Fiat Chrysler to have Dutch HQ, UK tax base
Merger with Detroit automaker creates globe's 7th-largest29 January, 19:34
A new logo was also unveiled as Fiat moved to consolidate its full acquisition of Detroit-based Chrysler and create the world's seventh-largest automaker following years of working towards a full merger.
The creation of Fiat Chrysler has laid "solid foundations for a global automaker with a mix of experience and know-how on a level with the best of our competitors," the company's Chief Executive Officer Sergio Marchionne said. "Today is one of the most important days of my career in Fiat and Chrysler," added Marchionne, who was a driving force behind the merger that took five years to achieve. The company - founded more than 100 years ago, in 1899, in the northern industrial city of Turin - quickly moved to reassure Italian politicians, unions and its employees that the changes will have "no impact" on the workforce in Italy.
Still, the iconic Fiat logo will be replaced by the plain blue lettering "FCA" as its new logo and the company announced that it will now be registered in the Netherlands with its tax base in the UK, likely London. The news, including the fact that Marchionne expects the new group to be listed on the New York Stock Exchange - where it will be better able to raise capital - before the end of 2014, as well as on the Milan bourse, was met with a drop of more than 4% in the value of Fiat shares Wednesday.
Marchionne also confirmed that he would stay on for another three years before putting the new Fiat Chrysler into safe hands selected from "within the group" adding that it would not be "correct to choose someone from outside".
"The challenges will not fall away," said Marchionne, who hatched the audacious idea to take over the Detroit No.3 automaker after it rescued bankrupt Chrysler amid the US economic crisis in 2009. With an initial 20% stake in the company, Fiat turned the fortunes of its American partner around and now, thanks to its strong sales in North America, Chrysler has helped to keep Fiat afloat.
As a culmination of all that, on January 1 Fiat announced it had gained full control of Chrysler in a $4.35-billion deal reached after more than a year of negotiations with VEBA, a healthcare trust associated with the United Auto Workers union that held the remaining 41.46% share of the US automaker not yet acquired by Fiat.
During a Wednesday meeting with analysts, after the board of directors approved the final restructuring of the automaker, Marchionne also confirmed that capital expenditures by the new FCA will reach about eight billion euros in 2014, half a billion euros higher than last year's budget.
FCA's new business plan is expected to be unveiled in May.
The full deal still requires approvals by regulators and some politicians complained that moving executive operations offshore is bad for Italy, with one calling that a "slap in the face".
However, Premier Enrico Letta seemed less concerned, saying Italians should "cheer" the global success of a home-grown brand.
"The question of where they put the headquarters is entirely secondary: what counts are jobs, the number of cars they sell and where they sell them internationally," he said during a visit to Brussels.
"For some time it has been a company that is different from the one we were used to...because Fiat is now a global player whereas before it was a national one".
The new deal has raised hopes in Italy that Fiat factories will be used to produce planned new models of Alfa Romeos and Jeeps for export to growing markets in North America, Latin America and Asia.