June 21, 2018
The month of May was a notable time for the present and the future of Fiat Chrysler Automobiles (FCA). The automaker announced that by the end of May, it would have more cash on hand than debt in its books for the first time since the merger that brought about the new company in 2009. At the same time, FCA also announced its coming long-term plans in Balocco, Italy. In his last year as CEO, Sergio Marchionne donned a blue necktie as a sign of the company’s conquered financial goals, improved margins, and growing global profits.
The future of FCA focuses on Jeep, Ram, Alfa Romeo, and Maserati. Electric vehicles will be the new norm for these brands in addition to new segments of current brands. In the works are a midsize Ram pickup, a three-row Grand Cherokee, and a Maserati midsize crossover. Additionally, FCA will phase out all of its diesel passenger cars in Europe by 2021.
At the same time, the future of their mass-marketed brands such as Dodge, Fiat, and Chrysler still hang in the balance. No specific product presentations were discussed involving these brands. Which could be part of the reason that FCA shares fell 7.2 percent on the day of the announcement and closed at $21.55. However, a company spokesperson said that these brands will not be eliminated completely. Although rumors have surfaced about the combining of the brands Alfa Romero and Maserati, executives downplayed this idea saying that they will own each asset individually and build them to be profitable.
Vincenzo Longo, a strategist for the IG group in Milan said that Marchionne’s plan is solid and ambitious. He went on to say that it confirmed all of the expectations from investors. Although, many believed and hoped that they would hear about a deal between Alfa Romero and Maserati. In addition, Adam Jones, an analyst at Morgan Stanley reported that the financial targets were more conservative than had been expected.
Other analysts were questioning why an outgoing CEO who retires next year would reveal a five-year plan without naming a successor. Marchionne said that the culture of FCA after its near-death experiences will rely mainly on improvisation. He went on to say that the destination has been identified and his successor could adapt the plan he or she chooses in order to reach that destination.
There has also been speculation regarding the company being sold after Marchionne leaves. Fiat Chrysler Chairman John Elkann who also happens to be a part of Fiat’s founding Agnelli family said that after over 100 years, he has never seen a brighter future. He went on say that the family welcomes combinations that would strengthen the brand, the family is not looking to sell the company.