Tag Archive | "Sergio Marchionne"

Fiat Shareholders Approve Reorganization


Fiat SpA shareholders approved a reorganization that opens the way for the Italian car maker that owns Chrysler Group LLC to move its headquarters to the Netherlands, its tax domicile to the U.K. and list its shares in New York, reported The Wall Street Journal.

With Friday’s green light from shareholders, Fiat will now merge with a Netherlands-based entity and take the name Fiat Chrysler Automobiles NV, which reflects its 100% control of Chrysler.

The creation of Fiat Chrysler is a career achievement for Sergio Marchionne, the chief executive of Fiat and Chrysler who took over control of Fiat a decade ago and then brought the company back from the brink in part by engineering the takeover of Chrysler.

Mr. Marchionne has long said that to squeeze the maximum benefits out of the marriage of Fiat and Chrysler—which together are the world’s seventh-biggest car maker—Fiat had to have access to U.S. capital markets through the New York stock listing. A key part of the executive’s plan has also been to have Fiat Chrysler’s headquarters in the Netherlands and tax domicile in the U.K.

With Fiat moving its headquarters after 115 years in Turin, the shareholders’ meeting became a time of reflection for many of them, who peppered Mr. Marchionne and John Elkann, the Agnelli family scion who is Fiat’s chairman, with questions and complaints regarding the move.

One requested a charter flight be made available to shuttle shareholders from Turin to Amsterdam while another lamented the fact that future shareholders’ meetings will be held in English. Many expressed concern that Fiat would be turning its back on the country it has called home since 1899.

“Fiat is not leaving Italy, only the holding company will be organized under the laws of the Netherlands,” Mr. Marchionne said. He added that there wouldn’t be a charter flight for shareholders’ meetings, but that they would be broadcast live.

To meet British requirements allowing its tax domicile in the U.K., Mr. Marchionne and other executives will have offices in London, where future board meetings are scheduled to take place.

The listing on the New York Stock Exchange is slated for the first half of October.

A clause in the merger document gives Fiat shareholders who voted against the tie-up the right to sell their shares to the company at €7.73 a share. Fiat shares traded at €7.24 at the time of the vote. Fiat bond holders also have the right of withdrawal. Fiat has set a maximum payout of €500 million ($669.5 million) to reimburse shareholders’ and bond holders who tender their stock. If that amount is exceeded, the reorganization creating Fiat Chrysler will be nullified.

Fiat shareholders holding 8% of the company’s stock voted against the motion at Friday’s shareholders’ meeting. Those shareholders have 15 days after the results of the meeting are registered, which is expected to be on August 4 or 5, to tender their shares while bondholders have 60 days to sell back their bonds.

About 5% of the total share capital would have to tender its shares by mid-August to reach the €500 million figure, but at that point Fiat could still have a way to complete the creation of FCA. Should the share price rebound and exceed the withdrawal price before the 60-day tender period for bondholders has expired, Fiat could sell previously tendered shares back to other shareholders to lower its payout below the €500 million maximum.

“I’m confident this will go through and if it doesn’t we’ll try again at a later date,” Mr. Marchionne said at a press conference following the shareholders’ meeting. “I’m patient and I have no problem waiting the 60 days to see how this plays out.”

People’s Bank of China deposited 2% of Fiat’s share capital at the shareholders’ meeting, making the Chinese bank the car maker’s fifth-biggest shareholder. It was not immediately known how the Chinese bank—which also owns 2.1% each of Eni, Italy’s largest oil company, and Enel, the country’s dominant utility—voted its shares at the Fiat meeting. The Agnelli family is Fiat’s largest shareholder, with a 30% stake.

Fiat and Chrysler sold 4.4 million vehicles combined last year, an amount forecast to jump to 7 million in 2018, according to an ambitious business plan released by Fiat in May.

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Fiat, Chrysler Parent Company, Reports 55% Drop in Profits


Fiat SpA, the parent company of Chrysler Group LLC, reported a 55 percent decline in second-quarter profits due to weak performances in Europe and Latin America, reported Michigan Live.

The Italian automaker said its net profit from April through June was 197 million euros ($264 million), down from 435 million euros ($583 million) for the same period in 2013.

Fiat’s net revenues rose 4.7 percent to $23.3 billion euros ($31.2 billion). Revenue rose 7 percent in North America and 34 percent in the Asia Pacific region, but dropped 23 percent in Latin America and 3 percent in the Europe, Middle East and Africa.

