Analysts have raised concerns about Fiat's growing debt pile and its ability to fund a strategy that will shift the automaker's focus to its upscale Maserati and Alfa Romeo brands from an over-reliance on low-margin mass-market models.
Responding to a request for clarification from market regulator Consob, Fiat said that beyond the cap, dividend payments were also subject to the condition that Chrysler's liquidity exceeds a threshold of $3 billion. It said Chrysler's liquidity totalled $14.7 billion at the end of 2013.
Fiat also said intercompany financing was limited by covenants that require deals to be approved by a majority of "disinterested" members of the Chrysler board of directors.
Fiat said it had enough resources to fund its activities, however.
"On the basis of the group's available liquidity, credit lines in place and available for investment in industrial activities, in addition to the ability to access capital markets ... the group believes its capital resources are more than adequate to meet the projected funding requirements," it said in a statement.
Monday, February 17, 2014
Fiat's access to Chrysler funds curbed by dividend cap, debt covenants - Yahoo Finance
Wednesday, January 29, 2014
FIAT Chrysler breaks with Italy in New York listing
Fiat Chrysler will list in New York and drop the Fiat name from its new logo as the newly-combined carmaker pushes ahead with a politically sensitive decision to shift away from Italy.
Fiat, which fully acquired Chrysler this month, said the two carmakers would be rechristened under a new holding company incorporated in the Netherlands known as Fiat Chrysler Automobiles, with a tax domicile in the UK.
The expected restructuring, approved by Fiat directors on Wednesday, completes a long and drawn-out marriage between the US and Italian carmakers which industry analysts say will safeguard the future of both, but which has sparked fears of abandonment in Italy.
The new company, almost five years in the making, will list on the New York Stock Exchange with an additional listing in Milan, granting it easier access to financing. All Fiat shareholders will receive one share in the new company for every Fiat share they own.
Thursday, January 2, 2014
Fiat reaches deal with UAW trust to buy rest of Chrysler | Reuters
Italian carmaker Fiat SpA said on Wednesday it has signed an agreement to buy the stake in U.S. automaker Chrysler Group LLC it does not already own, ending months of tense negotiations and allowing Chief Executive Sergio Marchionne to pursue his goal of creating the world's seventh-largest auto group.
Fiat will acquire the 41.46 percent stake in Chrysler from a retiree healthcare trust affiliated with the United Auto Workers union, which will receive $3.65 billion in cash for its stake. Additionally, once the deal closes, Chrysler has committed to giving the trust an additional $700 million.
The deal is a victory for Marchionne, who wants to merge Fiat and Chrysler and create a more competitive automaker with a broader global reach. But he has been at odds with the UAW trust for more than a year over the value of Chrysler.
Chrysler will contribute $1.9 billion in cash, while Fiat will put up $1.75 billion to buy out the trust, which is known as the VEBA, both companies said in separate news releases.
Monday, November 11, 2013
Stalled Jeep Cherokee will be key to Chrysler's fate - Fortune Management
By Doron Levin
That noise you hear is the sound of grinding molars. It's coming from Chrysler's headquarters in Auburn Hills, Mich. and the offices of Jeep retail dealers across the U.S., who are champing at the bit to start selling the new Jeep Cherokee.
The new Cherokee compact sport utility vehicle is a critically important model for Chrysler, which is recuperating from its 2009 bankruptcy filing. Chrysler has built more than 12,000 Cherokees at its Toledo, Ohio Jeep plant but can't release them for sale until glitches with its transmission are resolved.
According to Chrysler, engineers are refining the nine-speed automatic transmission featured on the vehicle, the first of its kind on any Chrysler vehicle. Once the refinements are complete, the electronics of existing transmissions must be reprogrammed.
Jeep is Chrysler's most valuable brand, among Dodge, Chrysler, Fiat, and Ram Truck. The Liberty had previously served as Jeep's compact SUV offering, which includes competitors like the hot-selling Honda CR-V (HMC), Ford (F) Escape, and Toyota (TM) RAV4. Over two generations of Liberty, sales peaked in 2002 at 171,212; they fell to a trough of 43,503 in 2009.
Chrysler's Toledo assembly plant was shut down last fall for retooling, in anticipation of the spring startup of production. The automaker displayed the new Cherokee at the New York auto show in late March. Press drives of the car were postponed to September from August due to difficulties with the transmission, which is based on a design by the German manufacturer ZF and built at a Chrysler plant in Indiana
Monday, September 23, 2013
Chrysler sets stock offering process in motion, filing statement with SEC | Detroit Free Press | freep.com
Fiat has been trying to exercise
a clause in its operating agreement with the UAW Trust to buy another 3.3% of Chrysler shares every six months since July 2012 and has made offers for a total of 9.9% of additional Chrysler shares.
The UAW trust has argued that Fiat has not offered enough. There is a gap of about $200 million between what Fiat offered for the first 3.3% increment and what the UAW trust argues it is worth.
