Chrysler/Fiat to Merge: Future So Bright, Marchionne Has to Wear Shades

by Patrick Rall

While speaking recently at the Spruce Meadows Equestrian Facility in Canada on the future of the Chrysler Group, Chrysler Group and Fiat SpA CEO Sergio Marchionne stated that the company would make over $3 billion in operating profit next year. Marchionne also hinted that within the next 3 years, we can expect to see a merger between Fiat SpA and the Chrysler Group. 

It was originally speculated that the merger between the two automakers
could happen by the end of 2011, but those thoughts have been put to
rest.  However, Sergio’s recent comments confirm that the joining of the
two groups is definitely coming.

The company boss stated that he expected the Chrysler Group to sell
around 2.4 million vehicles around the world in 2012, which would bring
about an operating profit of $3 billion (sudden, unseen issues
notwithstanding).  Marchionne also stated that he expected Chrysler to
end with about 2 million vehicles sold worldwide in 2011, accounting for
an operating profit of $2 billion.  The expectations for 2011 have
remained at that number, even though the automotive industry is growing,
but questionably stable.  The company CEO also explained that the
company is still “making money” when they sell at least 1.5 million vehicles around
the world.

In addition to the lofty sales and profit numbers for the Chrysler Group
in 2011 and 2012, Sergio Marchionne stated he expects a new, combined
Fiat SpA and Chrysler Group to reach worldwide revenue amounting to over
$136 billion by 2014.  When Fiat took over the Chrysler Group earlier
this year, many expected that the joining would come quickly, but the two
companies have taken their time in commencing with the merger. Based on
what Marchionne had to say at Spruce Meadows, this union is more likely
to happen in 2012 or 2013.

As seen by the direction that the Chrysler Group was headed two years ago
compared to the way that the company is headed today, the partnership
with Fiat has only been positive.  It has brought about the
re-introduction of the Fiat brand to the North American market while
improving global sales from Chrysler. It has also increased the need for more US
production of vehicles, thus supporting the American worker.  We have
already seen the current Chrysler brand lineup rebadged and introduced
as a collection of new Lancia models, while the Dodge Journey has become
the Fiat Freemont in other markets.

Chrysler and Fiat have worked together very well since Fiat began buying
into the company. A full merger of the two companies should only
help to continue the momentum of the Chrysler Group.

Is this kind of like the difference between living together and being married? Shout off in the forums!