* Says merged entity will be listed "where the money is"
* Says mandatory convertible an option to fund investments
* Sees Italy factories fully utilised, workers reinstated
By Agnieszka Flak
MILAN, Jan 10 Fiat will focus on
revamping its Alfa Romeo brand after its planned merger with
Chrysler and will keep production of the marque in Italy as it
seeks to revive its European operations and protect jobs, its
chief executive said on Friday.
In an interview with Italian daily La Repubblica, Sergio
Marchionne sought to reassure unions and politicians worried the
merger with U.S. group Chrysler could signal a shift away from
the firm's home market, where Fiat was founded 115 years ago.
"Just as the Jeep is sold in the whole world but is American
to the bone, so Alfa's DNA has to be authentically all Italian,"
he said. "It will indeed remain at home."
Marchionne is betting on the sporty Alfa brand because he
believes it can deliver the global profile that the mass-market
Fiat brand cannot and far greater sales volumes than top-end
Maseratis, but the strategy has so far been met with scepticism.
Fiat acquired the Alfa brand in 1986 and has since failed to
revive it despite repeated attempts.
In the first interview since striking a landmark $4.35
billion deal to gain full control of Chrysler, Marchionne said a
potential move of the group's listing or headquarters outside
Italy was symbolic and did not mean production would be moved.
Italy's coalition government, desperately trying to protect
jobs, has been closely watching the merger talks for any signs
that Fiat could further diminish its presence in the country.
The carmaker employs around 62,000 people in Italy, where
unemployment is running at a 37-year record of 12.7 percent.
Marchionne said the merged Fiat-Chrysler would be listed
where access to capital was easier. Sources close to Fiat told
Reuters last week that a primary listing in New York was most
"We will go where the money is," Marchionne said. "There is
no doubt that the most liquid market is the American one, the
one in New York, but the board will decide. I am also willing to
go to Hong Kong."
ALFA ROMEO REVIVAL
Marchionne repeated that selling Alfa Romeo to a competitor
was out of the question. Volkswagen has repeatedly
expressed an interest in the unit.
"They can go dream about it," he said.
Marchionne said the Chrysler deal would allow Fiat to
channel investments into underutilised Italian plants and help
reinstate the thousands of workers on temporary layoff schemes.
"My pledge is: when the plan is fully operational, the
Italian industrial network will be used to the full, market
permitting," he said. "With time - if the market does not
collapse again - all (workers on temporary layoffs) will be
In the mass market, Fiat will focus on developing models
within the Panda and 500 families, and exit the low and medium
segment of the market, Marchionne said. Lancia will become a
brand for the Italian market only, he added.
Beyond a planned Maserati sport utility vehicle (SUV), Fiat
would build "something else" at its Mirafiori plant in northern
Italy, Marchionne said, without giving details.
While its Melfi factory is gearing up to produce the Fiat
500X and the Baby Jeep, at Pomigliano the company will continue
making the Fiat Panda and "maybe a second vehicle", Marchionne
said, adding that he saw the Cassino facility between Rome and
Naples as the most suitable for an Alfa Romeo relaunch.
Fiat will present a new industrial plan, outlining new
investments and models, at the end of April, and Marchionne said
it could use a mandatory convertible bond to help finance it.
"A mandatory convertible bond could be an appropriate
measure," he said. He would not comment on a potential 1.5
billion euro ($2 billion) size for the bond mentioned by media.
He dismissed market concerns about Fiat's liquidity
situation after the Chrysler deal and rising debt.
"One needs to see where our debt position will be after the
April plan on new models. I am not at all worried," he said.
At 1020 GMT, Fiat shares were down 0.4 percent, lagging a
small rise in the the European car index.