The UAW trust needs to convert its holding to cash because it is responsible for health care insurance for about 63,000 Chrysler retirees. The higher price it can get, the more sustainable that coverage will be.
An IPO complicates Marchionne’s plan to fully merge Fiat and Chrysler because Chrysler's shares would be traded in the U.S. while shares of Fiat would continue to be traded on the Milan Stock Exchange.
Chrysler files for IPO, forced by UAW trust
Reuters 9/23/2013 5:41 PM ET
DETROIT, Sept 23 (Reuters) - Chrysler Group LLC filed paperwork on Monday for an initial public offering of up to $100 million, an action that could slow majority owner Fiat SpA's plans to take full ownership of the U.S. automaker.
The offering will be underwritten by J.P. Morgan, the company said in a securities filing posted more than four years after the third-largest U.S. automaker emerged from a government-sponsored bankruptcy under Fiat management.
The size of the offering was not mentioned in the filing papers, and Chrysler officials did not comment on the figure.
Chrysler's minority shareholder, the United Auto Workers retiree healthcare trust fund, decided in January to sell part of its 41.5 percent stake in the company in an IPO.
Sergio Marchionne, chief executive of both Chrysler and Fiat, said in mid-September that the IPO is likely to take place in the first quarter of 2014.
Marchionne and the UAW trust, a voluntary employee beneficiary association, or VEBA, have been at odds over the value of Chrysler. Their inability to agree on a price for the VEBA stake led to Monday's IPO filing.
Saturday, September 14, 2013
Chrysler buyout? Fiat no closer on deal to Chrysler stake. - CSMonitor.com
By Colleen Barry, Associated Press / September 13, 2013
Milan
Fiat and Chrysler CEO Sergio Marchionne said Friday that he is no closer to a deal for the Italian carmaker to take full ownership of Chrysler and in the meantime was moving ahead on the formalities of a public offering for the U.S. group.
Marchionne told reporters in Turin, where Fiat has its headquarters, that talks were continuing with a United Auto Workers health care trust, which owns 41.5 percent of Chrysler. But the two sides continue to disagree on price. Fiat took control of Chrysler as it emerged from bankruptcy in 2009 and now owns a 58.5 percent stake.
Read the entire article : Chrysler buyout? Fiat no closer on deal to Chrysler stake. - CSMonitor.com
Friday, May 31, 2013
Fiat reassures Italy on jobs as Chrysler merger looms - Yahoo! News
By Jennifer Clark
Zanonato met with Marchionne and Fiat's controlling shareholder John Elkann, both of whom gave assurances Fiat intends to maintain employment even as Italy's car market shrinks to levels last seen in the 1970s.
Italian car sales fell nearly 20 percent last year and are seen falling 5 percent more this year to about 1.3 million vehicles. The Italian government, already grappling with a recession and austerity-mandated budget cuts, has few tools at hand to help sales revive.
Yet Fiat has plans to build Jeeps and a new line of Alfa Romeos in Italy, for export to markets in Asia, Latin America and the United States…..
Click on the following to read all of the story: Fiat reassures Italy on jobs as Chrysler merger looms - Yahoo! News
Friday, February 15, 2013
Chrysler uses Compass to keep Belvidere plant busy - Rockford, IL - Rockford Register Star
By Alex Gary
Dart production hit a high of 14,101 in November. But sales have not kept pace and Chrysler cut Dart output to 7,046 in January. Company CEO Sergio Marchionne admitted the company erred by building mostly manual transmission Darts at first as well as equipping them with underpowered transmissions.
As the company alters its production mix, it has upped the number of Jeep Compasses coming out of the plant. The Compass remains popular in Europe and in January workers turned out 11,381 of the small SUVs.
Friday, January 18, 2013
Chrysler CEO admits Dodge Dart sales are disappointing - Rockford, IL - Rockford Register Star
Marchionne blamed the slow takeoff for the Dart to poor decisions made by the company on what to build first and not on the car itself.
The first batch of Darts to hit dealer lots only had manual transmissions. Then Chrysler came out with two versions with six-speed automatic transmissions that shift more often and accelarate more slowly than what U.S. drivers are used to.
Friday, September 16, 2011
Why contract talks between UAW and Chrysler came to a halt
The following is a small excerpt from the Christian Science Monitor article available at:
http://www.csmonitor.com/USA/2011/0916/Why-contract-talks-between-UAW-and-Chrysler-came-to-a-halt
Talks between both parties to establish a new four-year contract were supposed to wrap up by midnight Wednesday. The negotiations, which began last month and have also included Ford and General Motors, mark a key moment for the auto industry following the GM and Chrysler bankruptcies two years ago.
At 10 p.m on Wednesday, Chrysler CEO Sergio Marchionne sent an e-mail to UAW president Bob King. According to The Detroit News, Mr. Marchionne complained that Mr. King was not present at the negotiating table and that calls to his mobile phone went unanswered. King was reportedly present in talks with rival GM.
