FCAU - Fiat Chrysler Automobiles

[vpagano]

That's a reasonable strategy, however I think many of us would agree that Fiat could pay up higher than what they want and still could a good deal for Chrysler. The synergies and global powerhouse they will create will make it seem cheap in the long run.

[vpagano]

Fiat-Chrysler could be based in the Netherlands after merger.

 

http://www.reuters.com/article/2013/07/23/us-fiat-headquarters-idUSBRE96M0KT20130723

[vpagano]

A little Fiat news out of the UK:

 

http://www.automotiveworld.com/news-releases/fiat-professional-delivers-strong-growth-in-first-six-months/

 

H1 sales figures up more than 50% YoY for Fiat Professional

[fareastwarriors]

Family Fiat for Thrifty Pope

 

Pope Francis Abandons Bulletproof Mercedes for Mass-Produced Motor.

 

http://online.wsj.com/article/SB10001424127887323610704578625623748779656.html

 

...

On his first trip to Latin America, history's first New World pope grabbed headlines with his decision to ditch the bulletproof Mercedes-Benz popemobile for a silver Fiat Idea for his inaugural drive around Rio de Janeiro.

...

 

[compoundinglife]

Interesting marketing from a Fiat dealer here in Seattle:

 

http://blog.uber.com/2013/07/26/free-rides-to-from-capitol-hill-block-party-brought-to-you-by-uber-fiat-of-kirkland/

[LC]

Interesting marketing from a Fiat dealer here in Seattle:

 

http://blog.uber.com/2013/07/26/free-rides-to-from-capitol-hill-block-party-brought-to-you-by-uber-fiat-of-kirkland/

The most satisfying part was in big bold font, "We are expecting very high demand, so keep trying if a car is not available right away."

 

I just want Fiat to put people in these cars and focus on brand awareness. The commercials are great, and I've actually seen Fiat's on the street. Good signs. Granted, the investment thesis is predicated on the market re-evaluating post the Chrysler merger, but everything else is just gravy. And I like gravy!  ;D

[vpagano]

Chrysler Q2 earnings are out:

 

http://www.prnewswire.com/news-releases/chrysler-group-reports-second-quarter-net-income-of-507-million-217553591.html

[fareastwarriors]

http://online.wsj.com/article/SB10001424127887323854904578637481905261070.html?mod=WSJ_business_whatsNews

 

Fiat Profit Lifted by Chrysler

Italian Auto Maker Would Have Suffered Loss Without Chrysler Contribution.

 

Net profit rose to €142 million ($188.3 million) from €32 million a year earlier, which was restated for accounting reasons. Without the contribution from Chrysler, which reported earnings earlier in the day, Fiat would have suffered a net loss of €247 million.

 

Fiat's second-quarter trading profit—earnings before interest, taxes and one-off items, a key figure watched by analysts—was €1.03 billion, up from a restated €947 million a year earlier. The figure was slightly higher than the €1.01 billion expected by analysts. Fiat said losses in Europe narrowed because it kept costs under control and improved its product mix with the success of the Fiat 500L, the latest addition to the 500 product range.

 

Revenue totaled €22.33 billion, up from €21.52 billion.

 

 

[jch548]

Fiat SpA : U.S. ruling may step up Fiat's Chrysler buyout settlement

 

 

07/31/2013 | 10:51am US/Eastern

 

 

Fiat may step up efforts to negotiate a full buyout of majority-owned Chrysler out of court, sources said, after a Delaware judge prolonged the Italian carmaker's legal tussle with a minority shareholder, the UAW union healthcare trust.

 

Fiat said it "looked forward" to solving a dispute with the trust in court after winning a partial victory on Tuesday in its bid to buy the 41.5 percent of Chrysler it does not own from VEBA, the United Autoworkers-affiliated healthcare trust.

