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Marchionne Not Surprised by Drop in Fiat Stock

CEO says FCA’s new headquarters will be in London.

by on May.09, 2014

FCA CEO Sergio Marchionne said he wasn't surprised to see "people take money off the table" after revealing the maker's five-year plan.

Just two days after FCA’s marathon session where the company laid out its plans for the next five years, CEO Sergio Marchionne dropped a bombshell that was left out of the meeting: FCA’s headquarters will be in London.

“My office will be in London. It has to be,” Marchionne told reporters at Chrysler Group office outside Detroit. “My office and my functions need to operate out of London. The board will meet there. That doesn’t mean I’m going to give up my operation responsibilities (in North America).”

Beyond the Headlines!

The operating headquarters for Fiat and Chrysler will remain in Turin and suburban Detroit respectively and the company’s key officers will be scattered around the globe and work from offices in Detroit, Turin and Brazil.

But for tax and legal reasons FCA itself will be based in Great Britain. Fiat SpA has been based in Turin since it was founded in 1899 and the move of FCA to London follows the path set by CNH Industries, which shifted it headquarters from Turin to an old Ford Motor Co. plant in Basildon, England.

In addition to the move, Marchionne also downplayed a 9% drop in Fiat stock the day after the plan was revealed.

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“I’m not surprised,” he said yesterday after a meeting laying out the five-year plan for CNH Industries. “It’s a bold plan. I’m not surprised some people took money off the table.”

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He added the secrecy around the plan was also very good, so the aggressive nature of plan clearly caught some investors off guard. In addition, Fiat also reported a loss of 319 million euros for the first quarter despite an increase in revenue. The loss was attributed to buying out of the United Auto Workers VEBA’s share in Chrysler.

FCA is looking for ways to attract more North American investors ahead of listing on the New York Stock Exchange, he noted. The company needs to attract more investors in the United States.

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Like Fiat, CNH Industries, a diversified maker of commercial trucks as well as agricultural and construction equipment, is controlled by holding company owned by the Agnelli family, the heirs of Fiat’s founders.

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One Response to “Marchionne Not Surprised by Drop in Fiat Stock”

  1. Jorge M. says:

    That seems like a very significant omission from the 5 year plan…