Trading has begun in
the shares of Fiat Chrysler Automobiles which are listed on the New York Stock
Exchange under the stock ticker symbol “FCAU”.
The shares opened on 14 October at a price of $9. The
price rose briefly before ending the day at $8.92. Considering the Dow Jones
industrial average dropped 222 points late in the day, this was no mean achievement. The stock also trades on
an exchange in Milan, Italy.
The share listing can be viewed as the
latest twist in what has been a long road for chief executive Sergio
Marchionne, who was asked in 2004 by John Elkann, Agnelli family heir and later
chairman of Fiat (he is now chairman of FCA) to turnaround the automaker’s
fortunes.
It was in 2007 that the troubled Chrysler Group was sold to New York private equity company Cerberus Capital Management from which it was purchased by Fiat. Marchionne oversaw the merger of Fiat
with Chrysler and the eventual full takeover of the recently bankrupt automaker
to form the new FCA.
Fiat Chrysler Automobiles (FCA) includes
brands as diverse as Dodge and Ferrari, to diesel engines from VM Motori. This latest move by the chief is to turn FCA into one
of the world’s leading automakers, by opening it up to global capital markets
in order to fund an array of new models under a five-year strategy announced in
May.
But Marcionne revealed recenbtly that he will
stay on as CEO at FCA only until the end of his five-year strategy in 2018. So time is already running out for the great man.
On the face of it, Marcionne appears to have succeeded
when Daimler AG has failed. Fiat Chrysler seems to have been given a new sense of
identity – as well as new life and purpose. What magic touch does the Italian possess
where the Daimler’s top hierarchy failed?
On the other hand, Tata Motors appears to have
succeeded where Ford Motor Company failed in its handling of Jaguar, Volvo and
Aston Martin. So Marchionne knows it can be done; hopefully, without 'smoke and mirrors'.
Nevertheless, it was without doubt an historic day
for FCA to have its shares listed in New York and Milan this week, despite turmoil in the financial markets around the world - not the best time to launch a new company.
However, as anyone who
has run a company with shareholders will know, the path is not an easy one,
especially as there are often hidden and unexpected dangers ahead. But it may
be these that makes life exciting for Marcionne.
Marchionne has told media recently that he
felt automakers were under-priced and that he expects future values to reflect
this. Notwithstanding this, there is some scepticism as to whether the
62-year-old will be able to reach some of his stated goals for FCA.
His five-year strategy calls for US$60 billion
to be invested in new products that, if all goes to plan, will see FCA’s sales
grow 60 per cent to around seven million vehicles annually. That is a huge task in anyone's language.
Rival automakers like Daimler AG, Ford Motor
Company, General Motors, Toyota and Volkswagen Group - to name but five - have ambitious plans
of their own that take in China and other expanding regions. FCA is the world’s
seventh largest automaker by volume. Time will tell how far it moves up the league table.
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