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  • FIAT may move HQ to US

    This could cause a s**tstorm in Italy -

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    Fiat SpA, Italy's biggest manufacturer, is considering moving its corporate headquarters to the U.S. following a planned merger with Chrysler Group LLC, three people familiar with the matter said.

    Chief Executive Officer Sergio Marchionne is evaluating the switch from Turin, where Fiat was founded in 1899, to the U.S. as the carmaker's revenue and profit center shifts to North America, the people said, asking not to be identified discussing the internal deliberations. Fiat generated 75 percent of 2012 operating profit in North America.

    No final decision on the headquarters has been made and other options are being examined, the people said. A Fiat representative declined to comment. Marchionne said last month that he favored a primary listing in New York for the company.

    Moving Fiat's headquarters away from Turin's iconic Lingotto, a former car plant with an oval track on its roof, could create a political backlash in debt-ridden Italy, where the industrial sector is in decline. The unemployment rate is near a 20-year high as companies refrain from hiring amid the country's longest recession in more than two decades.

    "It's the logical solution as the center of gravity of the group has moved to the U.S. and for its ambition of becoming a global player," said Giuliano Noci, associate dean of Milan Polytechnic's business school.

    Chrysler, based in Auburn Hills, has become the group's profit generator as Fiat struggles to end losses in Europe, which totaled more than 700 million euros ($900 million) last year.

    Fiat's dependence on Europe has been reduced drastically since it took control of Chrysler in 2009. The region in 2012 represented 24 percent of the group's 84 billion euros in revenue. When Marchionne was named CEO in 2004, Fiat relied on Europe for more than 90 percent of its 27 billion euros in sales.

    "Europe is becoming a less and less relevant fact in the scheme of things," Marchionne told analysts last month. "It's a reflection of the ability of this house to shift its interest and to shift its resources to markets that are much more rewarding in terms of investment and return."

    Marchionne also said the decision on the location of the headquarters will depend on access to capital markets and the ability of the company to get financing at "reasonable rates."

    "The U.S. capital market is more efficient than the Italian, and as a result the carmaker would probably get cheaper refinancing," said Sascha Gommel, an analyst with Commerzbank in Frankfurt, who expects Fiat to retain a listing in Milan.
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    Dr. Mordrid
    ----------------------------
    An elephant is a mouse built to government specifications.

    I carry a gun because I can't throw a rock 1,250 fps

  • #2
    Few people buy Fiat cars in Europe. They have a bad reputation for reliability and longevity, along with Alfa-Romeo, and tend towards being rust-buckets N. of the Alps (salt on roads). They may have improved over recent years, but their market share is low.
    Brian (the devil incarnate)

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    • #3
      I had a 124 coupe and spyder, both thoroughly rustproofed and with all the trick parts.. Both held up pretty well, and the spyder was especially great fun in summer. Had to keep the maintenance schedule on the button though.

      What with most of the money now coming from Chrysler & Jeep, which are doing well, it's no surprise they would move ops here. Looks like once they get 100% of Chrysler an IPO is in the offing.
      Dr. Mordrid
      ----------------------------
      An elephant is a mouse built to government specifications.

      I carry a gun because I can't throw a rock 1,250 fps

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      • #4
        Fix It Again Tony

        Friend had a 124 Spyder back in the day. It was somewhat fun but didn't have a lot of pep, especially in the high end. I don't think he had too many problems (besides the paint) until he totaled it after a few years. I don't know how well Fiat's sell here nowadays.
        <TABLE BGCOLOR=Red><TR><TD><Font-weight="+1"><font COLOR=Black>The world just changed, Sep. 11, 2001</font></Font-weight></TR></TD></TABLE>

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        • #5
          US 124's were hampered by early US smog stuff, but with a bit of engine work, a source of special parts and a cooperative dealer they gained a LOT of zip and handling. Biggest pain were those damned shims poker chips they used to adjust the valve clearances on the DOHC 4-banger.
          Dr. Mordrid
          ----------------------------
          An elephant is a mouse built to government specifications.

          I carry a gun because I can't throw a rock 1,250 fps

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          • #6
            Fiats are not bad nowadays. In fact, most modern (non-Chinese?) cars are pretty good in terms of quality and safety.

            What's a big problem in Europe is the gross overcapacity in car manufacturing. That, and sales in Europe are steadily decreasing quarter after quarter for a long time now, with no end in sight. The only way to survive is to scale up production and to out-live the smaller brands that cannot compete. Volkswagen is doing this very effectively, and I suppose there'll be far fewer manufacturers around in Europe in 10 years time.

            Especially PSA and GM have huge issues in Europe. They might be the first to go, unless the French government and GM respectively are willing to subsidize their European subsidiary for the decade to come.
            Last edited by dZeus; 17 May 2013, 00:49.

