CEO Marchionne said that on hold is Fiat’s wish to purchase the remaining 41.5% of Chrysler owned by the healthcare trust (VEBA) held by the United Auto Workers for former Chrysler workers. An IPO is coming though.
Fiat SpA [F.MI] posted a Q2 profit of €142 million or ~$188 Million largely because of the contribution of Chrysler Group where it owns a 58.5% stake courtesy of a U.S. taxpayer financed bailout of the Detroit Three automaker. The northern Italian company would have lost €247 million without Chrysler Group because its European sales dropped 5% during the period. Q2 revenues increased 4% to €22 billion.
Fiat said its group trading profit – or earnings before interest, taxes and one-time items – was €1.03 billion ($1.37 billion) with good results in North America and Asia. Fiat’s forecast for the year includes revenue between €88 billion and €92 billion, and profit between €4.0 billion and €4.5 billion. (Read AutoInformed $507 Million Chrysler Q2 Profit. New Cherokee Sales on Hold!)
Shipments of cars, light truck and Jeeps increased 5% to 1.2 million vehicles with more than half accounted for by Chrysler brands. Fiat sold 234,000 passenger cars under its mass-market Fiat, Lancia and Alfa Romeo brands during the quarter as market share shrank 0.5 percentage points to 6.3%, which was attributed to the “continued reduction in Italy’s overall weighting in the European market,” Fiat said in a release.
On a conference call, CEO Sergio Marchionne said that on hold for the moment is Fiat’s wish to purchase the remaining 41.5% of Chrysler owned by a healthcare trust (VEBA) held by the United Auto Workers for former Chrysler workers.
Marchionne also said that Fiat has halted plans to invest billions of euros to build new Alfa Romeo and Maserati models in Italy subject to clarification of a court ruling declaring part of Italy’s labor laws unconstitutional.
“If the investor conditions in Italy remains such that it is impossible to properly govern the industrial operations in this country,” Marchionne said,“and then, obviously, any commitment that we made for this country is up for grabs.”
“And I think that I made it very, very clear we’re still trying to understand the implications of the latest court ruling on what Fiat is doing in Italy. And as I understand it now, we are in the process now organizing a meeting with the union, which has been at the heart of the dispute to Fiat. We’ll see where it takes us.”
