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Marchionne Downplays Threat to Fiat-Chrysler Merger

CEO willing to wait out opponent shareholders,

by on Aug.06, 2014

CEO Sergio Marchionne is confident any shareholder backlash will only be a temporary roadblock.

Disgruntled Fiat shareholders could –  temporarily – thwart the completion of the Fiat-Chrysler merger, Sergio Marchionne, chief executive officer of both the Italian and American automakers, conceded.

During a conference call today with analysts and journalists, Marchionne emphasized that an adverse vote would not have a long-term impact on the meshing of the two companies.

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“We have to see how this game plays out,” Marchionne said during the call. “I am absolutely unfazed by this.”

With Italy teetering on the brink of recession and Fiat stock losing value, speculation is mounting that some Fiat shareholders may opt to cash out rather than accept stock in the new company.

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Chrysler Could Delay IPO Until Next Year

That’s if it isn’t canceled entirely.

by on Oct.03, 2013

Chrysler CEO Sergio Marchionne with former UAW President Bob King who ran the union when it received its stake in Chrysler.

Plans for an initial public offering of Chrysler stock could be delayed until next year, Sergio Marchionne, the CEO of both Chrysler and its Italian partner Fiat now says.

Speaking to reporters during a visit to his hometown in Italy, Marchionne cautioned that he doesn’t know if work on the planned IPO can be completed before the North American International Auto Show in Detroit next January.

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An IPO is “technically possible” in 2013 though it is increasingly likely to require waiting until 2014, according to the CEO. And that’s if one takes place at all.  Though Marchionne initially expressed interest in offering Chrysler shares after Fiat came to the rescue of the U.S. automaker in 2009, he has since shied away from that approach, indicating a preference for having Chrysler completely taken over by its European ally.

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Chrysler Earnings Jump 16% – Give Boost to Italian Partner Fiat

But production issues, recalls, were costly problems

by on Jul.30, 2013

Fiat/Chrysler CEO Sergio Marchionne.

Despite paying a heavy price for a string of recent recalls, Chrysler Group LLC reported a 16% increase in earnings during the second quarter of 2013 and the company’s chief executive said he expects even stronger numbers during the second half of the year – though earnings are still expected to fall short of earlier expectations..

But Chrysler earnings would have been even stronger were it not for a major recall to address a Jeep safety issue as well as production shortfalls. Even so, the Detroit maker’s results were enough to provide a much-needed boost to its Italian partner Fiat which quadrupled its own net income for the second quarter despite ongoing problems in its home European market.

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The automaker posted net income of $507 million, compared to $436 million during the same quarter a year earlier. The second quarter marked Chrysler’s eighth consecutive quarter of positive net income. Net revenue increased 7% to $18 billion and Chrysler’s operating profit also increased 7% to $808 million from $755 million a year ago.

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Chrysler More than Doubles Q2 Earnings

Make could “overshoot” profit target for 2012, says Marchionne.

by on Jul.30, 2012

Good news from Chrysler today for CEO Sergio Marchionne but things aren't likely to be so rosy when partner Fiat reports earnings on Tuesday.

Chrysler Group LLC reported a 141% improvement in its adjusted net income during the second quarter and a 23% increase in revenue over last year’s levels.

The company said preliminary second-quarter financial results, including net income of $436 million, show an $806 million improvement from the $370 million net loss in the same quarter last year, which had included a $551 million charge related to repayment of its government bailout loans.

Excluding the charge, net income increased $255 million, or 141%, period over period, as the company continues to achieve its business targets and improve sales across all brands, Chrysler said. The maker repeated earlier guidance saying it remains on track to report net earnings of $1.5 billion for all of 2012 – and an operating profit of $3 billion.

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“Our results reflect a tireless pursuit by the people of Chrysler Group to deliver the very best quality and value across our brands,” said Sergio Marchionne, Chrysler Group LLC chairman and chief executive officer, who now expects the automaker’s profits to exceed $1.5 billion for the full year. “Together, we are always striving to achieve more, to learn from the past and build upon our successes.”

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Fiat Open to More Projects With Mazda

More projects with Mazda are possible, hints Marchionne.

by on May.25, 2012

Fiat/Chrysler CEO Sergio Marchionne inspects the Belvidere Assembly Plant.

Already controlling a majority of Chrysler stock, Italian automaker Fiat SpA expects to further increase its holdings in its U.S. partner by mid-summer, according to the man who serves as CEO of both manufacturers.

