FCAU - Fiat Chrysler Automobiles

[investor-man]

Bleh Jeep's commercial was terrible too. They look like they came from the same agency. Time for a new agency

[argonaut]

I actually liked the Maserati commercial...just my .02...jeep was like a Subaru commercial.

[investor-man]

The Chrysler commercial was better. Looked like the same agency as the other two

[phil_Buffett]

i liked both. the cars are great. ghibli is very nice and the new 200 is amazing.

[zippy1]

DETROIT, Feb 3 (Reuters) - Chrysler Group's U.S. January sales rose 8 percent on the strength of its Jeep and Ram truck brands.

 

Chrysler, a unit of Fiat Chrysler Automobiles, said it expected overall U.S. industry auto sales to be 15.6 million vehicles on a seasonally adjusted annualized basis. The company's forecast includes medium and heavy trucks, which typically account for between 200,000 and 300,000 vehicles annually.

 

Chrysler's Jeep Cherokee SUV sold five times more vehicles in January than the Jeep Liberty, the model it replaced in the brand's lineup, sold a year ago.

http://finance.yahoo.com/news/chrysler-u-january-sales-8-131707219.html

[Grenville]

Just finished reading Once Upon a Car. Thanks for the book recommendations!

 

I enjoyed Mondo Agnelli more but Once Upon a Car was a good overview of the big three through the financial crisis. There wasn't much about Sergio or Fiat until the very end of the book.

[zippy1]

Refinanced high interest rate bond with lower interest rate bond and to save $400million in next 3 years.

http://finance.yahoo.com/news/chrysler-seals-4-8-bln-083956499.html

MILAN, Feb 5 (Reuters) - Chrysler Group is set to raise about $4.8 billion in debt that will use to repay an existing bond, allowing the U.S. car maker owned by Italy's Fiat to save around $134 million a year in interest costs between 2014 and 2016.

 

Fiat Chrysler said on Wednesday that U.S. unit Chrysler, now merged into the new FCA group, had priced $1.375 billion in senior debt due in 2019 to yield 6.165 percent. It also priced a $1.38 billion 2021 senior bond to yield 6.433 percent. Both issues are top-ups of existing bonds.

 

Chrysler also plans to increase an existing term loan by $250 million and to sign a new $1.75 billion secured term loan facility.

 

The car maker will use all proceeds to repay a bond issued in June 2009 to healthcare trust VEBA for $4.587 billion and pocket total savings of $402 million by 2016.

[fareastwarriors]

The new Fiat Chrysler faces a rougher road than most think

 

 

http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River

[ZenaidaMacroura]

The new Fiat Chrysler faces a rougher road than most think

 

 

http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River

Seems like the writer just really wanted to hammer through his point - the person he contacted seemed to be implying that the pension obligation was already in the equation even when they only owned a majority interest in Chrystler.  It really makes no difference unless they had originally planned to renege in some fashion.

 

Fortune writer: You realize acquiring the remaining stake makes Fiat liable for Chrystler's Pension shortfall?

 

Fiat response:  Those obligations have been on Fiat's balance sheet since 2011.  This is not a new concern.

 

Fortune writer: This is a huge deal!  Whereas previously you were only likely liable, now you're definitely liable.  You guy's are such cowboys. 

 

 

[Grenville]

The new Fiat Chrysler faces a rougher road than most think

 

 

http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River

 

The article does bring up something I wasn't aware of, pension liability that pierces the corporate veil. I'd like to get separate confirmation of this. In a worst case scenario now that Chrysler is fully owned, the author states that pension liabilities stay with Fiat even if they let Chrysler fall into bankruptcy.

 

On a related note, when I read Once Upon a Car, Daimler Chrysler was described as being very motivated to get rid of Chrysler. The reasoning was two fold, one the lack of profitability and the other the ballooning healthcare liability. I wonder if this pseudo successor liability was the real reason.

 

[Lazarus Long]

I believe the Fortune article is correct. A non-U.S. parent company would be liable for pension termination and withdrawal liabilities of U.S. subsidiaries in its controlled group. The "controlled group" test under ERISA is generally 80% ownership. Here is a White & Case note discussing this situation: http://www.whitecase.com/files/Publication/a0f7221a-dd2d-4bdd-b5ef-6b9c360c43be/Presentation/PublicationAttachment/0050aa39-081f-4265-91c3-72c3e8a50cb4/article-Long-Arm-ERISA-M-Hamilton.pdf.

 

Here is one from Sidley describing the "piercing the veil" issue with respect to private equity funds and their portfolio companies: http://www.sidley.com/tax-update-09-11-2013/. Sidley's note states that "[w]here a single private equity fund acquires a portfolio company ... it is very likely that the fund will be part of the ERISA controlled group of that portfolio company. By implication, all of the other current and future portfolio companies of that fund would also be part of the controlled group (assuming that the fund owns at least 80% of the equity of each of these portfolio companies)."

