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FCA made money in North America, lost everywhere else?

Discussion in 'Mopar News' started by Clark, May 5, 2020.

  1. MJAB

    MJAB Well-Known Member

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    After FCA sold Magneti Marelli (that generated billions of cash for FCA) FCA sold also some of this plastic activities assets there were not sold in Marelli sell.

    Plastic components (part of Magneti Marelli business)

    "... Plastic components and automotive modules business held for saleDuring the year ended December 31, 2019, certain entities within our plastic components and automotive modules business met the criteria to be presented as held for sale. On January 31, 2020, the Group entered into agreements for the sale of several of the groups of assets within our plastic components and automotive modules businesses for a total sale price of €47.5 million, resulting in a gain on disposal of €5 million. ...".

    Teksid

    "... Teksid Cast Iron Components Business Held for SaleDuring December 2019, FCA announced that it had entered into an agreement with Tupy S.A. for the sale of FCA’s global cast iron automotive components business, which is operated through FCA’s subsidiary Teksid S.p.A. The proposed sale includes Teksid’s cast iron production facilities in Brazil, Mexico, Poland and Portugal, in addition to Teksid’s interest in a joint venture in China and as a result the related assets and liabilities met the criteria to be presented as held for sale from December 31, 2019. The agreement values the business at €210 million enterprise value. Consideration, subject to customary purchase price adjustments, will be paid at closing expected in the second half of 2020. The proposed transaction is subject to customary closing conditions, including the receipt of antitrust approvals. Teksid’s aluminum business is not included in the transaction and will remain part of the Group ..."
     
  2. MJAB

    MJAB Well-Known Member

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    Always to take a look at "Employee benefits liabilities", that is primarly a North America financial obligation for FCA since different rules in most of other countries worldwide.

    Employee benefits liabilities

    "... Employee benefits liabilities include provisions for both pension plans and health care, legal, severance indemnity and other post-employment benefits (“OPEB”) ..."

    -> total at 31 of march 2020 is Euro 9,163 million.
     
  3. aldo90731

    Staff Member Level III Supporter

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    Meanwhile, GM managed to stay in the black.

    Of course they have no European business no more.
     
  4. Clark

    Clark Member

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  5. Clark

    Clark Member

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    That really does not matter does it? How does FCA benefit from Exor?
    Who financed Maserati's relaunch?
    Italian side is sucking down the money both in Europe and in Latin America at this point.
    It does not matter anyway with the French tie-in coming.
     
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  6. MJAB

    MJAB Well-Known Member

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    Ferrari: how much money FCA received from sale of Ferrari stocks? How much debt was transferred from FCA to the no debt company Ferrari? How much anticipated dividends were transferred from Ferrari to FCA?

    Magneti Marelli: how much money recived FCA from selling Magneti Marelli to Calsonic Kansei (now Marelli)?

    LATAM: Do You know how much margin, and revenues, had the group in LATAM till 2012 / 2013 ?

    Just some examples ...

    And I can add that profits of NAFTA are not enough to cover OPEB costs and liabilities. That are for most part NAFTA debt / potential debt.
    Total employee benefits liabilities at 31 march 2020 are more than Euro 9 billion.

    p.s.: Here an answer to one of my (retoric) questions. Magneti Marelli sale = Euro 5.8 billion cash for FCA.
    FCA Completes Sale of Magneti Marelli to Calsonic Kansei | FCA Group (at https://www.fcagroup.com/en-US/media_center/fca_press_release/2019/may/Pages/fca_completes_sale_of_magneti_marelli_to_calsonic_kansei.aspx )
     
  7. MJAB

    MJAB Well-Known Member

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    This is the Q1 2020 financial presentation.
    https://www.fcagroup.com/it-IT/inve...A_2020_First_Quarter_Results_Presentation.pdf

    There is also a slide about the forecast the "full year 2020 indystry outlook" (automotive industry).

    North America - total vehicles including medium/heavy trucks
    Region: 15.0 million (-28% y-o-y)
    U.S.A.: 12.5 million (-29% y-o-y)
    Outlook for region reduced from 20.3, U.S. reduced from 17.0.

    EMEA - total passengers cars and LCVs
    Region: 17.7 million (-23% y-o-y)
    EU 28+EFTA: 13.4 million (-26% y-o-y)
    Outlook for region reduced from 22.7, EU 28+EFTA reduced from 17.5.