 

Delaware Chancery Court Judge Donald Parsons accepted the carmaker's legal positions in two pivotal disputes with VEBA. But he stopped short of ordering VEBA to sell 54,154 Chrysler shares to Fiat for $139.7 million, as the latter had sought, saying certain questions still needed to be answered through testimony at a trial.

 

The ruling will trim an estimated $500 million from the price tag for Fiat to buy out the VEBA trust, investment bank UBS said on Wednesday, cutting its estimate of the value of VEBA's 41.5 percent stake to $4.0 billion from $4.5 billion.

 

"We view the ruling as positive for Fiat and likely to help an out-of-court agreement," said UBS analyst Philippe Houchois in a research note. "We still view end 2013 as a likely deadline for an agreement as VEBA."

 

The ruling forces the two parties to step up talks if they want to come to a deal quickly, people familiar with the matter said. But the lower price Fiat is likely to pay for the disputed part of the stake may make VEBA a tougher bargaining partner, one of them noted.

 

The UAW became Chrysler's second-largest shareholder when Chrysler emerged from bankruptcy in 2009 and the union swapped future healthcare payments owed to it for a stake. The VEBA trust manages those healthcare benefits on behalf of the union.

 

Fiat runs the two automakers as a single company, but wants to buy the rest of Chrysler to squeeze out more synergies, cut borrowing costs and access some of Chrysler's cash flow.

 

TIMELINE UNCLEAR

 

While the price tag for Fiat may now fall, the timeline for the deal remains blurred.

 

"Fiat looks forward to resolving the few remaining issues in the litigation, through the discovery requested by the judge, and remains confident that those residual issues will also be resolved in its favour," Fiat said in a statement on Wednesday.

 

Any trial is likely to take between a year and 18 months, said a person familiar with the matter. But the judge's ruling offered Fiat no indication of when it would start.

 

Fiat's lawyers will now be forced to argue in court with representatives of the healthcare trust about why Fiat should pay less than the trust is asking in a deal the latter needs to pay future benefits for retired Chrysler workers.

 

Fiat shares were volatile, rising 0.25 percent to 6.05 euros at 1429 GMT.

 

"The ruling is a step forward and is good news," said a Milan trader. "But it's not decisive and the market is not discounting it as a done deal yet."

 

(Reporting by Jennifer Clark and Stephen Jewkes; editing by James Jukwey and David Evans)

 

[fareastwarriors]

http://www.businessweek.com/articles/2013-07-31/american-automobile-glut-unsold-cars-are-piling-up#r=rss

 

American Automobile Glut? Unsold Cars Are Piling Up

[Guest hellsten]

Greenwood Investors on Fiat:

 

Fiat SpA (F IM) represents a rare investment opportunity- one of the few outliers that an investor gets in his career. 

…

In a nutshell, it essentially has about 5x the upside that highly-favored GM has, with less downside risk. 

 

How could this be, since Fiat has industrial net debt as opposed to GM’s industrial net cash position? 

…

The Agnelli Family and venerable CEO Sergio Marchionne (history of turning around SGS SA, Fiat Industrial, Fiat in 2004, and of course Chrysler)

have purposefully kept Fiat’s debt structure totally unsecured, with the ability to sell or distribute assets freely.

…

As long as such a scenario doesn’t prevent Maserati and Alfa Romeo resurgences ex-Europe, we still think Fiat is sustainable as a stand-alone entity, as these brands will add more than €1.5 billion to Fiat’s stand-alone operating profit after rolling out key products from today through 2015.

…

Mark-to-market risk is the main problem here, and is more heightened than an investment in Ford’s or GM’s stocks.

…

A combined Fiat-Chrysler, even in the current European economic climate, is worth €12.72-€29.04 per share, using comparable Ford & GM multiples on EBIT and EBITDA.  That’s assuming the maximum Chrysler take-out price as stipulated in the equity recapture agreement.