 

 

 

[Grenville]

I believe the Fortune article is correct. A non-U.S. parent company would be liable for pension termination and withdrawal liabilities of U.S. subsidiaries in its controlled group. The "controlled group" test under ERISA is generally 80% ownership. Here is a White & Case note discussing this situation: http://www.whitecase.com/files/Publication/a0f7221a-dd2d-4bdd-b5ef-6b9c360c43be/Presentation/PublicationAttachment/0050aa39-081f-4265-91c3-72c3e8a50cb4/article-Long-Arm-ERISA-M-Hamilton.pdf.

 

Here is one from Sidley describing the "piercing the veil" issue with respect to private equity funds and their portfolio companies: http://www.sidley.com/tax-update-09-11-2013/. Sidley's note states that "[w]here a single private equity fund acquires a portfolio company ... it is very likely that the fund will be part of the ERISA controlled group of that portfolio company. By implication, all of the other current and future portfolio companies of that fund would also be part of the controlled group (assuming that the fund owns at least 80% of the equity of each of these portfolio companies)."

 

Interesting. What would happen if they spun off Ferrari? It seems easier for them to keep liability to the controlled group's existing assets. Dividends and other distributions would be hard to claw back unless they were only done to avoid the pension liability. 

[skanjete]

The new Fiat Chrysler faces a rougher road than most think

 

 

http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River

 

I find it striking how the international press keeps on being negative about Fiat-Chrysler.

This article is a good example. The merger/take-over is without a doubt a positive thing for Fiat. Still, they try to give it a negative twist. No wonder the share is cheap.

 

Fundamentally : I suppose Marchionne and Elkann were aware of the pension liability when they tried to take over Chrysler. A takeover implies that you take over all assets and all liabilities, isn't it? Besides, the article turns things upside down. For, at the moment, it's Fiat that's needing Chrysler to survive, not the other way around.

 

It's exactly these kind of articles that make me so positive about the stock. The first time I gave an order to my broker to buy Fiat stock, he started laughing and since then he regularly bombards me with negative press articles and negative analyses about the company. I need only respond with the share performance ;).

[ZenaidaMacroura]

The new Fiat Chrysler faces a rougher road than most think

 

 

http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River

 

I find it striking how the international press keeps on being negative about Fiat-Chrysler.

This article is a good example. The merger/take-over is without a doubt a positive thing for Fiat. Still, they try to give it a negative twist. No wonder the share is cheap.

 

Fundamentally : I suppose Marchionne and Elkann were aware of the pension liability when they tried to take over Chrysler. A takeover implies that you take over all assets and all liabilities, isn't it? Besides, the article turns things upside down. For, at the moment, it's Fiat that's needing Chrysler to survive, not the other way around.

 

 

That's what I tried to emphasize in my (badly done?) lampoon.  I would have thought it was not a surprise regarding the pension liability.  Clearly if they wanted to they could have spun off ferrari ex ante.  That wasn't part of the plan because they fully anticipate being able to service the shortfall.  Not to mention it was already reflected on the balance sheet before acquiring the remainder of the Chrystler stake.  The Pension is conceptually the same as  debt - I would think anyone in the position of acquiring a company would be familiar with the concept of EV...

[Olmsted]

The new Fiat Chrysler faces a rougher road than most think

 

 

http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River

Seems like the writer just really wanted to hammer through his point - the person he contacted seemed to be implying that the pension obligation was already in the equation even when they only owned a majority interest in Chrystler.  It really makes no difference unless they had originally planned to renege in some fashion.

 

Fortune writer: You realize acquiring the remaining stake makes Fiat liable for Chrystler's Pension shortfall?

 

Fiat response:  Those obligations have been on Fiat's balance sheet since 2011.  This is not a new concern.

 

Fortune writer: This is a huge deal!  Whereas previously you were only likely liable, now you're definitely liable.  You guy's are such cowboys.

 

Article seems factually correct on most points, but the synthesis of those points is dumb.

[paologorgo]

TURIN (Reuters) – Italy’s luxury carmaker Ferrari does not plan to move to the Netherlands, the company said on Friday, denying media reports in Italian dailies.

 

“Ferrari has been based in Maranello since 1947 and will remain there with its cars and its brand,” the company said in a statement.

 

Ferrari’s parent company Fiat <FIA.MI> said last month it would register the holding of its newly created Fiat Chrysler Automobiles group in the Netherlands and set its tax domicile in Britain. <ID:I6N0KJ04D>

 

Italian daily Il Giornale reported on Friday the luxury carmaker would move its newly created merchandising company to the Netherlands or the UK.

