marchionne will stay at fiatchrysler until at least 2017
Last Updated : GMT 12:34:34
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Marchionne will stay at Fiat/Chrysler until at least 2017

Arab Today, arab today

Arab Today, arab today Marchionne will stay at Fiat/Chrysler until at least 2017

Detroit - AFP

Sergio Marchionne will remain as the chief executive of Fiat and its US subsidiary Chrysler until at least 2017, Fiat chairman John Elkann said Monday. Elkann confirmed Marchionne's plans two weeks after the Fiat CEO completed the takeover of Chrysler, finishing a four-year effort that brought what turned out to be a strong source of sales and revenue to the struggling Italian automaker. That deal has also opened doors to a more sweeping transformation of Fiat, including the possibility of moving its headquarters to the United States and of listing its shares on a major global bourse or two, in addition to Milan. "We have a deal for at least three years," Elkann told reporters on the sidelines of the Detroit auto show. "We built this together," he told reporters. "He's really been able for the last years to make sure Chrysler and Fiat worked together, and I think we're going to see the companies are going to be together forever." The announcement comes after Fiat took full control of the number three US automaker on January 1 by buying the 41.5 percent stake owned by the Chrysler retired employees' VEBA health care trust fund. That move came only after tough negotiations with the VEBA fund, which had moved to sell its shares publicly in a new market listing to get a higher price. Fiat was able to avoid the public offering and complete the deal for $3.65 billion (2.66 billion euros), plus an additional payment by Chrysler to the VEBA trust of $700 million. That opens the door for a greater transformation of both operations, including, Elkann said, possibly changing Fiat's name to recognize Chrysler's stature in what will be the world's seventh largest auto maker. "We are going to be able to build on that a much stronger, solid company... We're very excited about that and Sergio is going to lead that," Elkann said. Marchionne engineered the merger between the Italian and US manufacturers in a process starting in 2009 when Chrysler exited a government-backed bankruptcy precipitated by the global economic crisis. Fiat picked up 58.5 percent of Chrysler originally. What was originally seen as a risky bet for Fiat -- the German automaker Daimler had failed to turn around Chrysler -- has paid off handsomely as Chrysler's sales are now booming after decades of turbulence and decline. Chrysler's profits have been keeping Fiat buoyant in recent years amidst a deep downturn in Europe, encouraging Marchionne to buy up the rest of  Chrysler's shares. Marchionne's ambition is to create a car maker with the capital and sales volume to compete with the likes of Toyota and General Motors. "We're the seventh carmaker in the world and we aspire to be one of the so-called big guys," Marchionne said. Marchionne was widely credited for Fiat's turnaround after taking over as CEO in 2004 but domestic sales have been hard hit by the economic crisis and he has had repeated run-ins with unions over work conditions. Marchionne said in Detroit that he was "delighted" to have closed the deal to buy the rest of Chrysler, despite the pain of the process. "It had to get done; it's like going to the dentist," he told reporters. The next step is to develop a plan going ahead for the merged company, a process to begin with a board meeting on January 29, Marchionne said. One issue will be to weigh the headquarters location, weighing what is best legally, for taxes, and other issues. Access to capital markets is another issue, including where to have Fiat shares traded. Marchionne said that talking about a headquarters "is almost anachronistic" today given the way multinationals operate. Asked whether he preferred Turin or Detroit, Marchionne quipped: "My preference is that I live on an airplane. It doesn't make a difference to me." "What is going to be done at the January 29 board meeting is a deep analysis of the available options," he said.

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