Sources tell Bloomberg News that Fiat Spa will spend as much as 9 billion euros ($12 billion) over the next three years developing new models for for the European market. The Italian automaker hopes the strategy will end losses on the continent and restore drastically underutilized Italian factories to profitability. Many of the new models will be based on either the Fiat 500 subcompact or the small, low cost Panda. A five door version of the 500 will replace the Punto. The Punto, last restyled in 2005, has long been a fixture in Fiat showrooms and as recently as 2007 it accounted for almost a third of the Fiat brand’s sales in Europe.
Though Fiat wants to use its Italian factories better, the Punto’s replacement will be built in Poland to save on costs. Sergio Marchionne believes that “made in Italy” works with upscale brands like Maserati and Alfa Romeo. The upcoming Maserati Levante SUV will be made in Fiat’s Mirafiori factory. Read More >
After Fiat and Chrysler’s retired UAW workers’ health care benefits trust were unable to agree on a price for the Voluntary Employees Beneficiary Association‘s 41.5% share in the Auburn Hills automaker, at the trust’s request Chrysler has filed initial paperwork for a public stock offering to sell part of the VEBA’s stake, about 16% of overall Chrysler shares, the first time in over a decade that the public will be able to own shares in Chrysler, which formerly was wholly owned by Cerberus and before that Daimler. Fiat certainly would rather the IPO not take place now as it complicates Fiat and Chrysler CEO Sergio Marchionne’s plans for the Italian automaker to acquire full ownership of Chrysler. The benefits trust has the legal right to force Chrysler to make the stock offering so the VEBA can cash out on the shares it received in exchange for giving up financial claims against Chrysler during the company’s bankruptcy and bailout by governments in the United States and Canada. Read More >
Once the merger he plans for Fiat and Chrysler goes through, Sergio Marchionne says that Fiat-Chrysler could be registered as a corporation in the Netherlands, not Italy or the United States. Marchionne wants to have the combined company’s primary stock listing on the New York Stock Exchange and rules for corporate governance in the Netherlands are similar to those in the States.
Fiat bought another 3.3 percent of Chrysler, “bringing it a step nearer to its goal of creating the world’s seventh-largest automaker by sales,” says Reuters. What Fiat really wants is to consolidate loss-making Fiat with profitable Chrysler, and to get “access to some of Chrysler’s cash flow for investments in new models,” the wire says. Read More >
Fiat launched a seven-seat version of its Fiat 500, a car that used to be known for its cramped space in the original model. Called the 500L Living (as in Living Room …), the seven seater “is about a meter longer than the classic 500,” writes Reuters.
Fiat can’t wait for a full merger with now again cash-rich and profitable Chrysler, but it will wait until its legal dispute with the UAW’s VEBA healthcare trust has been resolved. “We intend to wait for the Delaware verdict before moving forward on the merger” with Chrysler, Fiat Chairman John Elkann told Reuters. Read More >
“Italian Industry Minister Flavio Zanonato said he asked automaker Fiat to stay in Italy after its planned merger with Chrysler, which has led labor unions to fear it plans to move its headquarters to the United States.”
Fiat could be close to raising the cash needed to buy the rest of Chrysler, two people familiar with the matter told Reuters. Apparently, the money will not come from a sale of Alfa to italophile Volkswagen, as previously surmised, but from banks. But knowing banks, they probably won’t simply move the $4 billion across the counter. These days, they often just find a willing buyer for a hefty fee … Read More >
“It may require a miracle to pull off the Fiat chief’s latest gambit,” Reuters writes. To get Fiat out of its rut, Sergio Marchionne has a risky plan: “Take his sporty Alfa Romeo brand global with more expensive models and triple its sales volume by 2016 – after years of losses.”
That plan, says Reuters, “represents Fiat’s only real hope of combating a collapse in its home market and breathing new life into idled factories.” What if it turns out as a bust? “Should it fail, and the new cars flop, the company that Italians view as a cornerstone of their economy will have little choice but to put thousands of employees out of work and tip entire communities into turmoil.” Read More >
Alfa Romeo will outsell Fiat in the United States once the sporty brand gets a foothold in its new market, according to Peter Grady, head of network development for the Chrysler Group, in an interview Reuters. Read More >