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Marchionne on the money

by Bill Cawthon on

While most attention was focused on the new Ram pickups, Fiat Chrysler CEO Sergio Marchionne said the company could hit a major milestone by mid-2018.

After years of being heavily debt-laden, Fiat Chrysler Automobiles could be net cash positive by June, Marchionne told reporters at the North American International Auto Show in Detroit. Marchionne added that he still expects the company’s net industrial debt to be mostly eliminated by the end of 2018.

The payoff would come after years of strict fiscal discipline and the pursuit of profit that saw new products delayed or cancelled and slashing of the fleet sales that accounted for a significant chunk of total turnover.

From the most fleet-dependent Detroit automaker, FCA US has become the least dependent on fleet deliveries. While FCA’S total fleet percentage of 19.4% was slightly higher than General Motors’ 19.2% it was much lower than Ford’s 29.0%. From an average of 26% of total sales in the first quarter of 2017, fleet business dropped to an average of 14.6% in the fourth quarter.

FCA’s stock has also had a standout performance over the past three years, with the trading price rising 201% compared to a 24% increase in GM’s stock value and a 13% decline in the value of Ford shares.

In other comments, Marchionne said Fiat Chrysler is no longer seeking a merger partner or buyer. Responding to a question from a reporter for Italian financial newspaper Il Sole 24 Ore, Marchionne said, “We no longer need anyone.”

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 just-auto.com, 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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