RELATED: Auto sales - seven cars in fast lane despite slow economy
“I know that we are the smallest of the three automakers here in Detroit, but that does not make us less relevant. Our people are no less relevant,” wrote Marchionne, who is based in Italy.
Marchionne flew back to Europe Thursday morning and is not expected back in Detroit until early next week.
Thursday, April 21, 2011
Fiat aims to control Chrysler sooner - The Boston Globe
Chrysler owes the US and Canadian governments about $7.53 billion. Marchionne needs a refinancing deal with banks to pay back the government before he can exercise his option to buy the additional stake
Fiat SpA will pay $1.27 billion to reach a 51 percent stake in Chrysler Group as chief executive Sergio Marchionne is set to gain control of the US automaker two years earlier than planned.
saving money by making the purchase earlier because the cost is linked to the company’s earnings. Marchionne is pushing Chrysler to post its first net income this year since emerging from bankruptcy.
Chrysler expects to almost triple what it calls modified operating profit (excluding interest, taxes, and some pension costs) to more than $2 billion from $763 million last year and to earn as much as $500 million in net income.
Click on the following for more details: Fiat aims to control Chrysler sooner - The Boston Globe
Friday, February 4, 2011
UPDATE 3-Chrysler must shed 'shyster' bailout loans -CEO | Reuters
Chrysler Group LLC is working to refinance what its chief executive characterized as "shyster loans" that the Obama administration extended as part of a bailout to keep the automaker from collapse in 2009.
"I want to pay back the shyster loans," Sergio Marchionne said at an industry conference, using a derogatory term for an unethical lawyer or politician. "Pay back the loans, get those out and then take (the company) public."
Marchionne, who is also CEO of Italy's Fiat SpA (FIA.MI), has said repeatedly that the high interest rates on loans Chrysler owes the U.S. and Canadian governments have been an obstacle in the automaker's return
A Chrysler spokesman declined to comment on Marchionne's use of the term "shyster".
Marchionne said Chrysler was in the final stages of discussions with the Department of Energy on its application for up to $3.5 billion loans. A deal in principle to access the new loans was still possible by March, he said.
The bailout loans carry a premium. Chrysler pays 7.2 percent on one tranche of its Treasury loan worth more than $2 billion and 10.55 percent on another $3.5 billion.
Click on he following for more details of this Reuters story: UPDATE 3-Chrysler must shed 'shyster' bailout loans -CEO | Reuters
Saturday, November 6, 2010
Chrysler Struggling To Update Line-up, Resolve Quality Issues
Maker to spend nearly $2 billion at three key plants.
by Paul A. Eisenstein on Oct.29, 2010
- $600 million investment in an under-utilized assembly plant in Belvidere, Illinois, where Chrysler is expected to begin producing a new small car late next year. Based on the little Alfa-Romeo Giulietta produced by its Italian affiliate, Fiat Automotive, the new offering is expected to get 40 miles per gallon
- dropping $850 million into one of its oldest and most outdated assembly plants, the Sterling Heights plant, in Detroit’s northern suburbs.That factory was originally slated to close, in 2012, as part of Chrysler’s post-bankruptcy reorganization. But Marchionne has decided to use it produce those next-gen midsize models, which will use Fiat’s C-EVO architecture. They originally were slated for production in Mexico or Canada.
- Chrysler’s engine plant in Dundee, Ohio, is getting a new $150 million injection – on top of an earlier, $179 million investment announced last December. It will allow the maker’s so-called World Engine factory to produce Fiat’s innovative Multi-Air 1.4-liter powertrain.
Click on the following for more details: Chrysler Struggling To Update Line-up, Resolve Quality Issues | TheDetroitBureau.com
Thursday, December 10, 2009
Once-Struggling Fiat Could Become No. 3 World Automaker With GM, Chrysler Deals
Fiat is also negotiating with ailing General Motors to absorb GM's European and Latin American operations. If successful, Fiat will oversee a new company with the capacity to build almost 6 million cars a year -- triple what Fiat produced last year.
Read the rest of the story by clicking on the following: Once-Struggling Fiat Could Become No. 3 World Automaker With GM, Chrysler Deals - washingtonpost.com
Belvidere presentation to Fiat highlights cooperation
if he had not taken the trip, the region would have been at a disadvantage in the competition to be one of the plants that produces the Fiat-designed vehicles.
“We would have been playing catch up,” Williams said.RAEDC President Janyce Fadden said the high-level summit in Turin organized by the U.S. Chamber of Commerce and the Center for Automotive Research presented a chance for Fiat executives, who have been difficult to meet with, to get to know Americans who want their busin
Click on the following for more details: Belvidere presentation to Fiat highlights cooperation - Rockford, IL - Rockford Register Star
Monday, November 9, 2009
Chrysler's Complete Product Plan
Last Wednesday’s big conference in Detroit was basically a 335 slide power point production. The key 13 slide as presented last week are available at this site. The slides below have the Belvidere built models.
Click on the following for the rest of the slides: Chrysler's Complete Product Plan
Chrysler’s new wing logo gets patent approval