 

http://www.euronews.com/business-newswires/2336574-italy-ferrari-says-will-not-move-brand-to-the-netherlands/

[fareastwarriors]

Fiat's Move Risks Sticker Shock

 

A possible new first for Italian engineering: making shares of Fiat suddenly look more expensive.

 

Under Chief Executive Sergio Marchionne's new plan, Fiat and its Chrysler Group subsidiary will combine into a Netherlands-based holding company, with a U.K. tax domicile and a New York stock listing. Each leg of the structure will confer a benefit for the new Fiat Chrysler Automobiles. The Netherlands has more relaxed board requirements than many other countries. The U.K. offers lower tax rates. And the U.S. has deep capital markets with low borrowing costs.

 

But along with moving its primary listing to the U.S., Fiat Chrysler might also move its financial reporting to U.S. generally accepted accounting principles, known as GAAP.

 

This isn't required; the company could also remain on international financial reporting standards, or IFRS. But if the goal is better access to U.S. stock and bond investors, a switch may make sense. On a recent conference call, Mr. Marchionne said the company will "provide U.S. GAAP reconciliation, even if we stick to IFRS as the primary reporting standard."

 

Unlike international standards, under U.S. accounting companies aren't allowed to capitalize research and development spending. The latter lets a company move some research and development spending from the profit-and-loss statement to the balance sheet. ISI Group analysts reckon that in 2013 R&D capitalization boosted combined earnings before interest and taxes at Fiat and Chrysler by about 60%.

 

Fundamentally, switching to U.S. accounting would change nothing for Fiat Chrysler. Its cash flow would be the same regardless of which convention it adopts. But its valuation might look less flattering to a stock market that doesn't always stick religiously to the fundamentals.

 

Fiat's stock trades at about 9.8 times last year's earnings, in the same neighborhood as Ford Motor's  price/earnings ratio of 9.3 times and Volkswagen's  9.1 times. But ISI estimates that under U.S. accounting, the company would have actually lost about $50 million in 2013, rather than posting net income of about $1.2 billion at current exchange rates.

 

Switching accounting might make sense with the stock adopting New York as its home. But it would also offer investors a peek under Fiat Chrysler's hood that makes the price on the windshield look like less of a deal.

 

 

http://online.wsj.com/news/articles/SB10001424052702304450904579368814230831056?mod=Markets_newsreel_2

[phil_Buffett]

Fiat's Move Risks Sticker Shock

 

A possible new first for Italian engineering: making shares of Fiat suddenly look more expensive.

 

Under Chief Executive Sergio Marchionne's new plan, Fiat and its Chrysler Group subsidiary will combine into a Netherlands-based holding company, with a U.K. tax domicile and a New York stock listing. Each leg of the structure will confer a benefit for the new Fiat Chrysler Automobiles. The Netherlands has more relaxed board requirements than many other countries. The U.K. offers lower tax rates. And the U.S. has deep capital markets with low borrowing costs.

 

But along with moving its primary listing to the U.S., Fiat Chrysler might also move its financial reporting to U.S. generally accepted accounting principles, known as GAAP.

 

This isn't required; the company could also remain on international financial reporting standards, or IFRS. But if the goal is better access to U.S. stock and bond investors, a switch may make sense. On a recent conference call, Mr. Marchionne said the company will "provide U.S. GAAP reconciliation, even if we stick to IFRS as the primary reporting standard."

 

Unlike international standards, under U.S. accounting companies aren't allowed to capitalize research and development spending. The latter lets a company move some research and development spending from the profit-and-loss statement to the balance sheet. ISI Group analysts reckon that in 2013 R&D capitalization boosted combined earnings before interest and taxes at Fiat and Chrysler by about 60%.

 

Fundamentally, switching to U.S. accounting would change nothing for Fiat Chrysler. Its cash flow would be the same regardless of which convention it adopts. But its valuation might look less flattering to a stock market that doesn't always stick religiously to the fundamentals.

 

Fiat's stock trades at about 9.8 times last year's earnings, in the same neighborhood as Ford Motor's  price/earnings ratio of 9.3 times and Volkswagen's  9.1 times. But ISI estimates that under U.S. accounting, the company would have actually lost about $50 million in 2013, rather than posting net income of about $1.2 billion at current exchange rates.

 

Switching accounting might make sense with the stock adopting New York as its home. But it would also offer investors a peek under Fiat Chrysler's hood that makes the price on the windshield look like less of a deal.

 

 

http://online.wsj.com/news/articles/SB10001424052702304450904579368814230831056?mod=Markets_newsreel_2

 

in the last few months i dont saw 1, exactly one positive article from wsj about fiat. only negative. they bashing so hard  >:(

[muscleman]

Fiat's Move Risks Sticker Shock

 

A possible new first for Italian engineering: making shares of Fiat suddenly look more expensive.

