April 21, 2011

Fiat Sees "Happiness" In Chrysler Ownership!

I thought our federal government BAILED OUT Chrysler to SAVE this US auto maker. It's sounding more like an Italian auto maker! Our government BAILED OUT and SAVED the UNION - United Auto Workers (UAW) and their egregious compensation and benefits package demands!!! The US federal government should have allowed Chrysler go through the normal bankruptcy process so it could get rid of its dead weight!!! and have a clean fresh start.


written by Lisa Jucca, Milan
Wednesday April 20, 2011

Fiat SpA (FIA.MI) is pushing ahead with plans to get 51 percent of U.S. No.3 carmaker Chrysler, a goal that boss Sergio Marchionne defined on Wednesday as "happiness" for the Italian car maker.

Fiat reported a 9 percent improvement in first-quarter trading profit helped by robust sales in Brazil and in light commercial vehicles. It predicted it would increase its 7.1 percent share of the European car market in the second half of 2011 after surprising investors by cutting its debt.

But the analysts' main focus remained Marchionne's project to integrate Fiat and Chrysler. The Italian company owns 30 percent of the U.S. group and runs it.

"If we ever get 51 percent of Chrysler, we would be more than delighted," Marchionne said when asked whether Fiat wanted to go beyond a 51 percent stake.

"Our objective within Chrysler is to refinance the debt with the U.S. Treasury and the Canadian government. This remains a key goal for Fiat," he added.

Marchionne, who runs both Fiat SpA and Chrysler, is working to repay $7 billion of Chrysler's debt with the U.S. and Canadian governments to take an additional 16 percent that would cost about $1.5 billion.

Marchionne said he did not expect damage to Fiat's credit rating from the purchase of the stake, which the Italian group is planning to pay for with its own cash.

Fiat would then take a further 5 percent in the last quarter of 2011 upon meeting the third of three milestones agreed with the United States when Fiat took control of Chrysler in 2009.


Fiat lowered its first-quarter net industrial debt to 489 million euros ($704.1 million) against expectations of a debt of 815 million in an analyst consensus distributed by Fiat.

"Revenues have been lifted by the Brazil effect, but the shares are going up because the net industrial debt has turned lower," said Erich Hauser, an analyst at Credit Suisse. Fiat's debt stood at 542 million euros at the end of 2010.

Fiat shares ended up 4.6 percent, slightly better than a 4 percent gain in the STOXX Europe 600 auto index .SXAP. Fiat's rise was in line with France's PSA Peugeot Citroen (PEUP.PA) which also reported results on Wednesday.

Fiat's shares started to trade separately from truck-and-tractor maker Fiat Industrial (FI.MI) in January.

Marchionne said Fiat had good chances to lower its net industrial debt to below a target of 1.5-1.8 billion euros in 2011, which Fiat confirmed together with other 2011 goals.

Fiat also posted a trading profit of 251 million euros, slightly above a median forecast of 245 million.

Fiat said its market share in Brazil, where it has been the car market leader for 37 consecutive quarters with a 22 percent share, would remain flat in 2011 from 2010.

"These are reassuring first-quarter results, particularly as we regard the first quarter as likely to be by far the worst delta of the year in Italy," Citi analysts said in a note.

The group is also planning to have its Alfa Romeo brand re-enter the U.S. market with a new car model in 2012 or in early 2013, Marchionne said.

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