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SM: Selling one brand would erase debt; Asian ties

by David Zatz on

Sergio Marchionne, responding to questions after today’s financial call, pointed out that while the company has a hefty amount of debt, that selling a single unit would erase it. He gave Ferrari as an example, saying that while it would be a poor decision in the long term, the sale of the brand would wipe out all of Fiat Chrysler Automobile’s (FCA’s) debt.


Mr. Marchionne had emphasized during the presentation that the company’s debt was manageable, which Chrysler in a “net cash” position for the first time since 2009, and pointing out that the company was refinancing with its debt longer terms to avoid short-term pressures.

He also responded to a question about finding a new Asian partner by saying that it would not be difficult, citing their strong relationship with a Chinese company for local Jeep manufacturing; he also said they “remain totally open to any ways in which we could strengthen our competitive position,” and said they were in “continuous dialogue” with other automakers on special projects, though none were particularly likely at the moment.

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304

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