…

Alfa Romeo’s relaunch and further product additions and efficiencies make 2014 even more of an exciting year for Fiat’s bottom line.  So the “quick double” that Fiat’s shareholders have after a Chrysler merger can easily turn into a 3 or 4-bagger as these increases in operating income and EBITDA have an outsized effect on the debt & pension-adjusted equity value. 

…

market participants will continue to hold Fiat in a penalty box and give the stock a discount until European economies recover (Fiat’s European sales in July will likely show year on year growth), but a comparable fair value of €24.21 gives the current investor a large margin for error since the stock last traded at €6.11.

http://www.gwinvestors.com/Main/Blog/Entries/2013/8/1_Exor_SpA_%28EXO_IM%29__The_Italians_Are_Coming.html

 

[muscleman]

Greenwood Investors on Fiat:

 

have purposefully kept Fiat’s debt structure totally unsecured, with the ability to sell or distribute assets freely.

http://www.gwinvestors.com/Main/Blog/Entries/2013/8/1_Exor_SpA_%28EXO_IM%29__The_Italians_Are_Coming.html

 

I don't get this part. If they sell assets and then go into bankruptcy in a nightmare scenario, won't they be sued for fraudulent conveyance?

[Packer16]

If the debtholders have a security in the assets & Fiat runs into issues they need to get their approval to sell.  For example, if the want to sell Ferrari they can do it without bond holder approval.

 

Packer

[brker_guy]

Too Sexy for FIAT?

 

http://trc.taboola.com/bloomberg/log/3/click?pi=http%3A%2F%2Fwww.bloomberg.com%2F&ri=32a8d8c24ce945840d31c4141ddc3881&sd=v1_73cd3ee7bfc063de4710b52a660c5a2a_76edd97c-43dc-4d2d-b7aa-c9f23eb097ca_1375916446_1375917777&ui=76edd97c-43dc-4d2d-b7aa-c9f23eb097ca&it=video&ii=-1548868282234316660&pt=home&li=rbox-h2v&url=http%3A%2F%2Fwww.bloomberg.com%2Fvideo%2Ftoo-sexy-nude-models-the-new-push-to-sell-cars-t4y7dRxpRqK7psmJ_GDUAQ.html&r=13

 

 

[muscleman]

If the debtholders have a security in the assets & Fiat runs into issues they need to get their approval to sell.  For example, if the want to sell Ferrari they can do it without bond holder approval.

 

Packer

 

That is true. But I guess for unsecured note holders, if Fiat transfers all of the assets out and files bankruptcy within 6 months, it can be sued for fraudulent conveyance and the judge can order the assets to come back.

 

http://en.wikipedia.org/wiki/Fraudulent_conveyance

 

A transfer will be fraudulent if made with actual intent to hinder, delay or defraud any creditor. Thus, if a transfer is made with the specific intent to avoid satisfying a specific liability, then actual intent is present.

 

 

So theoratically this is not bullet proof, though I understand that FIATY is probably not likely to get into this situation.

[jch548]

Marchionee was quoted in today's WSJ in an article on the European economy. He stated "If the industrial conditions in Italy remain such that it is impossible to properly govern the industrial operations in this country then any commitment we have to this country is up for grabs."

 

Seems he is positioning for some future drastic changes. Talk of moving HQ to Detroit or the Netherlands then the above. Too much excess capacity in Italy...

[Phaceliacapital]

I think that's been taken from the CC

[fareastwarriors]

http://online.wsj.com/article/SB10001424127887323971204578628040738330064.html?mod=WSJ_hps_LEFTTopStories

 

 

Fiat Workers Paid to Stay Home Amid Car Slump

 

 

Maria Epifania has a good job assembling cars at Fiat SpA's F.MI +2.07%Mirafiori factory in northern Italy, except that she has barely worked in the last two years.

 

Nonetheless, she receives part of her pay, some €800 ($1,053) a month, through a state-run program that helps workers on forced leave make ends meet. Ms. Epifania, a 39-year-old single mother, could be called back to Mirafiori someday. But she has her doubts about her chances of returning to work.