 

Under Chief Executive Sergio Marchionne's new plan, Fiat and its Chrysler Group subsidiary will combine into a Netherlands-based holding company, with a U.K. tax domicile and a New York stock listing. Each leg of the structure will confer a benefit for the new Fiat Chrysler Automobiles. The Netherlands has more relaxed board requirements than many other countries. The U.K. offers lower tax rates. And the U.S. has deep capital markets with low borrowing costs.

 

But along with moving its primary listing to the U.S., Fiat Chrysler might also move its financial reporting to U.S. generally accepted accounting principles, known as GAAP.

 

This isn't required; the company could also remain on international financial reporting standards, or IFRS. But if the goal is better access to U.S. stock and bond investors, a switch may make sense. On a recent conference call, Mr. Marchionne said the company will "provide U.S. GAAP reconciliation, even if we stick to IFRS as the primary reporting standard."

 

Unlike international standards, under U.S. accounting companies aren't allowed to capitalize research and development spending. The latter lets a company move some research and development spending from the profit-and-loss statement to the balance sheet. ISI Group analysts reckon that in 2013 R&D capitalization boosted combined earnings before interest and taxes at Fiat and Chrysler by about 60%.

 

Fundamentally, switching to U.S. accounting would change nothing for Fiat Chrysler. Its cash flow would be the same regardless of which convention it adopts. But its valuation might look less flattering to a stock market that doesn't always stick religiously to the fundamentals.

 

Fiat's stock trades at about 9.8 times last year's earnings, in the same neighborhood as Ford Motor's  price/earnings ratio of 9.3 times and Volkswagen's  9.1 times. But ISI estimates that under U.S. accounting, the company would have actually lost about $50 million in 2013, rather than posting net income of about $1.2 billion at current exchange rates.

 

Switching accounting might make sense with the stock adopting New York as its home. But it would also offer investors a peek under Fiat Chrysler's hood that makes the price on the windshield look like less of a deal.

 

 

http://online.wsj.com/news/articles/SB10001424052702304450904579368814230831056?mod=Markets_newsreel_2

 

in the last few months i dont saw 1, exactly one positive article from wsj about fiat. only negative. they bashing so hard  >:(

 

Yep. I really wonder if WSJ and other news sites have collaboration with some big HFs such just Steven Cohen's. Maybe those HFs got stuck into a short position, and currently losing huge, so they hoped to get bailed out by WSJ's bashing articles?

[brker_guy]

Here is one positive piece.  In case you hardcore FIATY shareholders decide to spend frivolously one day with your new found FIATY wealth, you can buy yourself a Maserati or some of these clothes for your wardrobe.  :D :D :D

 

http://store.zegna.com/us/men/maserati-capsule-collection_gid26944?tp=59202&utm_campaign=us_ca&utm_medium=email&utm_source=20140130_maserati

 

 

[vpagano]

Just got back from the Philly Auto Show today and Fiat had a nice showing. Just a few random thoughts before bed:

 

Chrysler: Chrysler 200 was featured as expected

Dodge: Not much going on, also as expected. New trims on existing models and the new Durango

Jeep: Extremely popular ride along (copied by Toyota Highlander one nearby), new Cherokee probably the most featured

Ram: Award-winning trucks showcased and popular, pretty good foot traffic, first time I heard Dad say he'd want one over Ford or GM

Fiat: All flavors and variants of 500's to look at

Ferrari: The usual, always popular.

Maserati: Noticeably more present this year, first I saw the Ghibli in person. Didn't have a chance to sit in it, but many around me were surprised at its price point and expected it to be much higher.

 

 

[fareastwarriors]

Chrysler Pays UAW Trust $5 Billion to End Bankruptcy Chapter

 

 

http://www.bloomberg.com/news/2014-02-10/chrysler-pays-uaw-trust-5-billion-to-close-bankruptcy-chapter.html

[Grenville]

Nice review of the Cherokee in the WSJ.

 

All's Well With the Jeep Cherokee's Trailhawk but the Beak

http://online.wsj.com/news/articles/SB10001424052702304680904579366752795455262?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304680904579366752795455262.html

 

It might not be the prettiest thing, but how does the new Cherokee drive? Like a champ.

[merkhet]

I disagree -- I actually like the look of the Jeep Cherokee...

[yader]

FWIW I've been seeing a lot of the Fiat 500 driving around.  Seem to hit the middle aged woman demographic.  Women spend money.  They were on the floor of a GGP mall as well.  Never saw them left alone.  Middle eastern family folks seemed to be liking them as well.