L'intervista integrale di Automotive News Europe a Sergio Marchionne

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L'intervista integrale di Automotive News Europe a Sergio Marchionne

  • –di Luca Ciferri

Fiat-Chrysler CEO Sergio Marchionne says now is the "most sensitive period" of his almost eight-year tenure at Fiat S.p.A.
The integration of Fiat and Chrysler is at point where mistakes could have huge long-term consequences, he says.
The 59-year-old executive was interviewed in his Turin, Italy, office by Staff Reporter Luca Ciferri. The interview was conducted in English.

Q: Three years ago, you predicted the financial crisis would leave the world with six surviving global automakers, and each would be building at least 6 million units a year. Since then, Fiat-Chrysler is the only major consolidation. What happened?
A: Give it time. I have not changed the sense of my prediction. Hopefully it will happen on my watch. But more important than the absolute number of cars is the volume produced per architecture. Given the level of investment it takes to develop a mass platform, a minimum volume of at least a million vehicles is needed to achieve an adequate return. By 2014, we expect Fiat-Chrysler to reach 5.9 million units and we will have just three main architectures that drive more than 80 percent of that total volume.

You said you would run Fiat-Chrysler until 2015 or 2016. Was that a joke?
I have two obligations here. The first one is to make this run and run well. The other one is to worry about the guy who runs it after me. The GEC [Fiat-Chrysler's Group Executive Council] was designed as the breeding ground for my successor. It's highly unlikely that my successor will come out of anywhere but that place.
More importantly, [Fiat-Chrysler] is an incomplete piece of work, and I acknowledge it. It is truly not ready to be handed over to somebody else.

In percentage terms, where is the Fiat-Chrysler integration now?

If the integration pace was just 5 percent a year, you would need until 2027 to finish.
We are moving at the speed of light. This number could be 50 percent in 12 months. The speed of this thing is a lot faster because of all the time that I spent in the U.S. since 2009. It has effectively set the stage for the integration. You just need to be absolutely focused on execution of the integration.

Your plans called for a combined 4.5 million Fiat-Chrysler sales this year. Will you make it?
We will make around 2 million for Chrysler. The number for Fiat will be about 2.1 million, or just shy. I think we could possibly hit 4.2 million combined this year.

What volume do you have in mind for next year?
For Chrysler, we have announced 2.4 million and that number is unchanged. It's difficult to give a clear number for Fiat given the unpredictability of the European market, but we may be between 100,000 and 150,000 cars short of the original target [of 2.7 million units].

Why will Alfa and Jeep become Fiat-Chrysler's global brands?
We have two brands, Alfa Romeo and Jeep, that have both the DNA and the history capable of international recognition, and we need to play them. We need to continue to globalize Jeep and Alfa, so the development of architectures and engines that are designed to support these two brands is crucial, and everything else becomes almost secondary.

How will you position the Alfa brand in the future?
We are going to target the U.S. market first and work our way back into Europe. It is fair to say that we are going to be selling at a price at some X-minus against the German competitors. Whatever that minus is, it's going to be an X-minus as an introductory step, not because the cars are not competitive, but because we recognize our starting position in the food chain. Hopefully that positioning will change quickly as we roll out products.

Will Lancia's Europe lineup feature rebadged versions of all future North America-built Chrysler models?
I certainly will look at Europe as a potential market for anything we make in the U.S., but we need to be clear: We can't just keep on dumping products into Europe on the assumption that American conditions will govern.

What about in China?
We are going into production next summer with a hugely revised Fiat version of a new Dodge compact sedan. We are importing the 500 from Mexico and next year will add the Freemont, [a rebadged Dodge Journey].

And Russia?
The original plan was to go into Russia with the Fiat brand. I am not sure this is true anymore. More than likely, Jeep will lead the introduction into Russia.

Only Jeep, or also Alfa?
Jeep first, Alfa second. It's highly unlikely that Fiat [brand] will be brought in except for the 500 as an import.

Since September, the 22-member Group Executive Council runs Fiat-Chrysler as a single organization. When could the two entities be merged into a single legal entity?
Technically it could be done tomorrow, but that is not the issue.

What is the issue?
The only reason why Fiat and Chrysler do not merge is because there are other people at the table at Chrysler.

You mean the 41.5 percent stake owned by the Voluntary Employees' Beneficiary Association that workers received during the bankruptcy process that created the new Chrysler?

Is an eventual Chrysler IPO still needed for generating cash for the company or just to monetize the VEBA stake?
It is only to monetize VEBA.

You said that an alternative step, Fiat buying the VEBA stake, is not on the table.
It is not. You have seen the financial markets. If we did anything like this out of Fiat, notwithstanding the fact that we have adequate liquidity there, we would be punished by the rating agencies for having extended ourselves.

So could Fiat stand with just 58.5 percent of Chrysler for the years to come?
I can. VEBA cannot. They need to monetize the trust. So we need to help them, but that is going to take some time. I am under no pressure to do this. They cannot ask us to until 2013. Plus it would be suicidal given the recent share price slide of everybody in this business.

Where would you incorporate the merged company? Delaware, Turin, Amsterdam? Or could it be wherever you want?
It could be anywhere.

Is it just a technicality?
The question is the listing as opposed to the corporation. I think you need a primary listing to find a home as a financial market. Then you could have secondary listings.

One possibility could be the New York Stock Exchange and the home in the U.S. Another could be the Milan stock exchange, where Fiat is listed now, with the global headquarters in Turin. There could be a third option?
Yes. Not here and not in the U.S.

What is really crucial right now?
This is the most sensitive period of the nearly eight years that I have been at Fiat. I have never lived through a period with this level of complexity and this level of optionality. We need to execute on those options rigorously. So I would feel very uncomfortable leaving

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