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            • #7
              Yup, we're making to many cars in to many small factories. Volkswagen, like no other (in Europe at least) got that way back and are now an efficient machine that churns out shitloads of cars in various price-ranges (a.o. Lambourghini, Audi, VW, Seat, Skoda) based on rather limited number of platforms and engines (although I guess Lambo, Porsche and Bentley are different) . Fiat, AFAIK, never got that to work with their brands (Ferrari (?), Alfa Romeo and Fiat).
              Join MURCs Distributed Computing effort for Rosetta@Home and help fight Alzheimers, Cancer, Mad Cow disease and rising oil prices.
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              • #8
                Fiat is starting to share platforms between the different brands they own; Fiat, Alfa Romeo, Lancia, Chrysler and Dodge. Ferrari and Maserati (though still owned by Fiat) is not really a part of this, except that Alfa Romeo and Maserati may share platform and components in the near future.
                What Fiat lacks is continuity in the models they put out.
                They have plenty of new and innovative technology, like Multiair (and don't forget they spearheaded the commonrail diesel injection system), but I think they need a common idea for models. They put out a great model and within a few years, they sort of forget about it, instead of renewing it and keeping it fresh.
                Quality wise, they are no different than any other european carmaker in their segment, whether it's VW, Opel, Peugeot or any other.
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                • #9
                  We should be watching Tesla. In Q1 US they outsold S-class, 7-series and A8, they're getting all manner of awards (recently a glowing report from Consumer Reports) and next week another set of major announcements is due. Rumors are a $30k car and a major expansion of their (free) SuperCharger high-speed solar charging network. Niche, but growing fast.
                  Dr. Mordrid
                  ----------------------------
                  An elephant is a mouse built to government specifications.

                  I carry a gun because I can't throw a rock 1,250 fps

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                  • #10
                    I see a lot of the new Fiat 500s here in Pickup Truck Central.
                    That's a good sign for them.
                    Chuck
                    秋音的爸爸

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                    • #11
                      My wife thinks the Fiat 500 is cute. She would probably own one if we could stuff all our kids in it.
                      “Inside every sane person there’s a madman struggling to get out”
                      –The Light Fantastic, Terry Pratchett

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                      • #12
                        Originally posted by Dr Mordrid View Post
                        We should be watching Tesla. In Q1 US they outsold S-class, 7-series and A8, they're getting all manner of awards (recently a glowing report from Consumer Reports) and next week another set of major announcements is due. Rumors are a $30k car and a major expansion of their (free) SuperCharger high-speed solar charging network. Niche, but growing fast.
                        nice, but Tesla seems to only sell 'a rich man's car'.

                        That, and how would they fare without huge US government subsidies? I'm not very convinced.

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                        • #13
                          Tesla profits are way up, they're paying off the Energy Dept. loan early, and the stock is selling so well that Musk is buying more stock to maintain his 65% stake (he's now worth about $5B.) The Tesla Model X crossover is due in a year or so, and Musk is also talking about a line of Tesla trucks. If that rumored announcement of a $30k class vehicle pans out it rounds things out nicely, for now.

                          On another front, Musk is on a campaign to convince ~20 states to modify their franchise rules supported by the National Auto Dealers Association (NADA) that deny manufacturers the ability to do direct sales - they have to sell cars through franchised dealers. So far he's doing well save for one state where the commissioner ruled no against the recommendation of advisors. NY, Texas and Massachusetts has seen NADA fail to stop him. He's now talking about taking his challenge to DC.
                          Last edited by Dr Mordrid; 18 May 2013, 04:27.
                          Dr. Mordrid
                          ----------------------------
                          An elephant is a mouse built to government specifications.

                          I carry a gun because I can't throw a rock 1,250 fps

                          Comment


                          • #14
                            Originally posted by dZeus View Post
                            nice, but Tesla seems to only sell 'a rich man's car'.

                            That, and how would they fare without huge US government subsidies? I'm not very convinced.
                            even with all the subsidies in place, Tesla seems to be burning through their cash at hyperloop speeds:
                            Tesla has been burning over $500 million per quarter for 2 quarters straight! Two more quarters and they've burned through all their cash....
                            at current rates, raising $640 million in stocks give them only 3 months more breathing time

                            At the same time, other car manufacturers, some of which run a profitable business selling ICU cars, keep pouring money into R&D to play catch-up with Tesla. These companies have vastly superior economics due to the scale of their production. For example, Audi just introduced a SUV that has 310 mile range on battery....
                            Then we have low oil prices also diminishes the current demand/need for electric cars...

                            Prediction:
                            Tesla = toast within 2 years (although Musk seems to have been able to defy the odds three times before with Tesla, so maybe a fourth time is possible?).
                            Wildcard that can change everything (very low chance of happening imo):
                            Tesla can keep alive until they can sell an autonomously driven car (self-driving car), ahead of other car manufacturers, and gain big orders from companies like Uber and insurance companies that force their most crash-prone customers to switch to self-driven cars...
                            Last edited by dZeus; 20 August 2015, 03:10.

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                            • #15
                              Tesla will be bought if they run out of cash and bankrupt.

                              As per Fiat. They are decent for the price though you wouldn't want to hold on one much longer than 8-10 years or so. Their diesels are very good engines. Fiat will be around, Italians have some unique qualities and markets and philosophy. Recently they seem to be doing OK, so I wouldn't worry about them first.

                              I'd agree that GM (Opel and Chevrolet) and Renault or PSA are more in danger at the moment. Another interesting development is Honda ceasing sales of Accord in Europe.


                              Also note that for Italy Fiat is strategic so this move might be designed to extract maximum concessions and subsidies from the Italian government. Italy is in recession recently.
                              Last edited by UtwigMU; 20 August 2015, 08:12.

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