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Fiat Expects to Finish Ferrari Spinoff Next Summer

IPO part of a plan to grow FCA globally.

by on Nov.14, 2014

Sergio Marchionne told reporters in Italy that the Ferrari IPO will now happen in the second or third quarter of 2015.

The Ferrari initial public offering is now expected to be complete between the second and the third quarter of 2015, Fiat Chrysler Automobiles Chief Executive Sergio Marchionne told reporters in Italy.

FCA announced last month it planned to spinoff Ferrari from the group, selling a 10% stake via a public offering and distributing the rest of FCA’s stake in Ferrari to its shareholders. The Ferrari IPO is expected to raise $5 billion to reduce FCA’s debt and bolster the company’s balance sheet.


The spinoff is part of a bigger capital-raising plan that also includes a $2.5 billion convertible bond issue to help cut debt and fund an ambitious business plan aimed at turning FCA into a global carmaker. (more…)

Tesla, Chrysler Get into Sniping Match

Makers dispute who paid off the government first.

by on May.23, 2013

Tesla CEO Elon Musk boasts his automaker was first to completely pay off its federal loans.

It began with a seemingly innocuous statement from Tesla Motors but has quickly escalated into a spitting match with Detroit’s third-largest automaker, Chrysler.

On Wednesday, the battery-car start-up announced that it would pay back the remaining $451.8 million that it owes the U.S. Energy Department nine years ahead of schedule, using money it expects to raise from an upcoming, $1.1 billion stock offering.

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That prompted the irrepressible Elon Musk, the constantly tweeting Tesla CEO, to declare that Tesla will become “the only American car company to have fully repaid the government.”

Or will it? Not according to Chrysler.


Chrysler Back in the Finance Game

Plan could improve sales, cut costs for dealers.

by on Feb.11, 2013

Chrysler hopes to move more sheet metal -- like this 2014 Jeep Grand Cherokee -- with the help of its new finance operation.

Chrysler will soon be back in the financial services business for the first time since its 2009 bankruptcy.

The maker will launch launch a new partnership with Santander Consumer USA Inc., of Dallas, this coming spring to offer “a full spectrum of auto financing services to Chrysler Group and FIAT customers and dealers under the name Chrysler Capital.”

The move, company officials hope, will make it easier to compete with the likes of Ford and Toyota which turn to their in-house financial services subsidiaries to help offer affordable credit to customers – and more competitive financing alternatives for dealers.

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“We expect Chrysler Capital to help Chrysler Group continue its sales growth by offering consumers the most competitive and innovative retail purchase and lease financing available in the marketplace,” said Peter Grady, Vice President of Network Development and Fleet for Chrysler Group, following a meeting with retailers at the National Auto Dealers Association’s annual meeting in Orlando, Fla.


Chrysler Seeking New Finance Partner

But maker has no plans to start its own finance unit again.

by on May.01, 2012

Sergio Marchionne doesn't want to ally with Ally.

Chrysler Group is looking for ways to change another part of the bailout plan originally imposed by the Obama administration’s auto czar while the company was facing bankruptcy three year ago.

Chrysler has notified Ally Financial Inc. it will not renew its current operating agreement with the lender when it expires in April 2013.  It will seek to form a relationship with another source of financing for customers and dealers but Sergio Marchionne, Chrysler’s chief executive officer, said the maker has no plans to try and restart its own captive finance company.

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Chrysler actually may give up some profits produced by a captive finance company. But not having a captive finance company also removes the ever present temptation to use the subsidiary to produce short-term profits by taking unsustainable risks.

“It won’t pollute the industrial company,” noted Marchionne, who did not rule out signing a new agreement with Ally that includes modified terms.


Chrysler Withdraws Federal Green Car Loan Request

“Why am I bothering?”

by on Feb.17, 2012

Chrysler/Fiat CEO Sergio Marchionne hinted to reporters at the 2012 Detroit Auto Show he might withdraw the DoE loan application.

Chrysler Group LLC has withdrawn its application for an Advanced Technology Vehicles Manufacturing loan from the U.S Department of Energy.

The maker originally had hoped to receive as much as $7 billion through the program, designed to assist in the development of advanced, high-mileage powertrain technologies – in the process reducing U.S. dependence on imported petroleum.  It applied shortly after emerging from bankruptcy in 2009, but distribution of funds has largely been put on hold as the ATVM program has become caught up in Washington’s increasingly partisan politics.

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Ford was able to secure a loan, as was Japanese automaker Nissan and a number of solar panel manufacturers and battery companies.  However, the loan program, which was signed into law by President George W. Bush in 2007, has come in for heavy criticism from tea party Republicans after the bankruptcy of Solyndra, a Calfornia-based solar panel manufacturer, which received a $500 million loan.


Chrysler Celebrates “Second Chance”

Despite skeptics, maker “dared to dream big,” pays off $7.5 billion in federal loans.

by on May.24, 2011

It's "the end of the beginning," said Marchionne, after announcing Chrysler had completely paid off its government loans.

Despite the “skeptical and patronizing looks” of those who placed a “death sentence on our company,” Chrysler CEO Sergio Marchionne suggested the automaker has proved it is both a viable and competitive player in the global auto industry.

