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Sorry, Says Marchionne for Italian-American Slur

Fiat/Chrysler apologizes for jest.

by on May.21, 2013

Fiat/Chrysler CEO Marchionne gets his point across -- but angers some listeners.

Fiat/Chrysler CEO Sergio Marchionne has apologized for using what some took as an offensive term for Italian-Americans during the Detroit Auto Show last January.

Describing his frustrations with the slow effort to return the Alfa Romeo brand to the U.S. market, Marchionne said the new 4C sports car didn’t have the right powertrain yet, adding that, “With all due respect to my American friends, it needs to be a wop engine.”

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The term was meant to convey the desire to have a distinctly Italian engine for the little Alfa – which ultimately won approval from Marchionne a few weeks later.


Mulally Makes Millions – Marchionne Zip – for 2011

Ford exec not limited by government oversight.

by on Mar.07, 2012

Ford CEO Alan Mulally had a good pay day this week.

Ford Motor Co. has clearly benefited from the fact that it was the only Detroit automaker to skip a government bailout.  So has its CEO Alan Mulally, who received a whopping $58.3 million in stock as part of a long-term incentive package.

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Many analysts believe Ford has drawn in a sizable number of customers willing to reward it for finding its own way through the industry’s worst downturn in decades – unlike its cross-town rivals.  But there was another penalty for taking government aid totaling around $85 billion during 2008 and 2009, the companies covered by the federal automotive bailout face strict limits on the compensation senior executive can make without Washington’s approval.


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.”


Fiat Ready to Raise Chrysler Stake to 30%

Italians may eventually own 51% majority.

by on Apr.06, 2011

CEO Sergio Marchionne appears ready to boost Fiat's stake in Chrysler to 30%.

Fiat is set to increase its ownership stake in Chrysler from 25% to 30%, and may soon boost that all the way up to 51%, according to industry sources.

The move will further cement ties between the trans-Atlantic alliance partners, and likely signals that the U.S. maker is getting closer to plans to stage an IPO that would return it to public trading – helping pay off its federal bailout in the process.

Fiat was granted a 20% stake in Chrysler following the American carmaker’s emergence from bankruptcy in mid-2009.  Government overseers then laid out a series of hurdles that would permit the Italians to boost their holdings in three 5% increments – and eventually add another 16% stake – for a potential total of 51%.

The first hurdle was cleared in January, with the launch of a new, fuel-efficient four-cylinder engine at the Chrysler plant in Dundee, Michigan.  That engine is currently being used for the Fiat 500 microcar but will have additional applications later.  This brought Fiat’s holdings to 25%.

The jump to 30% will come when two more objectives are met in the coming weeks, notes the Detroit Free Press.  First, Chrysler needs to report at least $1.5 billion in sales outside North America, where the vast majority of its business has traditionally been based.  But it must also line up an overseas distribution network.  Fiat has been aggressively signing up dealers and soon expects to have Chrysler represented by at least 90% of its Latin American retailers.

To get to 35%, the partners need to get to market with a product that gets a minimum 40 mpg in combined City/Highway driving.  Sergio Marchionne, who serves as CEO for both Chrysler and Fiat, has promised that by year’s end.

The final bump, to 51%, would be achieved by paying off the outstanding Chrysler debt to the U.S. and Canadian treasuries, a total of $7.2 billion.  Marchionne appears anxious to achieve that target – if for no  other reason than he believes that Chrysler is paying too high an interest rate.

Marchionne has not said whether he would wait until Fiat holds a majority stake before initiating the long-awaited Chrysler IPO.  The executive was encouraged by the success of the General Motors initial public offering, last November.  But in the wake of soaring fuel prices and other concerns automotive stocks, in general, have been faring poorly in recent weeks.  GM has notably been trading below the $33 IPO price.

Late last month, Marchionne outlined an optimistic scenario for Fiat and Chrysler, projecting the pair will see a big bump in revenues – to $141 billion by 2014.  But during Fiat’s stockholder’s meeting, the Canadian-educated executive also drop broad hints that the Chrysler IPO, originally expected in late 2011, might be pushed into the following year.

(For more on Marchionne’s forecast, Click Here.)

Detroit Rewards Salaried Workers With Big Bonuses

But could that touch off trouble with hourly employees?

by on Feb.14, 2011

Workers on and off Detroit's assembly lines will be seeing bonuses this year.

Chrysler Group and General Motors are using bonuses to reward salaried employees who survived the long, bitter recession.

Almost 11,000 salaried workers at Chrysler will receive an average bonus of $10,000, according to various reports.  But the planned handout may touch off a rift in the company’s ranks, according to employees familiar with the plans, who indicate many employees believe the rewards are inherently unfair and biased against blue-collar workers.

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Meanwhile, GM’s 26,000 white-collar workers will also see performance bonuses this year, the automaker has acknowledged. While GM hasn’t released its final financial report for 2010, the maker also appears to pay its 53,000 U.S. unionized hourly employees profit-sharing checks amounting to $3,000.

Ford has been relatively cautious on salaried pay, limiting raises but promising merit bonuses equal to 10% of base pay to select salaried employees.


Chrysler Reports $84 Mil Net Loss

But results exceed original forecast.

by on Nov.08, 2010

The Fiat 500 will begin rolling into U.S. showrooms by December.

Chrysler Group LLC reported an $84 million net loss for the third quarter of 2010, the only one of the domestic makers to go into the red during the July-September period.

