Marchionne, who took the helm of Fiat a decade ago and in 2009 also
started running Chrysler, had previously said he could step down in
2015 and some analysts feared uncertainty over his future at the
combined company could cloud its prospects.
After striking a $4.35 billion deal to buy out a minority
shareholder from Chrysler, the 61-year-old now has the delicate task
of listing the new company and probably establishing its
headquarters outside Fiat's home country of the last 115 years.
Marchionne told a press conference at the Detroit auto show the size
of Chrysler's operations and U.S. financial market liquidity "makes
Detroit especially relevant" as the board prepares to discuss the
merged company's headquarters at a meeting on January 29.
But he played down the consequences of the decision for jobs or
strategy, adding it would have "almost negligible" effects on
employment. Italy's government has been following the merger talks
very closely for any signs that Fiat's presence in its home market
could lessen and lead to job cuts. The company currently employs
around 62,000 people in Italy.
"We're sufficiently large now ... to need access to very fluid,
efficient capital markets," Marchionne said. "That will probably be
the single largest driver of the decision that will be made by the
board on January 29." The formal merger of the two companies is
expected to be completed by January 20.
Asked how the Italian government might react to new headquarters,
Marchionne said: "I sincerely hope they don't create obstacles."
He said a listing of the combined entity was on the agenda this
year: "Within 2014, I think."
In an interview with an Italian newspaper last week, Marchionne said
that while New York was the most liquid market, Hong Kong was also a
Fiat Chairman John Elkann, the scion of the Agnelli family that
controls the Italian carmaker, also said on Monday that he would
remain as chairman of the merged group.
"There will be a succession, but definitely not before the
conclusion of the industrial plan," Elkann said about Marchionne's
mandate and the three-year strategy due to be unveiled by May.
Fiat has said the new strategy will focus on a revamp of its Alfa
Romeo brand and keep production of the sporty marquee in Italy as it
seeks to fill underutilized plants, protect jobs and compete in the
higher-margin premium segment of the market.
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The company is battling to return its European operations to profit
after a lack of investment in new models saw Fiat hit hard in a
six-year market slump in its home region.
"The conclusion of the plan that we're going to be presenting in
four months is crucial. And the board feels a lot better about
this," Marchionne said at the press conference, referring to the
board's reaction to his extended mandate.
While recent data suggest the European car market has stabilized,
Marchionne said he did not expect a quick upturn.
"I don't see any major signs of a recovery (in Europe) in the next
12 months," he said.
The new industrial plan is due to outline investments, including new
models. Some analysts are skeptical whether Alfa Romeo can turn Fiat
around as previous attempts to revamp the brand have failed, as well
as whether the company has enough money to invest after increasing
debt to buy out Chrysler.
Marchionne said a mandatory convertible bond was one option the
company was considering to boost its capital, while he again ruled
out a share issue by either Fiat or Chrysler.
Media have speculated the size of the bond could be around 1.5
billion euros ($2 billion).
When asked about potential future tie-ups with any other group,
including Peugeot <PEUP.PA> and Suzuki <7269.T>, Marchionne repeated
he was open to a collaboration with all.
"My dossier is open with everybody," he said. "Peugeot is one
potential dialogue partner, there are others."
Fiat shares ended up 1.19 percent at 6.79 euros, outpacing a 0.7
percent rise in Milan's blue-chip index <.FTMIB>.
($1 = 0.7314 euros)
(Additional reporting by Laurence Frost
in Detroit, writing by Agnieszka Flak in Milan; editing by Louise
Heavens and Mark Potter)
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