The executive, who also runs Chrysler’s Italian partner, Fiat SpA, tried to maintain a low-key tone Tuesday as he announced the long-troubled American automaker had officially paid back the $7.5 billion it owed the U.S. and Canadian treasuries – six years earlier than it was required to under the terms of the bailout it received in 2009.

But speaking to an overflow audience of reporters, workers and dignitaries at the Sterling Heights Assembly Plant, in suburban Detroit, it was obvious that Marchionne wanted the event viewed as a critical transition point for Chrysler.

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The Canadian-educated executive heaped plenty of praise on the White House, and particularly President Barack Obama, who decided to offer Chrysler a bailout despite significant opposition within his administration.

“We were encouraged by the fact that someone believed in us,” said Marchionne, adding “it happens rarely in life you’re given a second chance.”


Chrysler To Pay Back $7.5 Bil in Government Loans Next Week

No more "Government Motors"?

by on May.19, 2011

Fiat/Chrysler CEO Marchionne.

Chrysler is expected to confirm today it has lined up new financing that will allow it to repay next week the nearly $7 billion in government loans it received as part of its 2009 bankruptcy.

Chrysler CEO Sergio Marchionne has said he had hoped to repay the $5.9 billion owed to the U.S. Treasury and another $1.6 billion provided by Canada before the second anniversary of the maker’s emergence from bankruptcy protection, in June 2009.

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The move will allow Chrysler’s Italian partner, Fiat SpA, to quickly increase its stake in the U.S. maker to 46%, and that is expected to jump to 51% before year’s end.  In fact, Fiat has given recent indications it would like to push its share in the long-troubled Chrysler to as high as 70% and may even skip the planned IPO that would have resumed public trading in Chrysler stock.


Chrysler Intends to Repay Fed Loan by June 10

CEO Marchionne wants to beat 2nd anniversary of bankruptcy.

by on May.09, 2011

Chrysler CEO Marchionne wants to pay back bailout loans before 2nd anniversary of bankruptcy.

Chrysler CEO Sergio Marchionne is hoping to write a couple checks that will add up to $7.5 billion – and he hopes to have the ink dry before June 10th, the second anniversary of the automaker’s emergence from Chapter 11 bankruptcy protection.

“We will repay every dollar that was lent to us by the American and Canadian governments, with interest,” Marchionne said, during a commencement speech to 900 students graduating from the University of Toledo.

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Marchionne confirmed that Chrysler would pay back the loans, late last month, though he initially didn’t set a timeline.  Chrysler first had to line up alternative lenders to cover the debt.

The move has both symbolic and very real value.  Chrysler is still struggling to overcome the stigma of having gone into bankruptcy, emerging only with the help of a multi-billion bailout from the U.S. and Canadian governments.  Paying off the loans – immediately after posting a $116 million first-quarter profit, its first since going bankrupt – would be a sign of an impending turnaround.


Marchionne Outlines Plan to Repay Chrysler’s Loans

Move takes maker step closer to IPO.

by on May.02, 2011

Why is this man laughing? Sergio Marchionne outlines details of the government loan payoff.

Chrysler will use a mix of loan money, new debt securities and a line of credit to repay the $7.5 billion it owes to the U.S. and Canadian governments, the maker announced today, providing the first details on a payback plan first announced last week.

At about the same time, the U.S. maker’s Italian partner, Fiat SpA, will invest $1.27 billion in order to increase its stake in Chrysler from 30% to 46%.

Sergio Marchionne, the CEO of both automakers, has indicated he expects to meet another hurdle set by the 2009 federal bailout to add yet another 5% stake, which would give Fiat a full 51% share of Chrysler.  Sometime after that, depending on Chrysler’s financial health and the strength of the stock market, the maker is expected to stage an IPO that would mark its return to public trading.

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Details of the loan repayment were announced today at the same time Chrysler revealed it has earned $116 million during the first quarter of 2011, its first net profit since emerging from bankruptcy in June 2011.  (For more on Chrysler’s earnings report, Click Here.)

The goal is to pay off $5.8 billion owed to the U.S. government by June 30th, along with another $1.7 billion due to the Canadian treasury.  Alternative financing will come from three components:


Chrysler Posts First Profit Since Bankruptcy

“Gaining momentum,” proclaims Marchionne of $116 mil net.

by on May.02, 2011

Chrysler/Fiat CEO Sergio Marchionne during a visit to the minivan plant in Windsor, Ontario.

Chrysler Group LLC reported $116 million in net income for the first quarter of 2011, marking the first time the long-troubled Detroit maker has been in the black since it emerged from Chapter 11 protection in June 2009.

By comparison, Chrysler reported a $197 million loss during the first three months of 2010.  The maker has been struggling to reverse its fortunes even as it has come under the increasing control of Fiat SpA.  The Italian maker was given a 20% stake following Chrysler’s emergence from bankruptcy.  That stake is now 30%, and is expected to reach 46% as soon as executes a plan to pay off its government loans.

“Chrysler Group’s improved sales and financial performance in the first quarter show that our rejuvenated product lineup is gaining momentum in the marketplace and resonating with customers,” said Sergio Marchionne, Chief Executive Officer of both Chrysler and Fiat, in a prepared statement.

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“These results,” the executive added, “are a testament to the hard work and dedication of our employees, suppliers and dealers, all of whom are helping Chrysler create a new corporate culture built on the quality of our products and processes, and simple, sound management principles.”