The financial results come two days before Fiat shareholders are expected to vote on the merger of Fiat and Chrysler, which Fiat completed acquisition of in January. Chrysler and Fiat CEO Sergio Marchionne has consistently said he expects the merger to be approved, followed by shares of the merged company, Fiat Chrysler Automobiles, arriving on the New York Stock Exchange in October.

With the acquisition, FCA is the seventh-largest automaker in the world.

Fiat, which expects to ship 4.7 million vehicles in 2014, doesn’t break out Chrysler’s quarterly earnings. The Auburn Hills-based automaker is due to report earnings Aug. 11.

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Fiat Chief Tears Into Union Over Stoppage


Two years after a bruising battle with unions, Fiat Chrysler Automobiles Chief Executive Sergio Marchionne is again butting heads with workers at his company’s Italian factories, reported The Wall Street Journal.

Mr. Marchionne on Thursday canceled plans to shift 500 furloughed workers from a mostly idle Fiat plant in Turin to a nearby Maserati factory, according to a person familiar with the situation. Fiat has also shelved plans to use overtime at the same Maserati factory to meet booming demand for the luxury brand, the person said.

The executive’s decision comes a few days after 200 workers belonging to the Fiom metalworkers union held a one-hour strike at the Maserati factory to protest general working conditions. The strike led to 11 fewer cars being built, Fiat said.

The strike at the Maserati plant was “incomprehensible, irrational and unjustified,” Mr. Marchionne wrote in a letter published in Turin’s La Stampa newspaper. “The recent episodes, the result of the actions of a small minority, caused a loss in production in a very delicate moment and can’t be taken lightly.”

Fiom couldn’t be reached for comment.

Fiom has historically been the most combative of Italy’s three main metalworkers unions and was the only one of the three not to sign a national contract that came into effect at the beginning of 2012. While the other two large metalworkers unions, Fim and Uilm, have calmer relations with Fiat, they have in recent weeks also raised their voices because the national contract expired at the end of December and hasn’t been renewed.

Fim and Uilm chose not to strike on Monday. But in addition to the lack of a new contract, they are at loggerheads with Fiat over a one-off payment that is to be made to all workers. The company and the unions have agreed in principle to the payment, which comes in a year that salaries have been frozen, though they disagree on the amount. The unions initially asked for €390 ($529), while the company offered €200. Fiat has come up to €250 and the unions down to €300, though they haven’t reached an agreement.

“Negotiations must restart so we can clarify with Fiat what has emerged in the last few hours,” Federico Uliano, Fim’s national secretary, wrote in a statement. “We haven’t received anything written about the agreement [to shift the workers and make use of overtime] being revoked, so for us that agreement is still valid.”

Uilm also hasn’t received official word from Fiat, but several members working in the Maserati factory had been informed of the company’s decision, said Eros Panigalli, Uilm’s national secretary. He also called on Fiat to begin serious negotiations on renewing the national contract.

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Fiat Chrysler Says Performance of US Operations Crucial


Fiat Chrysler Automobiles Chief Executive Sergio Marchionne said on Sunday a good performance by its U.S. operations was crucial for the success of the company’s recently announced business plan, according to Reuters.

The carmaker launched a breakneck global growth effort last month built around its upmarket Alfa Romeo, Jeep and Maserati brands. Under the 2014-2018 business plan, it aims to boost sales by 60 percent and increase net profit five-fold by 2018.

“The execution of the (Fiat Chrysler Automobiles) business plan announced on May 6 depends on the fact that the U.S. operations perform well,” Marchionne said at a business event in the Italian town of Trento.

Marchionne said the company needed cash from Chrysler’s U.S. operations to fund its strategy in Europe, where Fiat was still battling with a weak and fragile economic recovery and over-capacity of the market for mass-market brands.

Chrysler filed for bankruptcy in 2009 and received a U.S taxpayer-funded bailout. Fiat took over the U.S. automaker at the time and completed the buyout at the beginning of this year to become the world seventh-largest carmaker.

The group is preparing to move its main listing from Milan to New York by the end of this year.

Marchionne said Chrysler’s financial strength and commercial clout overseas would help Fiat boost sales of Alfa Romeo, which will build eight new models by the end of 2018 thanks to investments worth 5 billion euros ($6.8 billion).

“On Friday I saw the prototype for one of the new models engineers are developing in secret, and I can say we are on the right track,” he said, adding that the model would probably be unveiled in the third quarter of next year.

Marchionne confirmed that all Alfa Romeo cars would be produced at Italian plants, at least until 2018, and said he would ask the government of Prime Minister Matteo Renzi to take measures to facilitate exports.

“I am not asking for financial aid. I am asking for logistic, regulations … changes to help exports,” Marchionne said, lamenting that he had not received any such help from Renzi’s predecessors.

