from a triangle, indicates energy and a perennial state of evolution.

The logo’s design lends itself to an extraordinary range of symbolic interpretations. It uses a versatile, modern language capable of expressing continuous change without losing its core identity.

The new logo will be adopted by Fiat and Chrysler as soon as practicable and before completion of the reorganization of the new group.

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Fiat Completes Acquisition of Chrysler Group

Turin, Italy — Fiat S.p.A., through its wholly owned subsidiary, Fiat North America LLC, completed its previously announced acquisition of all of the VEBA Trust’s membership interests in Chrysler Group LLC. Chrysler Group is now a wholly-owned subsidiary of Fiat.

The consideration for the acquisition consisted of a special distribution paid by Chrysler Group on Jan. 21, 2014, of $1,900 million (FNA directed its portion of the special distribution to the VEBA Trust as part of the purchase consideration) and a cash payment by FNA to the VEBA Trust of $1,750 million.

Fiat funded the $1,750 million payment from available cash on hand. Chrysler Group funded the special distribution from available cash on hand.

As previously announced, Chrysler Group and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America entered into a memorandum of understanding under Chrysler Group’s existing collective bargaining agreements to provide for additional contributions by Chrysler Group to the VEBA Trust of an aggregate of $700 million in four equal annual installments, the first of which was paid in connection with closing of the transaction with Fiat.

As part of the transactions and as promptly as practicable, FNA and the VEBA Trust will dismiss with prejudice the proceedings before the Delaware Court of Chancery with respect to the interpretation of the call option agreement.

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Fiat To Acquire Remaining Chrysler Shares

Detroit – Fiat S.p.A. (Fiat) announced an agreement with the VEBA Trust1, under which its wholly owned subsidiary, Fiat North America LLC (FNA) will acquire all of the VEBA Trust’s equity membership interests in Chrysler Group LLC, representing the 41.4616% of Chrysler Group not currently held by FNA. The transaction is expected to close on or before January 20, 2014.

In consideration for the sale of its membership interests in Chrysler Group, the VEBA Trust will receive aggregate consideration of U.S.$3,650 million consisting of:

  • a special distribution payable by Chrysler Group to its members, in an aggregate amount of approximately $1.900 million (FNA’s portion of the special distribution will be paid by FNA to the VEBA Trust as part of the purchase consideration); and
  • at closing, FNA will pay the remainder of approximately $1.750 million in cash purchase consideration to the VEBA Trust.

Fiat expects to fund the U.S.$1.750 million in cash from available cash on hand. Chrysler Group expects to fund the special distribution from available cash on hand.

Contemporaneously with the transactions described above, Chrysler Group and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) agreed to a memorandum of understanding under Chrysler Group’s existing collective bargaining agreements to provide for additional contributions by Chrysler Group to the VEBA Trust of an aggregate of $700 million in four equal annual installments. The initial payment will be made on closing of the transaction with Fiat, and additional payments will be payable on each of the next three anniversaries of the initial payment. Chrysler Group expects to fund the initial contribution to the VEBA Trust from available cash on hand.

In consideration for these contributions, the UAW will agree to certain commitments to continue to support the industrial operations at Chrysler Group and the further implementation of the Fiat-Chrysler alliance, including to use best efforts to cooperate in the continued roll-out of Fiat-Chrysler World Class Manufacturing programs, actively participate in benchmarking efforts associated with implementation of these programs across all of Fiat-Chrysler manufacturing sites to ensure objective performance assessments and provide for proper application of WCM principles, and actively assist in the achievement of the Group’s long-term business plan.

“I have been looking forward to this day from the very moment that we were chosen to assist in the rebuilding of a vibrant Chrysler back in 2009,” said John Elkann, chairman, Fiat. “The work, commitment and achievement I have witnessed from Chrysler over the past four and a half years is nothing short of exceptional, and I take this opportunity to officially welcome each and every one of the people in the Chrysler organization to the integrated Fiat-Chrysler world.”

Sergio Marchionne, CEO, Fiat and chairman and CEO, Chrysler Group, said, “In the life of every major organization and its people, there are defining moments that go down in the history books. For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments. I will be forever grateful to the leadership team for the support and unwavering dedication shown to the integration project that today has taken its final shape. The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization that will ensure all employees a challenging and rewarding environment.”

