Associated Press (Gavi, Italy) - Fiat and Chrysler CEO Sergio Marchionne said Tuesday he is not in talks to buy the Chrysler stake held by a trust for retired autoworkers.
Marchionne told reporters on the sidelines of a new Fiat car launch that the “easiest route” for the trust to convert its stake into cash is when Chrysler goes public. He said that the IPO would not be in 2011 because “the market is not there.”
“The easiest route is to do an IPO, rather than buying the stake,” Marchionne said.
Fiat raised its stake in Chrysler to 52 percent with a deal earlier this month to buy the U.S. Treasury’s 6 percent interest in Chrysler for $500 million. Fiat hopes to raise its stake to 57 percent by the end of the year through a performance benchmark.
Marchionne said he is in talks to buy the Canadian government’s remaining stake, around 1.5 percent, but that the timing was not up to him. Fiat has offered $125 million for the stake.
Regarding the much speculated IPO of Ferrari, the Italian sports car company owned by Fiat, Marchionne repeated that “it is not on my table today.” He added: “It is always an option.”
The CEO arrived by helicopter at a villa surrounded by rolling vineyards for the launch of the new Fiat Freemont, the first Fiat-badged car built on Chrysler technology for the European market, and a tangible sign of the deepening integration between the two automakers. The Freemont is a SUV-style seven-seat family vehicle built on the Dodge Journey platform at Chrysler plant in Mexico.
Fiat wants to sell about 30,000 of the vehicles a year in Europe, two-thirds of those in Italy, where it replaces the quirky Fiat Multipla characterized by two benches of three seats. The Journey, which went on sale in the United States in 2008, has sold between 47,000 to 50,000 a year — relatively low numbers when compared to the top-sellilng crossover vehicle, the Honda CR-V, which sold more than 200,000 last year.
The Freemont is being launched two years after Fiat acquired its initial 20 percent stake in Chrysler in exchange for small car technology and management know-how. Since then, Marchionne has been knocking back one milestone after another with an ease and speed that has impressed analysts and observers.
“None of this has been easy. Trust me,” Marchionne said.
Indeed, not all has gone according to plan.
Fiat hopes to sell 50,000 of the iconic Fiat 500s in the U.S. and Canada in 2011, but the rollout has been slowed by problems getting U.S. dealerships licensed. Just 3,141 of the subcompacts, meant to be Fiat’s North American calling card, were sold in the U.S. through the end of May.
Only about 70 dealers have been licensed to date, well below the targeted 160. Marchionne said they hoped to get to 100 by the end of summer.
“Permits for these new facilities are slow in coming,” Marchionne said, but added they still hoped to meet targets.