Marchionne, who in the past ignored opposition from Italian labour unions and industry lobby Confindustria to negotiate company-level job contracts at Fiat plants, voiced support for the 39-year-old Renzi, who took office in February.

“I like Renzi very much, I hope he will find support for his agenda … it is the only agenda we have both in Italy and in Europe,” Marchionne said.

Renzi has promised to try to focus euro zone policies on growth and employment and away from austerity during the six months that Italy will hold the rotating European Union presidency starting in July.

“The austerity that came from Germany doesn’t make any sense for Europe now,” Marchionne said.

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Fiat’s Growth Plan Is Achievable, Marchionne Says


Via The Wall Street Journal:

The ambitious volume growth targets in Fiat Chrysler Automobiles NV’s five-year plan presented earlier this month are achievable, Chief Executive Sergio Marchionne said on Tuesday.

“I wouldn’t have put them down if they weren’t achievable,” Mr. Marchionne said at an event to commemorate the 10-year anniversary of the death of former Fiat Chairman Umberto Agnelli.

Earlier in May, the company’s top executives rolled out a five-year plan that projects big gains for a revamped Alfa Romeo sports-car brand, its Jeep sports-utility line and a repositioned Chrysler focused on mass-market sales. Fiat Chrysler aims to increase yearly vehicle sales by 60% to 7 million by 2018.

The relaunch of Alfa Romeo is the most challenging part of the plan, Mr. Marchionne said.

The CEO said that the financial targets he laid out for 2014 also are achievable.

He added he isn’t worried about the market’s negative reaction to the plan and he is convinced the stock will soon recoup losses sustained since the plan’s presentation on May 6. Fiat shares have lost 8.4% since the plan’s presentation.

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Fiat Chrysler Will be OK if it Misses Lofty Targets: Marchionne


Via Reuters

Fiat Chrysler Automobiles (FIA.MI) Chief Executive Officer Sergio Marchionne said the company will be much stronger than it is today at the end of his plan to sell 7 million cars by 2018, even if it misses the targets he set forth last week.

“The targets are the targets. But even if I miss it by 10 percent, from where I am today, it’s like (the) midget and the Jolly Green Giant,” Marchionne said at the dedication of a new transmission plant in Tipton, Indiana, on Tuesday.

His suggestion was that Fiat Chrysler would prosper, whether or not it falls a bit short of meeting some of his lofty goals.

The Green Giant, mentioned with a touch of humor by Marchionne, is the towering animated character with a deep “Ho, Ho, Ho!” long used to advertise a brand of canned and frozen vegetables produced by General Mills.

Last week Fiat shares fell 13.5 percent as Marchionne revealed a five-year plan that calls for the global sale of 7 million vehicles from 4.4 million in 2013 and a fivefold increase in net profit.

Many Wall Street analysts said they were concerned that Fiat Chrysler would be unable to meet the ambitious goals.

Marchionne said the targets were to spur his troops to greater heights after the first five-year plan, from 2009 to 2013, that righted a near-bankrupt company to one that will be introduced on the New York Stock Exchange late this year as the seventh-largest car company in the world.

“People think I do these plans for the benefit of the capital markets. That is the irrelevant portion of the pitch.

“The exercise of leadership requires the setting of some pretty bold objectives. The house needs direction. The plan is a structure that provides direction. So don’t quibble about whether I sell 400,000 Alfas or I sell 382,000.”

The company also plans to sell 150,000 Alfa Romeo cars in North America by 2018. It now sells no Alfa Romeo models in the United States or Canada.

Fiat shares fell 3 percent on Tuesday to 7.25 euros, but are up 22 percent since the start of the year and the announcement that Fiat had sealed a deal to buy out Chrysler’s minority owner.

JEEP PRODUCTION

Fiat Chrysler may expand Jeep production in United States by expanding existing plants, Marchionne also said.

“It may require the expansion of some of our sites. I can’t deal with the volumes at issue now.”

U.S. sales of Jeep, Fiat Chrysler’s SUV brand, increased 46.5 percent through April and existing Jeep plants in Toledo, Ohio and Detroit that make the profitable Wrangler and the Grand Cherokee are at production capacity.

“We’re looking at issue,” Marchionne said of getting more Jeep production in the United States.

Fiat Chrysler has plans to make Jeep at a plants in China and Brazil, but not in India, Marchionne said.

Globally, by 2018, Fiat Chrysler plans to produce 1.9 million Jeep models. It also targets sales of 1 million Jeeps this year, up from 732,000 in 2013.

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