    LATAM - total passengers cars and LCVs
    Region: 3.0 million (-29% y-o-y)
    Brazil: 1.9 million (-30% y-o-y)
    Outlook for region reduced from 4.3, Brazil reduced from 2.8.

    APAC - passengers cars only
    Region: 27.1 million (-13% y-o-y)
    Brazil: 18.6 million (-13% y-o-y)
    Outlook for region reduced from 31.2, China reduced from 21.3.
     
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  8. Dave Z

    Dave Z It's me, Dave
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    So the MM and Ferrari sales likely did fund Alfa Romeo... and Ferrari probably took some of the Chrysler purchase as well.

    No question but that Chrysler end got benefit from Sergio and the invigoration of the Fiat leaders.

    In product it's a bit more questionable... the most profitable stuff in North America remains the non-Italian-based cars, powertrains, and architectures.

    Long run the goal should be unification as with GME, but absolutely not “we chose this for Alfa Romeo, now you figure out how to make it work.”
     
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  9. MJAB

    MJAB Well-Known Member

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    FCA production restart.

    NAFTA: All plants, except Belvidere –week of May 18, Belvidere by June 1
    APAC: JVplants (China) Guangzhou –Feb 19oChangsha –Feb 24•Ranjangaon (India)–May 18
    EMEA: Melfi (PHEV), Mirafiori (500 BEV), Sevel–Apr 27. Majority of remaining plants beginning late May, all plants restarted by early July
    LATAM: All plants –May 11

    Production restat factors:
    Production level ramp-up will vary by plant
    Jobs per hour to be reduced due to additional procedures to ensure workforce safety
    Initial production prioritized to:
    - Electrified products
    - Higher margin products
    - Vehicles with low inventory
    Production levels to be aligned to consumer demand

    Suppliers manufacturing locations are about 4500.
     
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  10. Dave Z

    Dave Z It's me, Dave
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    Wonder if there will be some oddball vehicles as when they were trying to make as many Vipers as possible from parts on hand... someone will have some fun figuring out which levels they can make...
     
  11. MJAB

    MJAB Well-Known Member

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    As I can see ex post, after all happened. I could say that Agnelli family goal was to split their group in orther to maximize the value (what the "market" wanted for years) and being major shareholder (like Ford family have done years and years ago).

    Sergio Marchionne was the instrument and the person charged to find a way to do it.
    So there is a logic in initial "industrial" activities split (CNH Industrial) since I think the goal was to join with GM or someone with similar size.

    Ferrari was split since there was Ferrari family in the owbership structure and also because it generates high profit vs. investments. To make the deal possible they had to have the ok of Ferrari family, that was obtained not distributing dividends for years (Ferrari family in of official balance document complained about, that is very "unusual"):
    In Ferrari split they transferred more money to FCA than expected by market (some complained about, one of the reasons the first months the stock value went down).

    Since they didn't arrive to do that kind of merger, than they targeted another company,smaller like Peugeot. I could think that "Renault deal" was more tactic than real deal (Agnelli family knows very well how businees goes in France).
    To make the deal with Peugeot, FCA should decrease in size again, than the sale of Magneti Marelli and extraordinary dividends distribution (part of Magneti Marelli received cash) + ordinary dividens (all dividends have to be revised since COVID-19 pandemic).

    I didn't expect a sale of Magneti Marelli. Under Sergio Marchionne I doubt they would sell totally, but something like CNH Industrial demerger.

    As products lineup I think they waited, waited, ... waited for the merger to arrive, but the plans didn't went as supposed.
    Also Sergio Marchionne at head of NAFTA is something I really don't understand, maybe for one year or two, but no more.

    Well Fiat was famous to "milk" everything till last drop. In LATAM they were used to reuse architectures, stamps, assembly machinery parts, ... from european activities when introducing new ones in Europe. In LATAM for many years the operative margin was more than 10%, sometimes 12-13%.
     
