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[News Feed]

Interviewed in London, Sergio Marchionne, CEO of Chrysler and Fiat, said there are no plans to fully merge Chrysler and Fiat next year. Marchionne also told reporters that there are no plans to raise capital to purchase the Chrysler stake held by the United Auto Workers' Voluntary Employee Beneficiary Association (VEBA), which would also seem to rule out an initial public offering in 2012. Marchionne previously said he doesn't trust the U.S. financial markets at this time. Marchionne is optimistic about Chrysler's performance in the U.S. but pessimistic about the outlook for Fiat in the European market. He sees a shortfall this year and an even poorer performance next year.

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[LXbuilder]

Fiat looks to be in for a world of hurt in the next year or so, and the lack of success in the States with the 500 is not what Sergio was hoping for.

[MoparNorm]

I'm not getting the point, or the distinction of a "Fully Merged" Chrysler/Fiat?
Fiat owns 54% of Chrysler, is the controlling entity and Fiat and Chrysler management are for all practical purposes, fully merged and integrated.
There never will be an IPO, the combined companies are now under the Fiat Stock symbol, there isn't a need or reason for a separate "Chrysler" stock when the profits are under the control of Fiat. The union (VEBA) can sell any percentage of their ownership at any time,. to anyone they choose. Recouping earnings or the value of the VEBA ownership, doesn't automatically require an IPO.

With the financial meltdown in Europe, if Fiat ever has a reason to "merge" with Chrysler, it would come in the form of a consolidated headquarters and management operating out of the US or a neutral, tax free country.

[Stratuscaster]

If part of one or the other needs to be divested, perhaps it's easier if they aren't merged.

[LXbuilder]

Stratuscaster, on November 21, 2011 at 01:21 pm, said:

If part of one or the other needs to be divested, perhaps it's easier if they aren't merged.

Thats what I'm thinking.

[sebring96hbg]

MoparNorm, on November 21, 2011 at 01:02 pm, said:

I'm not getting the point, or the distinction of a "Fully Merged" Chrysler/Fiat?
Fiat owns 54% of Chrysler, is the controlling entity and Fiat and Chrysler management are for all practical purposes, fully merged and integrated.
There never will be an IPO, the combined companies are now under the Fiat Stock symbol, there isn't a need or reason for a separate "Chrysler" stock when the profits are under the control of Fiat. The union (VEBA) can sell any percentage of their ownership at any time,. to anyone they choose. Recouping earnings or the value of the VEBA ownership, doesn't automatically require an IPO.

With the financial meltdown in Europe, if Fiat ever has a reason to "merge" with Chrysler, it would come in the form of a consolidated headquarters and management operating out of the US or a neutral, tax free country.

VEBA can trigger an IPO under either the LLC or MTA agreements.  This could happen in 2013.  I recall that Fiat has first right to acquire the VEBA stake; but, it may not be positioned to do so because of the Euro meltdown.

Fiat does have to consolidate Chrysler in its financials based on its shareholdings in CGLLC.  For Fiat, it's a good thing.  Legally, there is no merged entity now.  And integration on a management level is through a JV-like council which is ad hoc.

[TripleT]

I thought the Fiat sales issues have more to do with the limited number of dealerships and single models.

Abarth will help but more outlets would sure help.

[Stratuscaster]

I think that allowing ALL Chrysler dealers to set up a Fiat Studio within their existing C/D/J/R dealerships would help, too. More dealerships, more exposure, less initial cash outlay. If the 500 takes off in that area, then the company and the dealership should work together to move forward on a standalone Fiat (and future Alfa Romeo) Studio.

Kinda like how the Mini/BMW thing is playing out.

The other is getting folks to understand that just because the car is small doesn't always mean the price should be. That's the tougher road to travel.

[dana44]

That's pretty much what I have been saying, too. A complete merger is a bad thing looking at BOTH economies, easier and safer to keep them semi-separate in the event of a major problem, able to save one if things go south on either side of the pond. It is probably easier that if one would have a problem, move to the other location and rebuild with the remains. Don't wish either to go south, but who knows what either government is going to do right now.