Chrysler & Fiat Will Be Married This Sunday, Marchionne Makes Plans To Step Down

October 8, 2014

In a week when marriage is making headlines, it's only appropriate that one of the biggest hitch-ups in automotive history is set to be solemnized this weekend. According to Detroit News, Chrysler and Fiat will become one this Sunday, and -- to milk a metaphor for all it's worth -- godfather/CEO Sergio Marchionne may begin counting the days until he can step into the shadows.

The merger has been a long time coming. It's depended on Fiat's slow, steady acquisition of Chrysler, following Chrysler's blink-and-you-missed-it bankruptcy/restructuring in 2009.  

One of the last major obstacles facing the giddy couple was cleared in January, as Fiat ponied up $4.35 billion for complete ownership of Chrysler. That ended a tense standoff between Fiat and the United Autoworkers Union (which controlled Chrysler's remaining shares) and postponed Chrysler's then-looming IPO.

The rescheduled date for that IPO is this Monday, the day after the merger becomes official. The stock of London-based Fiat Chrysler Automobiles NV will be traded on both the New York Stock Exchange and its Milanese equivalent, the Borsa Italiana.


With the wedding out of the way, Marchionne can begin thinking about retirement -- or rather, "retirement". Speaking to reporters in Milan, he said that he hasn't decided what he'll do next, but turnarounds of the Chrysler/Fiat scale are out of the question.

In the meantime, Marchionne is focusing on an aggressive expansion plan for Fiat-Chrysler. He's expected to stay on as CEO through 2018 to see that plan enacted.

While many details of Marchionne's plan remain hidden, we know that his goal is to boost FCA's net income to around five billion euros by 2018 -- roughly five times the current net. To achieve that, Marchionne plans to invest nearly 50 billion euros in upscale vehicles (like new Alfa Romeo models) and to grow the global market for Jeep.

When he's done, Marchionne expects that his successor will serve in a slightly different capacity. (Hopefully, one that won't have to oversee a turnaround for a while.) He even thinks that the role of CEO could be split into multiple roles. Speculation has already begun as to who might fill his shoes, but from where we sit, 2018 is still a very long way off.


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