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Fiat pondering swallowing rest of Chrysler, US IPO

At the moment, Fiat is in court with the United Auto Workers, waiting for the justice system to provide some guidance on a fair price for 41.5-percent of Chrysler it doesn't own. Fiat owns 58.5 percent of the company and wishes to buy the remainder, which is owned by the union's VEBA retiree trust, but the Italian company and the UAW are on different sides of the galaxy when it comes to assigning a fair price to that outstanding stake.
Naturally, Fiat CEO Sergio Marchionne is considering his options. A new report in the The Wall Street Journal says one of the scenarios being considered now is - depending on the outcome of the court case - to purchase the 41.5-percent stake and then issue an IPO to recoup some of the cost. About two months ago, Marchionne put the odds of an IPO for a wholly combined Fiat/Chrysler at 50 percent. Even with the WSJ report, it's not clear if those odds have changed.
The current company structure leaves a lot of options as to how a potential IPO could be issued, but it's said that Marchionne is against it, preferring "to be one company," under Fiat, indivisible. If Fiat is finally able to purchase all of the Pentastar, it would get access to Chrysler's war chest, pegged at $11.9 billion at the end of Q3 in 2012, and that money can't come soon enough for a brand taking a beating in Europe and delaying product over cash concerns.

Stellantis reports $15B profit in first year of merger

FRANKFURT, Germany — Automaker Stellantis said Wednesday that it made 13.4 billion euros ($15.2 billion) in its first year after it was formed from the merger of Fiat Chrysler Automobiles and PSA Group. The earnings nearly tripled profits compared with its pre-merger existence as two separate companies, as the maker of Jeep, Opel and Peugeot vehicles exploited cost efficiencies from combining the businesses. The result compared to a combined 4.79 billion euros for the separate companies in 2020 before the merger, which took effect on Jan. 17, 2021. Revenue for the combined business rose 14%, to 152 billion euros. CEO Carlos Tavares said the results “prove that Stellantis is well positioned to deliver strong performance" and had overcome “intense headwinds” during the year. Automakers have struggled with shortages of key parts such as semiconductor electronic components and rising costs for raw materials as the global rebound from the worst of the coronavirus pandemic brings more demand. The company said the benefits of the merger were worth some 3.2 billion euros during the year. Mergers can lead to streamlined costs as companies combine functions and spread fixed costs over a larger revenue base. The company accelerated its rollout of battery-powered vehicles, with sales of low-emission vehicles reaching 388,000 — an increase of 160%. Stricter environmental regulations in Europe and China are pushing automakers to roll out more electric vehicles with longer range. Stellantis started production of a hydrogen fuel cell commercial van under its Opel brand in December. Stellantis' other brands include Chrysler, Citroen, DS, Fiat, Maserati, Ram and Vauxhall. Related video: Earnings/Financials Chrysler Dodge Ferrari Fiat Jeep RAM Citroen Opel Peugeot Vauxhall

Scandal-rocked UAW extends Ford, FCA contracts, prepares to strike GM

DETROIT — Leaders of the United Auto Workers union have extended contracts with Ford and Fiat Chrysler indefinitely, but the pact with General Motors is still set to expire Saturday night. The move puts added pressure on bargainers for both sides as they approach the contract deadline and the union starts to make preparations for a strike. The contract extension was confirmed Friday by UAW spokesman Brian Rothenberg, who declined further comment on the talks. The union has picked GM as the target company, meaning it is the focus of bargaining and would be the first company to face a walkout. GMÂ’s contract with the union is scheduled to expire at 11:59 p.m. Saturday. ItÂ’s possible that the four-year GM contract also could be extended or a deal could be reached, but itÂ’s more likely that 49,200 UAW members could walk out of GM plants as early as Sunday because union and company demands are so far apart. Picket line schedules already have been posted near the entrance to one local UAW office in Detroit. Art Wheaton, an auto industry expert at the Worker Institute at Cornell University, expects the GM contract to be extended for a time, but he says the gulf between both sides is wide. “GM is looking through the windshield ahead, and it looks like nothing but land mines,” he said of a possible recession, trade disputes and the expense of developing electric and autonomous vehicles. “I think thereÂ’s really going to be a big problem down the road in matching the expectations of the union and the willingness of General Motors to be able to give the membership what it wants.” Plant-level union leaders from all over the country will be in Detroit on Sunday to talk about the next steps, and after that, the union likely will make an announcement. But leaders are likely to face questions about an expanding federal corruption probe that snared a top official on Thursday. Vance Pearson, head of a regional office based near St. Louis, was charged with corruption in an alleged scheme to embezzle union money and spend cash on premium booze, golf clubs, cigars and swanky stays in California. ItÂ’s the same region that UAW President Gary Jones led before taking the unionÂ’s top office last year. Jones and other union executives met privately at a hotel at Detroit Metropolitan Airport on Friday. After the meeting broke up, JonesÂ’ driver and others physically blocked an AP reporter from trying to approach him to ask questions.