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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.

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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…)

Fiat Profits Plunge 55%

CEO Marchionne points to runaway incentives costs.

by on Jul.30, 2014

FCA CEO Sergio Marchionne said the automaker needed to have great results in the next two quarters.

Fiat says its second-quarter profits plunged 55% as the maker’s U.S. partner Chrysler struggled to move old product with new incentives, while the Fiat side of the company dealt with a slowdown in South America.

Fiat, which expects to complete its takeover of the U.S. maker in October, earned a net profit of 197 million Euros, or $264 million, for the three-month period ending on June 30, compared with 435 million Euros a year before. On an EBIT – or earnings before interest and taxes – basis, the numbers dipped to 961 million Euros, or $1.3 billion, from 1.1 billion Euros a year earlier.

Insight!

“We had a crappy first quarter, a halfway decent second, and we need to have outstanding quarters in the third and fourth,” Sergio Marchionne, CEO of both Fiat and Chrysler, said bluntly during a conference call. (more…)

Fiat’s Vans Concept 500 Tapping “Board” Culture

New vehicle latest to try to draw surfing fans.

by on Jul.28, 2014

The Fiat 500L-Vans concept is designed to supplant the traditional "woody" as the vehicle of choice for surfing fans.

Cars and surfing enjoy a special relationship on the beach and in popular culture, especially in Southern California where vehicles such as Woody wagons became embedded local lore. Fiat recently partnered with Vans adding another vehicle to the list of makers looking to capitalize on the “board” culture: the Fiat 500L-Vans concept.

Over the years, makers have sought to capitalize on the connection by customizing vehicles with surfers and their fans in mind. The Honda Element was the most recent stab at it and and Chrysler also brought out a Woody version of the PT Cruiser.

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Fiat’s new concept is making a play for the surfing crowd and it was unveiled over the weekend at the Vans US Open of Surfing in Huntington Beach, California. (more…)

Fiat Chrysler Takes Next Step toward Completing Merger

Italian maker’s board approves new framework.

by on Jun.16, 2014

Fiat Chrysler Automobiles N.V. took one step closer to being a reality with the approval the Fiat SpA board of directors for the merger.

One of the final steps of making Fiat and Chrysler one complete company was taken over the weekend when the Fiat SpA board approved the cross-border merger terms that will allow the Italian automaker to become a subsidiary of Fiat Chrysler Automobiles N.V.

The terms are essentially the blueprint for new company’s structure, including being organized in Netherlands, as well as being listed on the New York Stock Exchange and on the Mercato Telematico Azionario in Milan, Italy.

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Part of that includes Fiat shareholders receiving one share of Fiat Chrysler stock for each share of stock they own in the Milan-based maker. The plan must be approved by the Fiat shareholders, who will get the opportunity to do so at meeting in the third quarter, according to media reports. (more…)

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).”

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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. (more…)

Fiat Chrysler Lays Out Broad Growth Plan

All-encompassing blueprint shows the way to 2018.

by on May.06, 2014

A worker puts the finishing touch on the new FCA sign at the company's North American headquarters in Auburn Hills, Michigan, this morning.

With a veiled reference to the disastrous, failed alliance that nearly destroyed Chrysler during the recent recession, CEO Sergio Marchionne and his management team laid out a broad and ambitious plan for the U.S. maker and its Italian partner, Fiat, that will see the newly merged company roll out a flood of new products during the next five years.

Following up on a day-long session in late 2009, after Fiat first came to Chrysler’s rescue, the new Fiat Chrysler Automobile (FCA) detailed its next five-year plan, outlining a strategy that will see it try to sharpen the focus of each of its many brands. In most cases, that will mean adding a number of new products, though in some cases, key brands like Dodge will actually reduce their line-ups to eliminate models that don’t fit their image.

