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This is a CBC news story...


Quote:Fiat SpA announced Wednesday plans to become a global automaker, producing as many as six million cars by 2014.

CEO Sergio Marchionne said the company will spin off its farm and construction vehicle businesses in order to "give birth" to the bigger automaker.
CEO Sergio Marchionne says now is the best time to spin off Fiat's farm and construction vehicle businesses.CEO Sergio Marchionne says now is the best time to spin off Fiat's farm and construction vehicle businesses. (Massimo Pinca/Associated Press Photo)

Marchionne said the company believes "right now" is the time to carry out the spinoff. He said it could be completed by the end of the year.

Marchionne said Fiat didn't do it earlier because it needed the collective strength of all the business to turn the company around after he took over in 2004.

The announcement came as Fiat, which controls U.S.-based Chrysler LCC, reported a first-quarter loss of $34 million US and forecast its auto business will be hurt this year by the elimination of cash-for-clunker programs in Europe.

Chrysler also reported Wednesday that it cut its net loss to $197 million in the first quarter by cutting costs, increasing manufacturing efficiency and getting better pricing.

The red ink was far less than the staggering $3.8 billion that Chrysler lost from the time it left bankruptcy protection June 10 through the end of last year, and the company says it is a sign that its turnaround plans are starting to work.

Chrysler said it posted a $143 million operating profit from selling cars and trucks, before interest and taxes. Moreover, it generated $1.5 billion in cash, raising its reserves to $7.4 billion and reducing the likelihood that it will need more government aid.

Read more: http://www.cbc.ca/money/story/2010/04/21/fiat-growth-plans.html#ixzz0ll1J5QBy


Going to be very interesting...
 

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Looks like a straight demerger, the Agnellis will still remain in contol.

Have visted CNH office at Schipol and Turin - solidly in the Fiat empire.

Have noticed in recent months all CNH advertsing has had a 'Fiat Group' logo as a strapline - methinks this has been in the planning for a long time. Also demerging when the global economies are at a low in the cycle means that both groups can look to cyclical growth as economies recover flattering their balance sheets, allowing further growth.
 

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April 21 (Reuters) - Italian industrial group Fiat SpA (FIA.MI) said it would split off its Iveco truck unit and farm equipment maker CNH Global NV (CNH.N) from its auto business.

The spin-off was announced as part of Fiat's 2010-2014 strategy presentation, the company's first since it took management control of U.S. carmaker Chrysler last year. [ID:nLDE63K0PO]

Here are some highlights of Fiat's presentation:

SPIN-OFF

-- New company to be called Fiat Industrial. It will own CNH, Iveco and FPT Industrial & Marine units

-- Timetable calls for demerger by end-2010

-- New company to be listed on Milan bourse

-- Each Fiat shareholder to own one Fiat share and one of Fiat Industrial after split-off

-- Fiat Industrial classes of shares will mirror Fiat's current structure

-- Fiat Industrial targets 29 billion euros revenue in 2014

-- Demerger should be neutral from tax viewpoint

-- Split-off will provide strategic, financial clarity

COMBINED CHRYSLER, FIAT

-- Combined Chrysler, Fiat revenues to be 93 bln euros in 2014. Fiat's revenues were 50.1 billion euros last year

-- Combined Chrysler, Fiat trading profit seen at 6.8 bln euros in 2014

-- Combined Chrysler, Fiat cumulative EBITDA seen at 36-38.6 bln euros in 2010-2014

-- Combined Chrysler, Fiat net income seen at 4.8-5 bln euros in 2014

-- Combined Chrysler, Fiat cumulative dividends seen at 1.9 bln euros in 2010-2014

FIAT AUTO

-- Net revenues target 51 billion euros in 2014

-- Trading margin between 4.3 pct and 5.1 pct in 2014

-- Fiat 1.5 bln euros of cumulative synergies with Chrysler to 2014

-- Fiat sees combined Fiat and Chrysler sales of 6 million units by 2014

-- Full leverage of more than 60 bln euros in purchasing power in 2014

-- Joint purchasing by Chrysler and Fiat is expected to save 2.9 billion euros through 2014

-- Fiat expects gross savings of 1.4 billion euros on direct materials to 2014

INCREASED REVENUES AT UNITS

-- Powertrain unit is targeting a trading margin between 7.9 and 8.7 percent in 2014. Revenues are seen at 10.7 billion euros, up from 5 billion euros last year

-- CNH has forecast revenues of $19.9 billion in 2014, up from $14.1 billion last year

-- Iveco revenues were forecast at 12.1 billion euros ($16.26 billion) in 2014, up from 7.2 billion in 2009

-- Luxury brands Maserati and Ferrari revenues are seen at 3.9 billion euros in 2014 from 2.2 billion euros last year [ID:nWEB1145]

FORECASTS:

-- Fiat confirmed its 2010 targets for revenues, trading profit, net debt and net profit [ID:nWEB1035]

-- Fiat foresaw a 30 percent drop in the Italian auto market from April through December and a 15 percent drop in the European market this year. It sees a normalised trading environment in 2011 and afterwards

(Reporting by Jo Winterbottom, Stefano Rebaudo and Helen Massy-Beresford in Turin, writing by Ian Simpson in Milan; Editing by Michael Shields)
 
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