  12. KrisW

    KrisW Well-Known Member

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    A lot of that is down to dirt-cheap gasoline, though. The big difference is that today, all of the North American eggs aren't all in one basket like they were in 2006-2007. If there's a sudden demand for smaller, more economical vehicles, there are models in the Jeep range that can meet that demand. Those models are all based on FIAT designs. Actually, the fastest-selling launch in Jeep's history was KL, based off a FIAT platform. Against that, yes, you've got to count the Dart and 200, which didn't meet expectations, so it's a mixed bag. (Personally, I always thought that Dart was enlarged too much and should have been kept at Corolla size, while 200 was not not made big enough: it should have been a crossover)

    However, some of the product benefits that came from the FIAT side are less visible. The use of whole-vehicle computational modelling, something that has had enormous benefits to the class-leading NVH characteristics of Pacifica (itself a distant descendant of a FIAT architecture, but most of the input is by now from Auburn Hills), as well as the vast improvements made with JL and DT. That comes from FIAT know-how, something they started moving towards in the early 2000s, and something that would have taken Chrysler more than a decade to get to on its own (some of FCA's competitors still aren't at this level). FIAT also brought expertise in interiors, something that Chrysler had badly fallen behind in, but now an area where they're seen as a leader.

    I'm not in any way suggesting it was a one-way street - FIAT had nothing like the in-house software capability that produced uConnect, for instance - but that just makes my point that "product" benefits go further than just platforms or architectures.

    The big gain from FIAT's involvement wasn't even technology - it was that it provided financial stability. At the time of the first involvement back in 2009, FIAT had a pile of cash, and Exor was standing behind it with the promise of more if needed. That goes a long way when you're negotiating with suppliers, or trying to raise investment capital to re-start a major car making business. Would an institutional investor have lent "new Chrysler" ten billion dollars to rationalise and update its factories and invest in new products? I really don't think so, regardless of who was in the CEO seat.
     
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  13. MJAB

    MJAB Well-Known Member

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    I have to add that a "myth" have to be debunked.
    Fiat group was not in so big troubles in before Chrysler deal.

    Otherwise why in first months of 2009 was also trying to buy Opel from GM (they tried also in 2012)? How was it possible if it was in so big troubles as some thinks.

    It is very easy to check, there are the annual financial reports dating back 2007 (that includes also 2005 and 2006 main numbers).

    For example the net profit for year 2005, 2006, 2007 and 2008 were Euro 1,420 millions, 1,511 millions, 2,054 millions and 1,721 millions.
    In 2009 there was a net of loss Euro 848 millions. Trading profit was positive, Euro 1,058 millions, but down from the Euro million 3,362 of the 2008.

    Financial Reports | FCA Group (at https://www.fcagroup.com/en-US/investors/financial_regulatory/financial_reports/Pages/2007.aspx )
     
  14. T_690

    T_690 Well-Known Member

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    Problems for Fiat in Europe had started at the moment when almost all upper management was sent to North America and they didn't invest in new products. For example no new Fiat Punto.

    Even Sergio admitted 2 months before his death that it was a foolish call. They just didn't put much faith into Europe. He said that PSA's success has proven him wrong.
     
  15. Stéphane Dumas

    Stéphane Dumas Well-Known Member

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    I remember the attempts to get Opel as well as Suzuki, I digged and explored some older posts and articles about it.
    AN: Fiat, Chrysler...Suzuki? (at https://www.allpar.com/forums/threads/an-fiat-chrysler-suzuki.134138/ )
    http://www.autosavant.com/2009/05/01/chrysler-deal-done-fiat-now-wants-opel/

    Ironic to see by an unexpected twist then Fiat is now in bed with Opel thanks to Peugeot..
     
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  16. Dave Z

    Dave Z It's me, Dave
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    The great interiors came with a price - rattles.

    Generally, KrisW, I agree with you, right down to the problem of the Dart — trying to compete with compacts, when the car was darned close to midsize. Indeed, it seems to have more legroom than the smaller midsize cars. I like that personally but it gives weight and cost issues not helped by the fact that neither engine family was best in class. The Fiat motor is temperamental, noisy, vibration-prone, and somewhat unpredictable, while the “Chrysler” (Hyundai) motors were inefficient and had a less than ideal sound.

    Some of the people who came over were brilliant, some were not...