 

...

 

After shuttering a factory in Sicily in 2011, Fiat has avoided further closures and layoffs in its home country. Instead, it has left its five car factories there idle for extended periods to cut costs and prepare for an eventual recovery. Workers are paid to stay home.

 

The Mirafiori plant, a massive structure in Fiat's hometown of Turin, used to employ tens of thousands of workers to churn out more than 300,000 cars annually. Last year, it produced fewer than 50,000 cars, not enough to provide work for the 5,500 people assigned to its assembly line.

 

 

[fareastwarriors]

http://video.cnbc.com/gallery/?play=1&video=3000190067

 

interview with  Robert Graczyk, Maserati North America president & CEO

[txlaw]

http://www.bloomberg.com/video/this-apple-red-ferrari-now-harder-than-ever-to-buy-VH874trzT~iaYlpvzU1Hew.html

[jay21]

Fiat and Chrysler

Hoping it will hold together

 

http://www.economist.com/news/business/21584001-union-fiat-and-chrysler-has-better-chances-both-carmakers-previous-alliancesbut

 

"There is no doubt that Fiat will get its hands on the remainder of Chrysler, with a deal probably struck by the end of the year, reckons Philippe Houchois of UBS, a bank. VEBA needs to sell, either directly to Fiat or through an IPO, to raise money for the growing medical bills of retired car workers. What is unclear is the price: anywhere between Fiat’s valuation of $1.8 billion and the $4.3 billion that VEBA wants."

 

"The merged Fiat-Chrysler will probably chug along, neither attaining the dominant scale of a VW or Toyota nor the profitability of smaller carmakers like BMW and Jaguar Land Rover. And there is no obvious successor to Mr Marchionne, a clever strategist who has saved two carmakers from oblivion but cannot go on for ever. His joining of two of the world’s weakest firms into one that stands a chance of long-term survival has been a triumph for those whose jobs depend on them. But for the rest of the rich world’s carmakers, it has kept alive a lot of capacity that they would rather have seen close. Fiat-Chrysler’s rivals must wish Mr Marchionne had never picked up his welding gear."

[jay21]

If the debtholders have a security in the assets & Fiat runs into issues they need to get their approval to sell.  For example, if the want to sell Ferrari they can do it without bond holder approval.

 

Packer

 

Packer, any thoughts on the debt of Chrysler and Fiat?  I know you spend some time looking at debt and equity relative value so I was curious.

 

I'm taking a quick look at Chrysler's balance sheet and, based on a rough guess, it looks like debt repricing could add over $100m to earnings.  Do you think I am off base based upon what you know about the debt markets for the companies and the auto industry?

[txlaw]

http://www.freep.com/article/20130903/BUSINESS01/309030164/auto-sales-august-ford-gm

[fareastwarriors]

Fiat May Face 2015 Trial Over Value of UAW Chrysler Stock

 

http://www.bloomberg.com/news/2013-09-04/fiat-may-face-2015-trial-over-value-of-uaw-chrysler-stock.html

 

Fiat SpA (F) may have to wait until 2015 for a trial over the value of some Chrysler Group LLC shares owned by a union health-care fund, further delaying a plan to combine the two companies.

 

Lawyers for a United Auto Workers trust fund are asking Delaware Chancery Court Judge Donald Parsons to hold a January 2015 trial on the terms of a stock agreement covering at least 54,000 Chrysler shares, according to court filings. Fiat is seeking a May 2014 trial, according to the filings.

 

 

[fareastwarriors]

Fiat Gives Go Ahead to Build Maserati SUV in Italy

 

http://online.wsj.com/article/SB10001424127887323623304579054912852343796.html?mod=WSJ_business_whatsNews

 

Fiat SpA F.MI -0.77%is going ahead with a planned €1 billion ($1.31 billion) investment to retool its aging Mirafiori factory, the latest investment by the auto maker to revive its underused Italian facilities.