It’s not the best of times to be a Chrysler-Fiat executive, never mind the group’s CEO. Sales keep falling due to the European crisis, your Italian factories are operating at less than 50 percent of their capacity and you have postponed the long-awaited return of Alfa Romeo to the U.S. market more times than even you can recall.
At the same time, the local government and workers’ unions are, understandably, pressuring you to keep your factories operational.
Nevertheless, Sergio Marchionne isn’t willing to give up so easily. In fact, he has already met with the Italian PM and assured him that even though he won’t implement the €20 billion (US$26 billion) investment plan that he announced last year, he won’t close any plants either.
Marchionne is also a realist; he says that the initial projection about Fiat’s European sales “is nonsense because the market won’t be there”. Therefore, he added, “we will be updating our forecasts for 2013 and 2014”.
New car registrations in European markets fell by 8.5 percent in August. It was the 11th month in a row of declining sales and top auto executives don’t expect things to improve in the next two years.
Before delivering a speech at the Ohio State University, Marchionne told reporters that the “will see an update of what we think will happen in 2013 and 2014” on October 30.
Since the 2009 tie-up with Chrysler during the infamous government bailout, Fiat has increased its stake from the initial 20 percent to 58.5 percent after meeting the targets set by the U.S. Treasury.
The tie-up proved to be a wise move: currently, Chrysler is the group’s main source of income as its sales in the booming U.S. market increase, and the two companies’ combined sales in the States account for more than two-thirds of their profits.
Still, all is not well in the U.S.: Fiat wants to exercise its option and acquire a further 3.3 percent of Chrysler shares that is currently owned by the UAW voluntary employees’ beneficiary association (VEBA), which controls the remaining 41.5 percent.
VEBA and Fiat disagree over the current value of the shares, though, and the dispute has reached the Delaware Chancery Court.
“When we signed the damn thing in 2009, it was clear”, said Marchionne. “Today, now that things have changed and we’re making some money, it’s incredible how differences of opinion arise.”
By Andrew Tsaousis
Story References: Automotive News
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