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With several hundred investment analysts and an equal number of journalists in the audience, Marchionne’s clear intent was to show that Fiat Chrysler, currently the world’s seventh-largest automotive manufacturer, is well-positioned to challenge rivals ranging from Toyota to Ford, General Motors to Volkswagen, in an increasingly competitive market. (more…)

Fiat Chrysler Hopes to Redefine, Sharpen Image as it Outlines Global Strategy

Tuesday session could deliver some surprises, sources say.

by on May.05, 2014

FCA CEO Sergio Marchionne completed his long-sought merger - but must now show he can do something with the company.

Almost exactly five years after taking control of the bankrupt automaker, CEO Sergio Marchionne will outline his global strategy for both Detroit-based Chrysler and its Italian partner Fiat during a day-long strategy session this week.

The marathon meeting will be a follow-up to one that Marchionne and his management team staged shortly after Chrysler emerged from Chapter 11 protection in 2009 – a session that saw skeptics question whether the U.S. maker could survive, never mind flourish under Italian control. But five years later, that’s exactly what is happening, Chrysler last week reporting its 49th consecutive monthly sales gain as it continued to outpace the industry’s overall recovery.

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But the smallest of Detroit’s so-called Big Three has plenty of challenges to deal with – as does partner Fiat. Together, the newly merged Fiat Chrysler Automobiles (FCA) will need to sharpen and, in some cases, redefine the identity of its various brands, roll out a wave of new products, and expand its presence in key emerging markets. That’s especially true for Chrysler which was pushed out of China after the collapse of its previous marriage to Germany’s Daimler AG.

(more…)

Fiat, Chrysler Consummate Union by Mixing Money

Company borrows $5 billion to refinance debts.

by on Feb.06, 2014

Fiat and Chrysler are consummating their "marriage" by mixing their money.

Like many marriages, the union isn’t complete until all the money is lumped into one account. Fiat Chrysler Automobiles (FCA) just finished that step when it borrowed $5 billion to refinance the debts of the two formerly separate companies.

The Chrysler Group said the previously announced offering of secured senior debt securities raised approximately $3 billion and a term loan facility was expected to raise approximately $2 billion.

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Chrysler Group intends to use the net proceeds of the bond offering, together with borrowings under the senior secured term loan facilities, to repay all amounts outstanding under the senior unsecured note issued on June 10, 2009 to the UAW VEBA Trust with an original face amount of $4.6 billion. The trust had owned 41.5% of Chrysler Group stock before it was bought out by Fiat as part of the merger of the two companies. (more…)

Chrysler Retirees Get Security from Fiat-VEBA Deal

Deal ensures trust has enough assets to fund benefits.

by on Jan.22, 2014

Sergio Marchionne, head of Fiat and Chrysler, reached a deal with the UAW for the union's stake in Chrysler.

Chrysler retirees have been one of the big winners in the deal that gave Fiat control of the large block of stock that was held by the employee benefit trust or VEBA.

Regardless of what might happen to Fiat or Chrysler or the new combination of the two – and there are plenty of doubts about Fiat’s ability to weather the economic storms in Europe and simultaneously expand there – the retirees will have a sizable insurance policy in the form of $4.35 billion that the new Italian-American company transferred directly to the VEBA.

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The VEBA, which is no longer a Chrysler shareholder, plans to broaden and diversify its asset base in effort to protect the retirees, who depend on the trust for all or part of their health care. (more…)

Smart Not Planning U.S. Version of ForFour 4-Seater

Betting a new version of the ForTwo can do the job.

by on Jan.22, 2014

Daimler AG's Smart brand will remain a one-model brand in the U.S. for the time being with the ForTwo.

Desperate to replace its aging ForTwo model and expand its appeal, Daimler AG’s Smart brand will nonetheless skip the U.S. market when it comes time to launch a second, larger minicar.

The troubled brand’s top executive told Automotive News she doesn’t think the cost of upgrading the planned ForFour model would be justified by what are likely to be modest sales, at best, in the American market.

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While a final decision has yet to be made, the likelihood that there’ll be no U.S. version of the ForFour is leaving some observers scratching their heads, especially when compared to what Smart’s competitors have been doing to expand their own appeal. (more…)