Breaking Up Isn't Hard to Do: Fiat Chrysler Announces Parts Division Spin-off

Steph Willems
by Steph Willems
breaking up em isnt em hard to do fiat chrysler announces parts division spin off

As Magneti Marelli prepares for its 100th birthday next year, the Italian parts supplier can expect to mark the occasion while newly single.

In a bid to streamline its operations, Fiat Chrysler Automobiles has announced it is moving forward with a plan to spin off the weighty subsidiary. The split should be complete by the end of this year or early next.

Magneti Marelli manufactures numerous automotive components, from lighting to powertrain parts to electronics, and employs roughly 43,000 workers in 19 countries. Dozens of manufacturing plants exist under its umbrella. Started as a joint venture between Fiat and Ercole Marelli in 1919, the company officially became a Fiat subsidiary in 1967.

According to Reuters, analysts estimate the division’s net worth at between 4.4 and 6.1 billion dollars.

Early Thursday, FCA issued a statement saying its board of directors had “authorized FCA management to develop and implement a plan to separate the Magneti Marelli business from FCA and to distribute shares of a new holding company for Magneti Marelli to the shareholders of FCA.” The company’s shares will be listen on the Milan stock exchange.

FCA CEO Sergio Marchionne stated that spinning off the division will “deliver value” to FCA shareholders and put Magneti Marelli in a position for growth. “The spin-off will also allow FCA to further focus on its core portfolio while at the same time improving its capital position,” he said.

The parts business was just one of the pieces of the FCA pie rumored to separate from the flock last year. Alfa Romeo and Maserati were included in this list, but Marchionne squashed murmurs of the brands’ impending spin-off. The same rumors circulated around Jeep after reports emerged Chinese automakers expressing interest in acquiring the brand. Jeep, Marchionne said, is not for sale.

FCA remains on a fairly aggressive debt-cutting spree, with the automaker hoping to finish the year in the black.

[Image: Fiat Chrysler Automobiles]

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  • Ect Ect on Apr 05, 2018

    "automaker hoping to finish the year in the black." Huh? FCA has been and is in the black. 2017 net profit, for example, was €5 billion.

  • Ohioeric Ohioeric on Apr 07, 2018

    Didn't work out so well for Delphi from GM or Visteon from Ford. Third time is a charm? I doubt it.

  • Fahrvergnugen NA Miata goes topless as long as roads are dry and heater is running, windscreen in place.
  • 3SpeedAutomatic As a side note, have you looked at a Consumers Report lately? In the past, they would compare 3 or 4 station wagons, or compact SUVs, or sedans per edition. Now, auto reporting is reduced to a report on one single vehicle in the entire edition. I guess CR realized that cars are not as important as they once were.
  • Fred Private equity is only concerned with making money. Not in content. The only way to deal with it, is to choose your sites wisely. Even that doesn't work out. Just look at AM/FM radio for a failing business model that is dominated by a few large corporations.
  • 3SpeedAutomatic Lots of dynamics here:[list][*]people are creatures of habit, they will stick with one or two web sites, one or two magazines, etc; and will only look at something different if recommended by others[/*][*]Generation Y & Z is not "car crazy" like Baby Boomers. We saw a car as freedom and still do. Today, most youth text or face call, and are focused on their cell phone. Some don't even leave the house with virtual learning[/*][*]New car/truck introductions are passé; COVID knocked a hole in car shows; spectacular vehicle introductions are history.[/*][*]I was in the market for a replacement vehicle, but got scared off by the current used and new prices. I'll wait another 12 to 18 months. By that time, the car I was interested in will be obsolete or no longer available. Therefore, no reason to research till the market calms down. [/*][*]the number of auto related web sites has ballooned in the last 10 to 15 years. However, there are a diminishing number of taps on their servers as the Baby Boomers and Gen X fall off the radar scope. [/*][/list]Based on the above, the whole auto publishing industry (magazine, web sites, catalogs, brochures, etc) is taking a hit. The loss of editors and writers is apparent in all of publishing. This is structural, no way around it.
  • Dukeisduke I still think the name Bzzzzzzzzzzt! would have been better.
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