Meanwhile, Chief Executive Sergio Marchionne told reporters that there is a possibility Fiat might find opportunities to further expand its nascent relationship with Japan’s Mazda Motors. The two manufacturers announced plans to jointly develop a pair of affordable roadsters this week.

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One possibility is that Fiat or Chrysler might produce vehicles for the Japanese maker which is abandoning the suburban Detroit assembly plant it long ran in partnership with former ally Ford Motor Co.

“I would be willing to build Mazdas anywhere in the world where we have capacity,” including Chrysler plants,” said Marchionne, after leading reporters on a tour of the Belvidere, Illinois assembly plant now building the new Dodge Dart.

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Chrysler Delivers Best Earnings in 13 Years

Q1 profit beats all of 2011.

by on Apr.26, 2012

Chrysler is "maintaining its focus," says CEO Sergio Marchionne, after announcing $473 million in profits.

Barely three years after it plunged into bankruptcy, the Chrysler Group is reporting its biggest quarterly profit in 13 years, its $473 million in earnings more than the automaker made for all of last year.

The uptick in earnings reflects the maker’s strong sales for January – March period when demand for Chrysler products rose 39%, handily outpacing the U.S. auto industry as a whole.  But Chrysler also benefited from significant interest savings after having paid off its remaining federal bailout loans.

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“Another positive quarter…is affirmation that the Chrysler team is maintaining its focus,” said Sergio Marchionne, CEO of both Chrysler and Fiat, the Italian automaker that assumed control after the American maker emerged from Chapter 11 protection.

Chrysler’s first-quarter earnings were more than four times the $116 profit posted during the first quarter of 2011 – and the biggest figure since the maker reported a $682 million profit during the third quarter of 1998.

But there are some significant differences between then and now.  In 1998, Chrysler’s product portfolio was largely focused on pickups, SUVs and minivans.  While light trucks are still important to the maker, it is now increasingly focused on passenger cars, such as the full-size Chrysler 300C and midsize 200 sedan, as well as the new Dodge Dart it is preparing to launch.

The introduction of the Dart, which is largely based on the platform of the European Alfa Romeo Giulietta, is a “true melding of Chrysler’s and Fiat’s engineering and styling strengths,” said Marchionne. It is likely to become a major test of the alliance between the makers, Fiat now controlling 58.1% of Chrysler stock and planning to push that to more than 70% in the near to mid-term.

Chrysler’s first-quarter performance was buoyed not only by strong sales but a jump in its average transaction price, or ATP, consumers spending about 5% more per vehicle, at $29,234, according to the data tracking service TrueCar.com.

“Chrysler gained 2 full percentage points of US market share compared to a year ago, while increasing their transaction prices and lowering inventory turn times significantly –all resulting in a much improved bottom line,” said Jesse Toprak, Vice President of Industry Trends and Insights at TrueCar.com, who added that Chrysler should get, “full credit for having the most desirable line up of vehicles that they have ever had in their showrooms.”

For the quarter, Chrysler Group revenues rose 25% to $16.4 billion.

There is significant competition in today’s automotive market but the market also continues on an upswing that, barring another economic meltdown should see overall new vehicle sales reach 14 million for 2012, at least 1 million above 2011’s numbers.  Chrysler is expected to maintain its sales and revenue growth, especially if it can hold onto its current market share, 11.5% compared to 9.4% for all of 2011, analysts forecast.

Also assisting its earnings surge, Chrysler is now paying less to borrow money after getting out from under the terms of its federal bailout.  Having paid off its remaining government loans last May it saved $71 million in interest charges during the first quarter, it revealed.

Chrysler received $12.5 billion in assistance from the government before, during and after its emergence from Chapter 11.  The U.S. Treasury has recouped $11.2 billion of that and has written off the remaining $1.3 billion.

The maker does have a number of challenges ahead.  It has to successfully launch the new Dodge Dart, which not only goes up against traditional compact segment leaders like the Toyota Corolla and Honda Civic, but also new domestic challengers such as the Ford Focus and Chevrolet Cruze.

The first-quarter surge in fuel prices – now near record levels in most U.S. markets – could further weaken demand for the pickups and SUVs that remain a core part of the Chrysler line-up. The automaker has been hoping to offset that with updated designs and advanced powertrains, such as the more fuel-efficient V-6 it will offer in the 2013 Ram 1500 truck.

One of the biggest challenges remains the need to build Chrysler’s presence overseas.  It can no longer count on the North American market, Marchionne readily acknowledges.  The maker is now supplying a number of models to European dealers – though they are being sold there through various Fiat brands.

Meanwhile, Chrysler has a number of offerings on display in Beijing this week at the huge Auto China 2012 auto show.  It marks the return to what is now the world’s biggest automotive market.

