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Fiat stock rockets up after word of Chrysler deal

Now that Fiat has finalized a deal to purchase the outstanding shares of Chrysler owned by the United Auto Workers' VEBA retiree heathcare fund without having to file for an IPO, you can count the Italian automaker's stockholders among the happy. The Detroit News reports that Fiat stock closed Thursday with a 12-percent gain for the day on the Borsa Italiana, having been up by as much as 15.8 percent during the day's trading, at prices not seen since mid-2011. One trader reasoned the run was because Fiat "paid less than the market had expected and there will be no capital increase to fund this."
But there are some who worry, including bank analysts and unions. The final price of the stake will be $4.35 billion - $1.9 billion in cash from Chrysler, $1.75 billion from Fiat and extraordinary dividends in the amount of $700 million paid over three years. Adding that sum to its ledger will raise Fiat's debt level to roughly 10 billion euros ($13.8 billion), which Citibank says will make it the most indebted OEM in Europe.
Italian unions are also concerned about what the deal means for the future. Fiat CEO Sergio Marchionne has had an at-times contentious relationship with both unions and the Italian government over the future of Italian manufacturing, a fact that makes headlines because Fiat is Italy's largest private employer. At least two left-leaning unions have publicly called on Fiat to give guarantees and to explain what the deal means for its Italian operations, while a centrist union argues this is "good news for Fiat workers, for the auto industry and for our country."

Fiat gives outgoing Ferrari chairman $35M severance package

Luca di Montezemolo may not have wanted to leave Ferrari this way, but don't feel too bad for the departing chairman, because he'll be hitting the ground with a golden parachute so big that he'll never have to work again.
According to the latest reports, Fiat will pay Montezemolo 26.95 million euros (nearly $35 million) in severance pay. A little more than half of that will be paid in a lump sum of 13.71 million euros ($17.7M, equivalent to five times his annual salary) on January 31, 2015, with the rest to be paid within the next 20 years.
The payment is contingent on Montezemolo not going to work for a competitor, so don't expect to see him replacing Stephan Winkelmann at Lamborghini or Wolfgang Dürheimer at Bugatti any time soon. At least not until March 2017. Of course with that much cash on hand, the 67-year-old marquis need never work again, but considering how busy he's used to keeping himself, we'd be surprised if he didn't pop up again somewhere.

Fiat to replace Punto with five-door 500

While American drivers may know Fiat principally (if not exclusively) for the 500, overseas the Italian marque offers a much broader range of products. But the Cinquecento has developed into a vastly more successful product than the rest of its lineup, so the Italian automaker has been rapidly replacing its slow-selling models by expanding the 500 family.
The original 500 hatchback has since been joined by the 500C convertible and larger 500L - not to mention the 500L Living seven-seater, 500e electric hatchback and numerous Abarth models. And soon, the Sedici is expected to be replaced by a new 500X. But that's not the end of it.
A new report from Auto Express indicates that Fiat is preparing to replace the slow-selling and rapidly aging Punto with a new five-door version of the 500. The model could adapt the current Punto's platform rather than stretching the 500's, but would carry the same retro styling as the rest of the Cinquecento range, slotting in between the three-door hatch and the larger 500L. Of course, the Punto was never offered Stateside, but as part of the 500 family, it figures to stand a better chance.