* Ends speculation could step down after Chrysler deal
* Will oversee execution of new 3-year industrial plan
* Signals new headquarters likely to be outside Italy
By Bernie Woodall and Agnieszka Flak
DETROIT/MILAN, Jan 13 Sergio Marchionne has
pledged to stay on as chief executive of Fiat-Chrysler for at
least three years to see through the full merger of the Italian
carmaker and its U.S. business, and a new strategy to turn
around its loss-making operations in Europe.
Marchionne, who took the helm of Fiat a decade ago and in
2009 also started running Chrysler, had previously said he could
step down in 2015 and some analysts feared uncertainty over his
future at the combined company could cloud its prospects.
After striking a $4.35 billion deal to buy out a minority
shareholder from Chrysler, the 61-year-old now has the delicate
task of listing the new company and probably establishing its
headquarters outside Fiat's home country of the last 115 years.
Marchionne told a press conference at the Detroit auto show
the size of Chrysler's operations and U.S. financial market
liquidity "makes Detroit especially relevant" as the board
prepares to discuss the merged company's headquarters at a
meeting on Jan. 29.
But he played down the consequences of the decision for jobs
or strategy, adding it would have "almost negligible" effects on
employment. Italy's government has been following the merger
talks very closely for any signs that Fiat's presence in its
home market could lessen and lead to job cuts. The company
currently employs around 62,000 people in Italy.
"We're sufficiently large now ... to need access to very
fluid, efficient capital markets," Marchionne said. "That will
probably be the single largest driver of the decision that will
be made by the board on Jan. 29." The formal merger of the two
companies is expected to be completed by Jan. 20.
Asked how the Italian government might react to new
headquarters, Marchionne said: "I sincerely hope they don't
He said a listing of the combined entity was on the agenda
this year: "Within 2014, I think."
In an interview with an Italian newspaper last week,
Marchionne said that while New York was the most liquid market,
Hong Kong was also a possibility.
Fiat Chairman John Elkann, the scion of the Agnelli family
that controls the Italian carmaker, also said on Monday that he
would remain as chairman of the merged group.
"There will be a succession, but definitely not before the
conclusion of the industrial plan," Elkann said about
Marchionne's mandate and the three-year strategy due to be
unveiled by May.
Fiat has said the new strategy will focus on a revamp of its
Alfa Romeo brand and keep production of the sporty marque in
Italy as it seeks to fill underutilised plants, protect jobs and
compete in the higher-margin premium segment of the market.
The company is battling to return its European operations to
profit after a lack of investment in new models saw Fiat hit
hard in a six-year market slump in its home region.
"The conclusion of the plan that we're going to be
presenting in four months is crucial. And the board feels a lot
better about this," Marchionne said at the press conference,
referring to the board's reaction to his extended mandate.
While recent data suggest the European car market has
stabilised, Marchionne said he did not expect a quick upturn.
"I don't see any major signs of a recovery (in Europe) in
the next 12 months," he said.
The new industrial plan is due to outline investments,
including new models. Some analysts are sceptical whether Alfa
Romeo can turn Fiat around as previous attempts to revamp the
brand have failed, as well as whether the company has enough
money to invest after increasing debt to buy out Chrysler.
Marchionne said a mandatory convertible bond was one option
the company was considering to boost its capital, while he again
ruled out a share issue by either Fiat or Chrysler.
Media have speculated the size of the bond could be around
1.5 billion euros ($2 billion).
When asked about potential future tie-ups with any other
group, including Peugeot and Suzuki,
Marchionne repeated he was open to a collaboration with all.
"My dossier is open with everybody," he said. "Peugeot is
one potential dialogue partner, there are others."
Fiat shares ended up 1.19 percent at 6.79 euros, outpacing a
0.7 percent rise in Milan's blue-chip index.