    The main problems Chrysler had with Fiat were quality never coming first, Sergio's extremism when it came to reacting to markets, and, I think, some sense by the Italians that Americans loved Italian cars. I don't think they ever really figured it out. Americans love Ferraris, from a distance. Americans love Maseratis, from a distance. Generally, few people considered Italian cars to be worthy of consideration. Alfa Romeo was only remembered by a few auto freaks and not fondly by half of them. Fiat itself was a joke. These were outdated stereotypes, perhaps, but they were pretty strongly felt by a lot of people. I was actually surprised by how strong they were, myself. I had driven a Fiat Uno in France and liked it. It was more reliable than the Renault I got in England last trip... in that everything worked. And really, the idea of selling cars with sex, you'd think it would work as it had in the 1970s, but it really didn't.

    If you ask whether I would have preferred Chrysler to be given a chance on its own, the answer is yes. If you ask whether the Fiat deal worked, I'd say probably, yes. Certainly it was night and day between Fiat and Daimler. Fiat brought jobs back, they brought factories back to life, they invested heavily in the US and Canada, and it paid off. In the end the GME appears to have been a happy joint effort and I'm looking forward to more GMEs.
     
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  17. MJAB

    MJAB Well-Known Member

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    If it was for me at that time I would only bring the Fiat 500 in the electric for California and sold only in the dealers in main crowded cities (since, if I am not wrong, in U.S.A. is not possible for an automotive group to have its on dealers or sell directly, but I could be wrong) + Abarth 500.
    I would prefer the Panda instead ... it is the same architecture of the Fiat 500.
    That for the obligation of high mileage car.

    I would bring also the Giulietta (that is 4 doors insead of two of Mito, and larger) but on revised architecture, but with dimensions of Giulietta for Dodge (or Chrysler).
    Engine the 1750 TBi DOHC direct gasoline injection (at the time had the cast iron block) about 235 CV.

    The best engines at that time were all diesels, 1.3, 1.6 and 2.0 Multijet. The others too small for U.S.A. since used in A and B segment cars.
    1.3 and 1.6 also sold to other companies like Suzuki.

    Instead of the 500 in Toluca was better to made the Doblò standard and long wheelbase (Ram Promaster City is long base version).
    Fiat LCVs have always been good enough vehicles.

    I don't even understand why they didn't make also the Fia Ducato motorhome base vehicle.
    Also this year Fiat Ducato Camper was named "Best Motorhome Base 2020" by the readers of "Promobil", a German specialist magazine. It is the 13th consecutive time.

    I also don't understand why they didn't manufactured Renegade / 500X (or Toro) ... companions for Dodge or Chrysler without rear McPherson but with torsion beam suspension that allows a bigger wider cargo space. They already had in 500L or the one similar to the Doblò that is in the Toro.

    As well I don't understand why there were no RAM version of the Iveco Daily (RWD, frame with C section side members, ... but also 4x4 version). End of 2014 or start of 2015 they presented the new versions, it has also the ZF 8 speed automatic ...
     
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  18. 77 Monaco Brougham

    77 Monaco Brougham Active Member

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    My own view is that Fiat's stewardship over The Chrysler Group" has been wildly successful. I remember that there were any number of doom-sayers on both Wall St. and Main St. at the time who were counting / had already counted Chrysler out.

    To be honest, I would have preferred if Magna had been able to do the acquisition, but that's just me.

    Compared to what had come before ("The Occupation" & "The Dogs From Hell Hedge-Fund"), I was more than thrilled that Fiat was able to see something in Chrysler that, somehow, the rest of the industry had missed.

    This wild, zany Roller Coaster ride we've been on these last 10 years has been a great many things...but...boring was not one of them!!;)
     
    #38 77 Monaco Brougham, May 6, 2020
    Last edited: May 6, 2020
  19. cygnus

    cygnus Well-Known Member

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    How can the plants in Michigan start back up the week of May 18th if we're under lockdown until the 28th?
     
  20. HWDan

    HWDan Active Member

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    I would even say as old as 2005 LX. Sure, cosmetics, electronics, body lines and bolt on parts have been upgraded over the years.

    Just ask 'Junkyard Dave' how little has really changed.

    When a guy more-or-less bolts on the front subframe (and rear subframe too) with engine, steering brakes suspension and all from a Challenger 392 Scat Pack, (yes Challenger) into a 2008 Magnum, including the dash, performance pages and all, and drive it around, I'd say not much has really changed in the platform as much they would like us to believe in 2011 and 2015.

    But I'm good with that, nothing bad at all with this platform since day 1. I have a 2005 Magnum and a 2017 Charger.

     

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