Marchionne Tells Fiat Stakeholders to ‘Get Off Their Butts’
Fiat’s full-year and fourth-quarter 2011 trading profit would be negative if not for its ownership stake in Chrysler, says Sergio Marchionne, who heads both auto makers.
Chrysler is solely responsible for Fiat’s positive 2011 earnings report, a division of labor that is unsustainable, warns Sergio Marchionne, CEO of both auto makers.
Fiat today reports trading profits of E2.4 billion ($3.2 billion) for full-year and E765 million ($1 billion) in the fourth-quarter, year-over-year upswings of E1.3 billion ($1.7 billion) and E446 million ($588 million), respectively.
Without contributions from Chrysler, of which Fiat owns 58.5%, the Italian auto maker reveals comparisons with 2010 would be negative: a E65 million ($86 million) full-year loss and minus-E193 million ($255 million) in red ink for fourth-quarter.
“I have absolutely of no intention of supporting (such a) nonsensical arrangement,” Marchionne says during a webcast presentation for journalists and industry analysts.
The inequity has the makings of “an unhappy marriage,” he adds, while urging Fiat stakeholders to “get off their butts.”
Fiat and its workforce now are wrestling with contentious efforts to align that auto maker’s cost structure with a feeble European market.
Fiat’s core brand, along with Alfa Romeo, Lancia and Abarth, saw a E477 million ($629 million) slide in full-year trading profit to E607 milllion ($801 million) on 1.61 million vehicle deliveries worldwide, a 4.6% shortfall compared with 2010. In contrast, Chrysler brought in E1.4 billion ($1.8 billion), Fiat says.
Fiat defines trading profit as income before restructuring, net financial expenses, income taxes, minority interests and equity in income, or losses, of unconsolidated subsidiaries and affiliates.
The Italian auto maker also lost 0.8 points of share in the all-important European region, where a 7.2% sales gain in Germany could not offset declines in markets such as Italy (-12%), France (-15.8%) and Spain (-21.6%).
Fiat’s sales in Europe plunged 10.7% to 860,000 units, a performance the auto maker blames on an unfavorable mix.
Against this backdrop, Marchionne warns conditions this year in Europe do not suggest “a walk in the park.”
Accordingly, in a statement signed by Marchionne and Chairman John Elkann, Fiat says the economic climate in Europe has cast doubt on previous volume assumptions, prompting full-year 2012 Fiat-Chrysler trading-profit guidance of E3.8 billion ($5 billion) to E4.5 billion (5.9 billion).
Among the anticipated bright spots are the ongoing launches of the all-new Fiat Panda subcompact cross/utility vehicle and the Fiat Freemont midsize CUV, which shares a platform with the Dodge Journey.
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