But the maker’s results nonetheless exceeded expectations announced a year ago, in the months after Chrysler emerged from Chapter 11 protection.  And company officials are now projecting an operating profit of $700 million for the full year, up from an earlier outlook of $200 million.

The third-quarter results followed less than a week after Chrysler announced a 37% upturn in October sales, its seventh monthly increase in a row, and the biggest gain of any of the domestic Big Three. (October sales, Click Here.)

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Chrysler said its revenues for the third quarter totaled $11.02 billion, a 5.2% gain.  Excluding the cost of servicing the loans it has received from the U.S. Treasury as part of its 2009 bailout, Chrysler said it would have had a $239 million operating profit for the third quarter.


Chrysler Watching, Waiting On IPO

Marchionne not likely to approve stock offering until 2011.

by on Jul.26, 2010

Chrysler CEO Sergio Marchionne is taking a wait-and-see approach to a Chrysler IPO.

Chrysler CEO Sergio Marchionne says he’s keeping a close eye on rival General Motors’ planned IPO but likely won’t take his own company public again until at least 2011.

GM’s success could be a critical factor in Chrysler’s timing, said Marchionne, who also serves as CEO of the Italian automaker, Fiat, which took control of Chrysler following its emergence from bankruptcy in 2009.

“I want a full year of financial results” from Chrysler, Marchionne said during a session at the Walter P. Chrysler Museum honoring the U.S. maker’s former Chairman Lee Iacocca. “It also depends,” Marchionne added, “on how quickly and successfully GM’s stock offering goes.”

While GM has not officially announced its plans for an Initial Public Offering, a carefully orchestrated leak, last week, indicated it will make that details will be released mid-August, with the IPO expected to take place shortly before the November mid-term elections.  GM has been under intense pressure from the White House to take itself public again to help blunt criticism of the Obama Administration’s multi-billion dollar bailout of the two domestic automakers.

Marchionne’s caution is no surprise, industry analysts suggest.  Chrysler remains the most troubled of the Detroit makers and the one with the least certain future, despite its new ties to Fiat and the assistance of the federal treasury.


But the Italian-born, Canadian-educated executive has been sounding an increasingly upbeat tone, in recent months.  Just last week, Marchionne suggested there is a “substantial recovery” underway, and hinted that Chrysler will post black ink – pre-tax – for the second quarter of 2010, with the automaker looking to break even for the full year.  (Click Here for the full story.)


Marchionne: Chrysler Rushing New, Fiat-Based Models to Market

CEO believes U.S. maker on track to beat 2010 targets; IPO could be coming.

by on May.11, 2010

Chrysler/Fiat CEO Sergio Marchionne wants to rush more product into U.S. showrooms ASAP.

Desperately short of new product, Chrysler may get a helping hand from Italian partner Fiat sooner than originally planned, according to the man who heads both companies.

Several compact-based Fiats could be on the market by the end of the 2011 calendar year, said Chairman and CEO Sergio Marchionne, in a conference call.

Meanwhile, said the Canadian-educated Marchionne, Chrysler is on target to beat its financial targets for this year, which could make it possible to push for an IPO, or public stock offering, “as quickly as we can.”

After a series of significant setbacks, Chrysler has been reporting a smattering of positive news, including an unexpected first-quarter operating profit of $143 million and an April sales increase that was the maker’s biggest year-over-year gain since 2005.

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But analysts contend that the maker still needs an infusion of new models to truly move ahead.  The plan calls for relatively little in the coming months, though the replacement for the Grand Cherokee is considered a first critical step.


Chrysler Could Turn Profit in ’10, Says Marchionne

But turnaround will take 18% sales gain here and abroad.

by on Jan.12, 2010

Chrysler could very well pull off an operating profit in 2010, says CEO Sergio Marchionne, but it will take an 18% jump in sales during a year with little new product.

Though it won’t begin its anticipated product renaissance for more than a year, Chrysler could still pull off an unanticipated profit for 2010, CEO Sergio Marchionne suggested during a Tuesday meeting with reporters at the North American International Auto Show.

After hitting “rock bottom,” Marchionne, who also serves as chief executive of Fiat, said he expects 2010 to mark the beginning of a long, slow recovery for both the U.S. auto industry and for Chrysler.

“We’re out,” he said, referring to the worst downturn the American car market has seen since the Great Depression.  “We just need to be focused and to be sure we don’t fall back on our bad habits.”

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Having become lean and focused – and after having dumped billions in debt and bad assets during the two-month journey through bankruptcy, last spring – Marchionne said Chrysler could very well pull off a real profit in 2010.  And it would be an operating profit, not an account trick where the company didn’t include such minor inconveniences as taxes.

“The magic number is 1.65 million,” said the Italian-born executive, who spent much of his life across the border, in Canada.


Chrysler to Build Engines for Fiat 500

Automaker planning $179 million Michigan investment.

by on Dec.18, 2009

Chrysler will produce the engine for the North American Fiat 500 at a plant near Detroit, requiring a $179 million investment.

Chrysler will produce the engine for the North American Fiat 500 at a plant near Detroit, a move that will cost it $179 million.

Engines built in Michigan will be exported to Mexico for use in the North American version of the Fiat 500, starting in late 2011, according to Chrysler’s top executive.

Chrysler plans to launch production of a 1.4-liter inline-four engine at the company’s Global Engine Manufacturing Alliance plant, in Dundee, Michigan, by the end of 2011, said Chrysler CEO Sergio Marchionne.

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“This is one more important step forward that demonstrates our intent to deliver on the promise of the Fiat-Chrysler strategic alliance and the substance of the road map we laid out in November,” Marchionne said.