No plans to merge with Chrysler, but Fiat may increase stake
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Fiat has now officially split its industrial vehicle business from its automobile unit, and the newly stripped back Fiat Industrial was floated in Milan Monday. The CEO reiterated at the ceremony that there are no plans to merge Fiat and Chrysler.
AFP - Fiat and Chrysler chief executive Sergio Marchionne said he had no immediate plans to merge the two automakers as shares in a new stripped-down Fiat began trading on the stock exchange on Monday.
But Fiat may raise its stake in Chrysler, which it saved from bankruptcy, to 51 percent if the troubled US automaker returns to the stock market this year, he added.
"I have no plans to merge Fiat and Chrysler today," Marchionne told journalists at a ceremony organised at the Milan stock exchange for the first listing of spin-off Fiat Industrial, which contains the conglomerate's non-automotive elements.
"I think we have done a relatively decent job in the last 18 months" in terms of "industrial integration" of Fiat and Chrysler, he said, adding "a legal merger is not going to change our lives."
Italy's largest private employer, created by the legendary Agnelli family and a symbol of the country's postwar industrialisation, owns 20 percent of Chrysler.
In the biggest reorganisation in Fiat's history, it took operational control of Chrysler in June 2009 after the US automaker nearly went bankrupt.
Marchionne said it was "possible" Fiat may boost the holding to 51 percent before a planned IPO by the Chrysler Group this year.
"I think it is possible, I don't know whether it is likely, but it is possible that we will go over the 50 percent if Chrysler decides to go to the market in 2011," he said.
In September 2010 Fiat shareholders approved the Italian auto giant's plan to separate its car and non-car making activities as part of a drive to increase its global clout.
In the spin off, which took effect on January 1, Fiat's truckmaker Iveco and CNH agricultural and construction equipment manufacturer became part of the new Fiat Industrial.
Its shares opened at 9.00 euros and had slid to 8.87 euros as of 0930 GMT.
Fiat, whose carmaking operations include the Fiat, Lancia, Alfa Romeo and Maserati brands, opened at 6.9 and had climbed to 7.01 euros.
Marchionne has set ambitious financial targets for the two carmakers, saying that Fiat's turnover should double from 32 billion euros to 64 billion euros by 2014 while Fiat Industrial's should grow by 19 billion euros to 29 billion euros.
Marchionne has said the Fiat and Chrysler companies combined should produce six million vehicles by 2014.
Analysts expect the new structure to help Fiat not only integrate with Chrysler but also to form other alliances as new players come onto the scene from emerging economies such as Russia and India.
When the spin-off was first announced in April, the CEO said he hoped it would resolve one of the "strategic issues" that over the past years "has been a thorn in Fiat's side."
The car and non-car activities have different strategies, markets and capital needs.
The Italian-Canadian Marchionne, who is credited with rescuing Fiat from the brink of collapse, became Chrysler's chief executive in the deal under which Fiat contributed its small-car and green technology and the US carmaker opened the door to its sprawling distribution network.