Should Fiat Give Up On Italy And Relocate To The US?

Sergio Marchionne, chief executive of Fiat SpA and Chrysler Group LLC, said he hasn’t made any decision about where the combined automaker will be headquartered.

“The item is not on my agenda for now. Secondly, we’ve been clear and consistent on this: That this will be governed by a variety of justifications including access to capital markets and the ability to finance the house, which is the consistent view,” Marchionne said Thursday night in a Detroit News interview after he was honored at the Sons of Italy gala here. “There’s been no decision — it’s not even on my digestible list of things to do for the week.”

The Obama administration tapped Fiat in 2009 to run Chrysler after the Auburn Hills automaker was rescued as part of a $12.5 billion federal bailout and restructured through bankruptcy. Fiat initially received a 20 percent stake in Chrysler and won 15 percentage points for meeting three targets; it has since increased its stake in Chrysler to 58.5 percent. Fiat is in court sparring with the United Auro Workers health care trust fund over the value of the trust’s stake. Fiat wants to acquire the trust’s remaining 41.5 percent stake and could launch an IPO.

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mini22 - 5/28/2013 2:55:17 PM

+1 Boost

I don't think that Fiat should give up on Italy. However that's not to say there should not be a presence in Italy.Fiat/Chrysler could have some headquarters in both places(essentially they have that now). I'm not sure it matters where they are domiciled. If conditions favor domiciling in Auburn Hills they should do it. I don't think it will affect the labor unions in any way. What will affect Italian labor unions would be the amount of investment in factories in Italy. That would not matter whether Fiat is located in Turin or Auburn Hills.If the market continues to go south there is only so much Fiat can do. I'm sure the Italian government is not happy because they could not tax Fiat as much. The question is how friendly and cooperative is the Italian government towards Fiat? Marchionne seems commited to making Fiat primarily an exporter auto company from Italy. If Italy is going to tax Fiat excessively can you blame them for moving to a country with a more friendly tax rate or a country that has improving sales each month.If Fiat leaves Italy it maybe becasue the government drove them out.

mini22 - 5/28/2013 3:00:24 PM

+1 Boost

One otehr point. Doesn't Chrysler Canada still have the largest US auto presence out of the Detroit 3 in Canada.Does the fact that they have their main headquarters in the US affect this in any way. Again I don't think so. However if the Canadian auto workers force Chrysler to continue to offer higher and higher pay rates Chrysler could diminish its Canadian presence in Canada quite easily.