Fiat, Chrysler to Have One Management Structure, Sergio Marchionne Says
Fiat SpA and Chrysler Group LLC will have a single management structure soon, Sergio Marchionne, chief executive officer of both companies, said today, as he takes another step toward merging the two carmakers.
Marchionne plans to announce a unified structure “in terms of leadership pretty quickly,” the executive told reporters in Zurich after a speech at the Swiss-American Chamber of Commerce. Marchionne, 59, declined to say whether the announcement would come along with Fiat’s quarterly earnings report July 26, reported Bloomberg.
Marchionne is working on management changes as he steps up the integration of the two companies. He plans to merge the carmakers to reduce costs and achieve a target of more than 100 billion euros ($140 billion) in combined revenue by 2014. The executive said in May that the timing of a merger hasn’t been decided yet, adding that a combination isn’t likely this year.
“No one is better than Marchionne at selling an auto story,” Societe Generale analyst Stephen Reitman wrote in a note to clients July 11. “The current stock price already discounts most of the good news to come from Chrysler and ignores much of the risk,” said Reitman, who cut his recommendation to “sell” from “buy.”
Fiat consolidated Chrysler’s results starting at the end of May, a sign of the rapid integration of the two carmakers since the Auburn Hills, Michigan-based manufacturer exited bankruptcy in June 2009.
Fiat, which was initially granted a 20 percent stake in Chrysler by the U.S. government, aims to hold 57 percent of the third-biggest U.S. automaker by the end of 2011. The United Auto Workers union’s trust will have 41.5 percent of Chrysler at that time, Fiat said.
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