In June 2009, Fiat was handed 20 percent of a washed and rinsed Chrysler for no cash, and despite protests, the deal was rammed through. The UAW was given 55 percent, the U.S. and Canadian governments controlled 8 and 2 percent, respectively. Often overlooked, or forgotten, the deal came with an option for Fiat to raise its stake to 35 and eventually as high as 51 percent if it meets some rather vague financial and developmental goals, hashed out with the U.S. government.
Sergio Marchionne thinks the goals are met. He plans to increase Fiat’s holdings in Chrysler to 35 percent within two years, says Reuters.
“There are three steps of five percent,” Marchionne told a press conference after the group’s shareholder meeting. “We will add 15 percent within 24 months.”
According to Sergio, the launch of the Fiat 500 in the United States in this year suffices as meeting the goals.
As for Fiat’s own outlook, it’s hazy. After a loss in 2009, they want to be “near breakeven” when the end of 2010 comes around, Marchionne said. In other words: They’ll write another loss.
Fiat is dealing with a difficult 2010 at home and in the near abroad. The Italian government scrapped their cash for clunkers program, which was a shot in the arm of domestic Fiat sales. Fiat was very successful in Germany during the Abwrackprämien heydays, but the party is over and sales are down. Marchionne thinks car sales in Europe will contract by 15 percent this year back to 1994 levels, and will take about four years to get back to their pre-crisis glory. Most market observers will not disagree. Some think, Sergio is an optimist.