Fiat Chrysler Automotive, the new name for combination of Fiat and Chrysler, will be carrying a lot of debt, Sergio Marchionne, the company chief executive officer warned during a conference call with analysts and journalists.
But the CEO of the newly merged and renamed automaker Marchionne insisted the debt is “benign” and required to press ahead with a broad corporate rejuvenation plan. Among Marchionne’s goal are the expansion of global sales of the Jeep brand, the broadening of the maker’s business in China and the rebuilding what was Fiat’s automobile business in Europe and elsewhere. Marchionne also wants FCA to be less dependent on “mass market” vehicles and instead sell more luxury models through its Alfa Romeo and Maserati channels.
Nevertheless, FCA reduced its guidance on 2014 profits, indicating net income will be 3.6 billion euros to 4 billion euros, or $4.9 billion to $5.4 billion. That’s well under the target set in 2012 for a profit of 4.7 billion euros to 5.2 billion euros. Fiat shares fell 4.1% on the news. (more…)