Ont. Chrysler plant could produce Fiat 300: CEO
Last Updated: Friday, May 21, 2010
Fiat CEO Sergio Marchionne says the Italian automaker is still weighing whether to build cars at an Ontario Chrysler plant as it considers a North American expansion to counter the squeeze of its traditional markets by the European debt crisis.
Marchionne told reporters in Toronto late Thursday that the company is launching a new platform for the Fiat 300 this year and could build the car in North America.
"We're interested in seeing what we can do with the platform for the [Fiat] 300 here and in the U.S.," he said at a news conference, adding that Fiat "might still" build the car at its partner Chrysler's plant in Brampton, Ont.
Marchionne, who took over the reins at Chrysler as the company struggled through a painful restructuring last year, said he never wants the automaker to lose money again.
"I expect 2010 will be a much better year than we originally forecast," he said.
Marchionne said he expects U.S. vehicle sales to top 11 million this year and 12 million in 2011.
"Those are good volumes to try and build a car business on," he said.
2011 IPO possible
Marchionne said he is considering an initial public offering of the new Chrysler's shares in 2011. He said he thinks there's enough demand in the marketplace to support IPOs at both Chrysler and General Motors, which both restructured under bankruptcy protection last year after they nearly collapsed during the recession.
However, he was
less optimistic about Fiat's prospects in Europe, where a mounting debt crisis in Greece and other countries — including Spain, Portugal and Ireland — is making "growth in Europe a more questionable objective in 2010 and possibly '11."
"The likelihood that the contagion will affect the North American [vehicle market is pretty limited. I'm a lot less serene when it comes to European consumption," Marchionne said.
Marchionne became Chrysler's CEO last year after Fiat reached a partnership agreement with the ailing automaker while it was still under bankruptcy protection in the U.S.
Fiat currently has a controlling 20 per cent stake in Chrysler LLC and plans to raise that stake to 35 per cent.
The agreement aimed to provide Chrysler with the small vehicle technology it lacked yet was considered essential to its survival while Fiat would get access to the North American marketplace through Chrysler's distribution system.
In April, Marchionne said he hopes the combined Chrysler-Fiat will build six million cars annually by 2014 with revenues of $92.4 billion.
The deal raised plenty of speculation about what Fiat's involvement would mean for Chrysler's Canadian operations. Marchionne spent much of his youth in Canada, attending the University of Windsor, the University of Toronto and Osgoode Hall Law School at York University in Toronto.
In January, Marchionne hinted that Fiat would consider building vehicles for the North American market at Chrysler's plant in Brampton, northwest of Toronto.
"If we build it, it's likely it will be there — if we build it at all," Marchionne told reporters at the Detroit auto show.
Brampton plant runs 2 shifts
The Brampton plant currently builds the Chrysler 300, Dodge Charger and Dodge Challenger sedans. It is running on two shifts and has about 800 workers on layoff.
Marchionne also hinted in January that if Fiat does decide to build vehicles in Brampton, it would invest in the plant's aging paint shop, which is one of the oldest Chrysler has.
Chrysler Canada employs approximately 7,500 people at assembly plants in Brampton, Windsor and a small casting plant in Toronto.
In its most recent quarter, Chrysler Group LLC slashed its net loss to $211 million on cost cuts, manufacturing efficiency and disciplined pricing. That was far less than the staggering $4.1 billion that Chrysler lost from the time it left bankruptcy protection June 10 through the end of last year, and the company says it is a sign that its turnaround plans are starting to work.
Fiat reported a narrower first-quarter loss of 25 million euros ($33.5 million), compared with a loss of 410 million euros ($551 million) last year. It forecast its auto business will be hurt this year by the elimination of cash-for-clunker programs in Europe.
The improved results were due to a rise in revenues, with the auto business taking residual benefits from the slowing cash-for-clunkers programs.
Read more:
CBC News - Windsor - Ont. Chrysler plant could produce Fiat 300: CEO
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