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Italy reportedly guarantees $7.1 billion loan to Fiat Chrysler

ROME — Italy has approved a decree offering state guarantees for a 6.3-billion euro ($7.1 billion) loan to Fiat Chrysler's (FCA)  Italian unit, a source said, paving the way for the largest crisis loan to a European carmaker. The source said Italy's audit court had signed off on the decree, in a final step of what had been a lengthy and contested process to get the loan approved. The court's approval follows an earlier endorsement by the economy ministry. "The audit court authorized the decree," said a source close to the matter, asking not to be named because of its sensitivity. FCA's Italian division has tapped Rome's COVID-19 emergency financing schemes to secure a state-backed, three-year facility to help the group's operations in the country, as well as Italy's car sector in which about 10,000 businesses operate, weather the crisis triggered by the coronavirus emergency. The loan will be disbursed by Italy's biggest retail bank Intesa Sanpaolo, which has already authorized it pending the approval of guarantees the government will provide on 80% of the sum through export credit agency SACE. The request for state support has sparked controversy because FCA is working to merge with French rival PSA and the holding for the Italian-American carmaker is registered in the Netherlands. FCA's global brands include Fiat, Jeep, Dodge and Maserati. It was not immediately clear what conditions, if any, Italy has set as part of the guarantees and whether they would affect FCA's planned 5.5 billion euro ($6.2 billion) extraordinary dividend, which is a key element in the merger with PSA. FCA, whose shares were down 0.5% by 0908 GMT, had no immediate comment.   Earnings/Financials Chrysler Fiat Peugeot Italy

FCA recalls 1.25M trucks for software error in fatal crash

WASHINGTON - Fiat Chrysler Automobiles said Friday it would recall more than 1.25 million pickup trucks worldwide to address a software error linked to reports of one crash death and two injuries. The error code could temporarily disable the side air bag and seat belt pretensioner deployment during a vehicle rollover spurred by a significant underbody impact, such as striking onroad debris or driving off-road, the Italian-American automaker said. The company will reprogram computer modules in the affected vehicles to address this error. The recall covers 1.02 million 2013-16 Ram 1500 and 2500 pickups, and 2014-2016 Ram 3500 pickups in the United States, 216,007 vehicles in Canada; 21,668 in Mexico; and 21,530 outside North America, the automaker said. Fiat Chrysler said the recall would begin in late June. In the event of the software error code, the problem could temporarily be addressed by turning the vehicle off and then on, the company said. The automaker told the U.S. National Highway Traffic Safety Administration it began investigating the issue in December after it received notice of a suit involving a 2014 Ram 1500 in which the airbag failed to deploy in a rollover crash.Reporting by David ShepardsonRelated Video: Recalls Chrysler Fiat Truck FCA airbag fiat chrysler automobiles

Jeep and Ram could be spun off from FCA, says Marchionne

Jeep is surely the biggest single feather left in the cap of the Fiat Chrysler Automobiles portfolio. Under Sergio Marchionne's leadership, Jeep went from fewer than 500,000 annual sales in 2008 to 1.4 million in 2016, and is on track for 2 million by 2018. Add in the brand's legacy, status as one of the most recognizable nameplates in the world, and rabid fan base, and Jeep has extraordinary monetary value to its parent company. Investors and analysts have certainly noticed Jeep's inherent value. According to The Detroit Free Press, Morgan Stanley's Adam Jonas asked FCA chief Sergio Marchionne if he would ever consider spinning Jeep and Ram, FCA's dedicated truck brand, into a separate corporate entity, and he responded with a simple "Yes." Jonas estimated Jeep's worth in January of this year at $22 billion. Ram was valued at $11.2 billion. Marchionne has a history of spinning off brands while keeping them part of FCA's corporate umbrella. The most noteworthy example of this value maximization was with Ferrari, which now trades on the New York Stock Exchange and rakes in $3.4 billion in annual revenue and close to $435 million in net income, reports the Free Press. Marchionne still serves as chairman and CEO of Ferrari, and Fiat heir John Elkann owns 22 percent of the Italian marque's shares. Even if the offloading of Jeep and Ram into a separate entity would amount to little more than a profit-driven ownership change on paper, it would be huge news to the brands' loyal fanbases. In any case, such a move would likely take years to actually happen and probably wouldn't mean much at all to the products that Jeep and Ram produce. In other words, Jeep fans can keep the pitchforks in the shed ... for now. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.