By Bernie Woodall
COLUMBUS, Ohio Oct 8 Sergio Marchionne, chief
executive of both Fiat SpA and Chrysler Group LLC, will
revise 2-year growth plans for both automakers later this month
to reflect the slump in European auto sales since 2009.
European car sales fell 8.5 percent in August for an 11th
straight monthly decline and several auto executives said last
month that a European rebound was unlikely within two years.
That raised questions about Fiat's ability to meet targets
laid out in its five-year growth plan that was announced in
2010. Marchionne outlined a separate five-year plan for Chrysler
in late 2009.
Marchionne, who has led both automakers for more than three
years, will outline his new 2013-2014 forecast for Fiat-Chrysler
on Oct 30, he told reporters on Monday in Columbus, Ohio.
"You will see an update of what we think will happen in 2013
and 2014," he said, before delivering a speech on creative
advertising. "To assume that the 2010 data that was put out in
Europe is going to be confirmed is nonsense."
Chrysler exited government-funded bankruptcy protection in
2009 under the management control of Italian automaker Fiat,
which was also given a 20 percent stake in the U.S. automaker.
Since its bankruptcy, Chrysler has become Fiat's main source
of strength as auto demand in Europe contracts. The combined
Fiat-Chrysler group now makes more than two-thirds of its
profits in the United States.
"How the group overall compensates for that shortfall is
another issue because we've got other businesses and other
operations that have come a long way," Marchionne said Monday
at the event held at the Wexner Center for the Arts at Ohio
VEBA, FIAT AT ODDS OVER CHRYSLER VALUE
Marchionne said he hoped to resolve quickly the dispute
between Fiat and Chrysler's other shareholder, the retiree
healthcare trust affiliated with the United Auto Workers union,
over the value of Chrysler.
"I would certainly hope that it would happen by the end of
the year," Marchionne told reporters on Monday.
Since 2009, Fiat has boosted its stake in Chrysler from 20
percent to 58.5 percent after meeting a series of performance
targets set by the U.S. Treasury during the recession.
Fiat would like to increase its stake in Chrysler by buying
shares now owned by the trust, known as the voluntary employees
beneficiary association or VEBA. Fiat is seeking to exercise a
call option to boost its stake in Chrysler by 3.3 percent.
But Fiat and the VEBA are now at odds over what those shares
are worth. The trust is looking to maximize the value of its
Chrysler stake to cover escalating healthcare costs for the U.S.
Marchionne said Fiat will "show up" to exercise its call
option every six months, as allowed by the 2009 bankruptcy
documents. He will attempt to buy another small stake in
Chrysler from the VEBA in January.