As part of the transactions, FNA and the VEBA Trust will agree to dismiss with prejudice the current proceedings before the Delaware Court of Chancery with respect to the interpretation of the call option agreement pursuant to which Fiat has, through FNA, exercised three tranches of a call option to acquire membership interests in Chrysler Group held by the VEBA Trust. All of these membership interests will be acquired by FNA in connection with the transactions described above.

Given the funding arrangements for this transaction, it is not envisioned that Fiat will require equity capital to be raised via a rights issue.

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Fiat May Raise Chrysler Stake To 46 Percent

TURIN – Fiat S.p.A. could raise its stake in Chrysler to 46 percent from 30 percent now by June, two persons with direct knowledge of the matter told Automotive News Europe.

Talks with international investment banks on refinancing Chrysler’s debt with the U.S. and Canadian governments are at an advanced stage, paving the way for Fiat to buy a further 16 percent of Chrysler by the end of June, the Italian newspaper Corriere della Sera reported on Thursday.

“This is the real goal Sergio Marchionne is working at,” the paper said. “He wants to do it by June. He might be able to do it a bit earlier.”

Fiat declined to comment on the report.

A Fiat source told ANE that “it is technically possible” for Fiat to get to 46 percent of Chrysler by June. Whether Fiat raises its Chrysler stake depends on how talks with the banks turn out.

On Monday, Marchionne, who runs both Fiat and Chrysler, said the U.S. automaker would refinance its onerous U.S. and Canadian government debt by June.

Also on Monday, he confirmed that Fiat wanted to get a majority stake in the U.S. group by the end of 2011, but did not elaborate on the steps needed to achieve this goal.

According to Chrysler’s April 6 filing with the U.S. Security and Exchange Commission in preparation for an eventual IPO, Chrysler must reduce its debt to the U.S. and Canadian governments to below $4 billion for Fiat to increase its Chrysler stake to 46 percent.

Chrysler currently owes the U.S. and Canadian governments $7.4 billion loaned in June 2009 when the automaker exited bankruptcy protection and Fiat took management control.

Before Fiat can take a majority stake in Chrysler, the U.S. automaker must fully pay off the government loans.

Fiat may pay $1.14 billion to exercise for an additional 16 percent of Chrysler if Marchionne makes the purchase in 2011 and $1.37 billion if he buys it next year, according to JPMorgan Chase & Co. analyst Ranjit Unnithan.

Fiat would also have to renegotiate a so-called ‘Incremental Equity Call Option’ to buy an additional 16 percent stake in Chrysler. The option currently is set to begin on January 1, 2013 and elapse on June 30, 2016.

Philippe Houchois, head of European auto research at UBS in London said: “There is a lot of flexibility in the contract to achieve control of Chrysler, so Fiat could exercise its 16 percent call option if it reduces the loans to below $4 billion.”

It could then wait for the full loan repayment before receiving the last 5 percent stake needed to reach a controlling 51 percent, he said.

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Fiat’s Chrysler Says Global Vehicle Sales Rose 12 Percent In February

Chrysler Group LLC, the U.S. automaker run by Fiat SpA, said its global sales in February rose 12 percent from a year earlier with the rate of growth outside North America quickening from January.

Deliveries climbed to 128,321 vehicles last month, Auburn Hills, Michigan-based Chrysler said in an e-mail. Global sales this year through February rose 14 percent to 229,787, below the 32 percent growth rate that Chief Executive Officer Sergio Marchionne has targeted for this year, reported Bloomberg.

Chrysler’s new vehicles and refreshed models haven’t had a chance yet to fuel new sales growth, Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan, said today in a telephone interview. He said he’s skeptical that the current lineup will be able to meet Chrysler’s sales goals.

“On the product side, they still need quite a bit of work,” he said. While Chrysler doesn’t have a product portfolio likely to drive “significant” gains, “they’ve done a good job in basically refining the products they already had in the market.”

Sales outside of the U.S., Canada and Mexico rose 8.6 percent to 11,305 compared with a year ago, said Ralph Kisiel, a Chrysler spokesman. Non-North American sales in January rose by 1.3 percent.

Sales from the Asia-Pacific region rose 51 percent to 3,648 in February, and deliveries in Western and Central Europe fell 33 percent to 2,083, Kisiel said yesterday.

Latin America sales rose 12 percent to 3,355 in February and deliveries in Chrysler’s sales region that includes Africa, the Middle East, Eastern Europe and Russia rose 17 percent to 2,210, he said.

The company previously reported U.S. sales rose 13 percent to 95,102 in February.

