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Fiat shareholders green-light Chrysler merger, end of an Italian era

Fiat has just taken a major step away from its Italian heritage, as shareholders officially approved the company's merger with Chrysler. That move will lead to the formation of Fiat Chrysler Automobiles NV, a Dutch company based in Great Britain and listed on the New York Stock Exchange, according to Automotive News Europe.
The company captured the two-thirds majority at a special shareholders meeting, although there are still a few situations that could defeat the movement. According to ANE, roughly eight percent of shareholders opposed the merger, which is a group large enough to defeat the plan, should they all exercise their exit rights outlined in the merger conditions.
Meanwhile, Fiat Chairman John Elkann (pictured above, right, with CEO Sergio Marchionne and Ferrari Chairman Luca Cordero di Montezemolo), the great-great-grandson of Fiat founder Giovanni Agnelli, reaffirmed his family's commitment to the company beyond the merger. Exor, the Agnelli family's holding company, still maintains a 30-percent stake in Fiat.

Bailout dealership cuts did their job as profits surge

Almost five years after US taxpayers bailed out General Motors and Chrysler, a large majority of their slimmed-down dealership networks are posting soaring profits, Bloomberg reports, and contributing to the US auto industry on track this year to deliver 15.4 million vehicles, the most since 16.15 million were delivered in 2007.
Consider another important figure: Bloomberg says that more than 90 percent of GM dealerships are profitable, compared to about half of them in 2008 and 2009. At the start of 2013, GM had 4,355 US dealerships and Chrysler had about 2,600. Compare that with just a few years ago, when GM had 6,246 dealers in 2008, while Chrysler had 3,200 in 2009.
As part of their bankruptcy restructuring, both GM and Chrysler decided that their retail networks contained far too many dealerships and insisted that they be slimmed down. The resultant dealership terminations followed by a rebounding auto market - in part due to better new GM and Chrysler vehicles - have increased the number of sales per dealership to record levels. Many dealers are taking advantage of increasing profits and investing in facility renovations and updates, such as Chrysler dealership owner David Kelleher. He's spending $2 million to expand his store.

Trump is pleased with FCA's investment in Michigan and Ohio, but it wasn't done for him

Fiat Chrysler announced yesterday that it would be spending $1 billion on vehicle production in both Michigan and Ohio. The company estimates that its investment will yield about 2,000 jobs between both states. In addition to attracting our attention, it caught the gaze of President-elect Donald Trump, who tweeted praise to both FCA and the Ford Motor Company. He praised the latter for the company's move to cancel a new factory in Mexico. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Trump's writing also seems to imply he deserves a certain amount of credit for these shifts to American production. However, as Sergio Marchionne, CEO of FCA, explained to the press in a conference today, Trump and his impending administration had nothing to do with the decision. He said the decision to invest in the plants in Michigan and Ohio were in place well before Trump was going to be the President of the United States. In addition, he said that FCA has not been in contact with Trump or any of his colleagues regarding the decision. Marchionne also stated that neither he nor the company was making any preemptive plans for manufacturing locations the light of the upcoming Trump presidency. Rather, he said that the company will change to address regulations that are actually passed, and the only way the company could change plans ahead of new laws or taxes would be with more information and clarity. We assume that a "big border tax" isn't specific enough. Still, the fact that automakers are going out of their way to make and clarify announcements about manufacturing illustrates the massive attention Trump brings with every Tweet. Related Video: Government/Legal Plants/Manufacturing Detroit Auto Show Chrysler Fiat Sergio Marchionne FCA 2017 Detroit Auto Show