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Marchionne says Chrysler alliance is crucial to Fiat’s future

by Bill Cawthon on

Reuters reports that Sergio Marchionne told a parliamentary hearing that the alliance with Chrysler was crucial for the Fiat group’s future and repeated his commitment to maintain a strong presence in Italy.

“It’s not only true that Fiat saved Chrysler but also that Chrysler is determining for the group’s future,” Marchionne said. “We are strengthening our product range and widening our horizon.”

Yesterday’s hearing followed Marchionne’s Saturday meeting with Prime Minister Silvio Berlusconi and other government officials concerned about the CEO’s recent comments about possibly relocating Fiat’s headquarters to the United States and about the future of his “Fabbrica Italiana” investment program potentially worth $27 billion in plant upgrades and modernization.

Marchionne affirmed his desire to make the Italian investments but hedged his bets about a future corporate base location even though Fiat chairman John Elkann had earlier promised Turin mayor Sergio Chiamparino that Fiat’s headquarters would remain in the Italian city.

During Tuesday’s hearing, Marchionne said there would be no decision on the headquarters until after Fiat and Chrysler have been merged. Marchionne has said previously that likely would not happen until 2014. He did admit there could be a governance problem after Chrysler has its initial public offering.

“We hope to list Chrysler in the near future,” Marchionne told the audience. “With two listed companies there will be a governance problem but the choice on the legal base of the company has not yet been taken.”

Marchionne said “Fiat is a part of this country. It has no intention of leaving Italy.” However he also said Italian factories must be more competitive and Italian unions must be more cooperative. Italy currently does not produce a profit for Fiat and the company’s Italian factories are losing money. Marchionne will close one plant, Termine Imerese in Sicily, and has won new labor contracts at the Mirafiori plant in Turin and the plant at Pomigliano d’Arco near Naples.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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