Marchionne Takes Home $0 from Chrysler – but $18.9 mil from Fiat

The night job pays off.

by on Mar.15, 2012

Why is this man smiling? An $18.9 million paycheck certainly helps.

In an era of executive excess, Chrysler CEO Sergio Marchionne made headlines, earlier this month, when it was reported he took no compensation for his work at the U.S. automaker last year.  That was all the more impressive compared to the news, that same day, that Ford Chief Executive Alan Mulally had received $58.3 million in stock alone for 2011.

But for those wondering how deeply Marchionne might have to dig into his pockets to cover the reported $3.5 million home he recently purchased in the Detroit suburbs there’s no reason to worry.  While he didn’t get money from Chrysler he did more than okay wearing his other hat, as CEO of the U.S. maker’s Italian partner Fiat.

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In all, Marchionne took home 14.5 million Euros, or $18.9 million,  last year, including $3.2 million in salary and another $15.69 million in stock that vested last year.  Major companies like Ford and Fiat like to use stock as an incentive, the argument being that with enough shares an executive like Marchionne or Mulally will be motivated to maximize investor value.

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Chrysler Stock Offering on Indefinite Hold

“It’s not imminent,” says Marchionne.

by on Mar.07, 2012

The long-awaited Chrysler IPO isn't likely to happen anytime soon, cautions CEO Sergio Marchionne.

Analysts and potential investors who’ve been waiting for a Chrysler stock offering are going to have to keep waiting – possible for quite some time, the maker’s CEO is cautioning.

After Italian automaker Fiat effectively took control of the U.S. maker following its 2009 bankruptcy, Sergio Marchionne signaled he would stage an Initial Public Offering in relatively short order.  The IPO has since been pushed back repeatedly by Marchionne – CEO of both Fiat and Chrysler.

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In a Detroit radio interview, the Canadian-educated executive this week said he will not authorize the stock offering until the time is right.  In fact, he told an Italian newspaper last month, that Chrysler just might skip the IPO entirely.

“It’s not imminent,” Marchionne told Detroit talk station WJR when asked about when Chrysler might take itself public again.

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Chrysler Reports 1st Full-Year Profit Since 1997

“Modified” operating profit hits $2.0 billion; net at $183 million.

by on Feb.01, 2012

Chrysler/Fiat CEO Sergio Marchionne meets with reporters at the 2012 Detroit Auto Show.

For the first time since 1997, Chrysler has ended the year in the black with a net profit of $183 million and a “modified” operating profit of $2.0 billion, the automaker reported this morning.

After standing widespread predictions of its demise on their head, Chrysler now is  predicting another strong performance in 2012, including a double-digit gain in revenue and a 50% increase in operating income.

The figures come as a sharp turnaround for a company that declared bankruptcy less than three years ago and which survived only after receiving a more than $12 billion bailout from the U.S. Treasury.  But the Chrysler of today, now controlled by Italy’s Fiat, is a decidedly different manufacturer that went into Chapter 11 protection shortly after the collapse of a failed merger with Daimler AG of Germany.

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“The house is in good order. We are proud of the work we’ve done,” said Sergio Marchionne, who serves as Chief Executive Officer of both Chrysler Group LLC and Fiat SpA. “Now we greet a new year of high expectations with our heads down, forging ahead and focused on executing the goals we’ve set for ourselves as a company.”

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No Diesels for Small Chryslers, Says Marchionne

Fiat not interested in acquiring Opel.

by on Jan.12, 2012

While the Jeep Grand Cherokee is set to get a new diesel, Chrysler won't be using the high-mileage technology in its small cars.

Chrysler will begin building the diesel version of the Jeep Grand Cherokee at the Jefferson North assembly plant in Detroit early in 2013. But Fiat/Chrysler chief executive officer Sergio Marchionne said he doesn’t expect diesel engines to move from large trucks and SUVs into smaller passenger cars in the U.S.

The necessary emission controls make the engines too expensive, Marchionne said during an appearance at the Automotive News World Congress. The Canadian-born executive also said Chrysler won’t begin preparing the Jefferson North plant to build a new Maserati SUV — using a Ferrari engine — until 2013 and dismissed speculation Fiat could be lining up to make a bid for Opel.

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He also said the industry has a social responsibility to improve fuel economy. “The fuel efficiency challenge is one of the biggest issues facing the industry, and not just because of daunting government regulations. As an industry, we need to look beyond the narrow interests of our industry and embrace ecological responsibility because we owe it to future generations,” he said.

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