Jun 04, 2011
Will U.S.-revived Chrysler's headquarters move to Italy?
By Fred Meier, USA TODAY
Now that Fiat is buying out the U.S. stake in Chrysler Group -- giving it a 52% majority -- and is moving to merge the companies, it raises a question: Where will the combined company call home?
It's a tricky political and symbolic question. Chrysler was saved from the abyss by the U.S. in 2009. Fiat's deal this week to buy the government's remaining 6% stake for $500 million still will leave a final bailout cost to taxpayers of almost $1.5 billion. They may not be pleased to see it moved offshore.
Not to mention that Chrysler's former ownership by Daimler -- with decision made in Germany -- did not turn out well. You could even argue that the DaimlerChrysler period set it on the road to the bailout.
But Chrysler now will be owned by Fiat -- Italy's largest employer and a source of national pride -- which has its historic home in Turin). Chrysler's current headquarters is it's glossy campus in Auburn Hills, Mich., built in the 1990s.
"It's a difficult call," Sergio Marchionne, CEO of both companies told the Associated Press on Friday. "Access to financing is probably the most important criteria."
He wouldn't say when a headquarters decision would be made."It's really going to be driven by where we get the means to realize capital,, "he said. "We've had a very good experience here in the U.S. ... (while) Europe has gone a long way in creating an efficient capital market."
But earlier this year, after hinting the combined company could be based in Michigan, Marchionne then assured Italian officials that Fiat would not leave Italy. Some have speculated that he is maneuvering for concessions from the Italian government and Italian unions.
Marchionne told the AP he expects to announce by yearend how he'll merge Fiat and Chrysler. Marchionne also said a public offering for Chrysler likely won't come until 2012, after the company has more time to show consistent profits. It reported a $116 million profit in the first quarter, the first quarterly profit since 2006.