Chrysler’s second-largest sales market is Canada, where sales climbed 8.5 percent to 15,238 in February. Mexico sales last month rose to 6,676 from 6,013, the company said.

Marchionne, who is also CEO of Fiat, has said Chrysler will sell 2 million vehicles this year, 32 percent more than the 1.52 million the automaker sold in 2010. The automaker is trying to boost international sales and become profitable as it prepares for an initial public offering in the second half of the year.

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Fiat’s Chrysler May Report $99 Million Fourth-Quarter Net Loss

Chrysler Group LLC, the U.S. automaker run by Fiat SpA, may report a fourth-quarter net loss of $99 million, the average of three analysts’ estimates, after U.S. sales declined from the third quarter.

The fourth-quarter loss would exceed the $84 million deficit from the previous quarter. Chrysler on Jan. 31 will probably post an operating profit for the quarter of $186 million, according to the analysts. Chief Executive Officer Sergio Marchionne has said that high interest rates on government loans have kept Chrysler from reporting a net profit, Bloomberg reported.

While Chrysler’s U.S. deliveries rose 23 percent in the fourth quarter from a year earlier, sales fell from the third quarter, according to researcher Edmunds.com. The Auburn Hills, Michigan-based automaker’s U.S. sales fell 9.8 percent in the fourth quarter of last year compared with the preceding three months, Edmunds said.

Chrysler’s “business has gone well,” Marchionne said today, and its results are “in line with guidance.”

Chrysler in November raised its operating profit estimate for the year to $700 million, implying a $135 million fourth- quarter operating income. The automaker had earned $565 million on that basis through three quarters. Max Warburton, an analyst with Sanford C. Bernstein in London, called the guidance “conservative” at the time.

Operating profit was $239 million in the third quarter.

Fiat, the parent company, reported a third consecutive quarter of net income today, powered by Iveco trucks, Case New Holland tractors and auto demand in Brazil. Net income reached 318 million euros ($436 million), compared with a 283 million- loss a year earlier, the Turin-based company said today.

The results are for Fiat Group before the company spun off its industrial businesses into Fiat Industrial SpA this month.

Trading Profit

Fourth-quarter earnings before interest, taxes and one-time items, which Fiat calls trading profit, rose 26 percent to 615 million euros, exceeding the 598 million-euroaverage estimate of 13 analysts surveyed by Bloomberg.

Marchionne, 58, separated Fiat’s trucks and tractors units to focus on making cars. Italy’s largest manufacturer led a ninth consecutive monthly decline in European car sales in December as demand waned after government incentives expired. Fiat Industrial shares fell in Milan after the CEO didn’t raise 2011 forecasts.

2011 Outlook

Fiat forecast industry car sales in 2011 in Europe will fall 3 percent, according to a slide presentation posted on its website today.

The Brazilian car market may grow by as much as 5 percent, the company said. Fiat expects to maintain its market share in Brazil and improve it in Europe in the second half, it said.

CNH Global NV, the agricultural equipment maker that is part of Fiat Industrial, today reported fourth-quarter net income of $209 million, compared with $28 million a year earlier. Net equipment sales jumped 17 percent to $3.8 billion.

Marchionne, who aims to improve productivity and capacity utilization in Italy, this month won workers’ concessions over a 1 billion-euro plan to revamp Fiat’s Mirafiori factory.

Fiom Cgil, Fiat’s biggest union which represents 10,000 of the carmaker’s 83,000 workers in Italy, opposes the deal and has called a general strike tomorrow among metalworkers against the CEO’s plan to curtail absenteeism and strike rights.

Fiat intends to produce as many as 280,000 cars and SUVs annually at Mirafiori for the Jeep and Alfa Romeo brands as part of its venture with Chrysler. Production is scheduled to begin by the fourth quarter of next year.

Chrysler Future

Chrysler needs to sell about 1.5 million vehicles annually to break even on an operating basis, down from 1.65 million, Marchionne said Jan. 12. Global sales in 2010 rose about 21 percent to 1.6 million cars and trucks, he said.

Chrysler is expected to sell “a minimum” of 500,000 vehicles in the Asia-Pacific region by 2014, Marchionne said today on a conference call with analysts. Those sales rose to 39,688 last year, a 17 percent increase from 2009, Ralph Kisiel, a Chrysler spokesman, said today in an e-mail. The majority of those deliveries, 23,428, were in China.

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