Shares of Chrysler parent company Fiat SpA fell by 5.9 percent on Tuesday. Two European banks downgraded the company's stock, with UBS AG dropping the company's stock from a "buy" rating to "neutral." Likewise, Deutsche Bank cut the company's shares from "hold" to "sell" amid concerns that the company will need a new cash infusion to fund CEO Sergio Marchionne's plans for the automaker. Marchionne has made it clear he plans to purchase the remainder of Chrysler, which will require Fiat to raise somewhere between 1.6 billion and 2.9 billion euros. That's due in part to the fact that the company may have to start paying fair-market value for Chrysler stock as the company's initial public offer grows near.

Bloomberg reports Marchionne is keen to increase the Fiat stake in Chrysler in order to access the profitable North American manufacturer's cash flow. Fiat could then use those funds to jump start its ailing European operations, though Marchionne has been quoted as saying Fiat doesn't need Chrysler's cash to bring its EU business in line. Last quarter, Fiat reported 20 billion euros of available liquidity, down from 22.7 billion euros at the end of June.


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  • 27 Comments
      Autoblogist
      • 2 Years Ago
      Marchionne is smart, if Fiat's European operations need some help from Chrysler, I doubt Sergio would mismanage the situation like Diamler did. We all knew Chrysler would become the Fiat Group's ultimate cash cow. Sergio was smart enough to realize Chrysler had the infrastructure in place and only needed some well placed guidance when no one else was stepping up to the task. . He's a big part of the reason we can praise Chyrsler products right now. I wouldn't have a problem with the idea.
        gtv4rudy
        • 2 Years Ago
        @Autoblogist
        And Sergio drives a Charger SRT8 daily in Detroit and in Milan.
      Scooter
      • 2 Years Ago
      If they can take Chrysler from copy cat crap status to real competitor, then by all means BUY out Chrysler!
      danalysis44
      • 2 Years Ago
      ... And share prices have come back up again to where they were before the announcement Still quite low but Fiat does bounce around. A nice buying opportunity for FIATY
      • 2 Years Ago
      [blocked]
        sstowes
        • 2 Years Ago
        What does Obama have to do with Fiat's poor reception in Europe? Anyone that thought Sergio Marchionne's tie-up with Chrysler was going to lead to the land of milk and honey should've been a lot more cautious. With maybe Maserati/Ferrari being the outliers, Fiat's as a whole since the incorporation of Alfa Romeo in the mid-90s, haven't done well pretty much since. Just ask Alfa Romeo and Lancia, the latter of which was ejected of all sporting notion, humiliated by the logo change and then completely died, only to continue on as literally rebadged Chrysler's. Some of you people make plain the need for more education here in America. Morons...
          • 2 Years Ago
          @sstowes
          [blocked]
      AngeloD
      • 2 Years Ago
      Once again, Chrysler winds up as the donkey pulling a failing European manufacturer along. Daimler would be out of business if not for their raid on Chrysler's money back in 1998, and now Chrysler's profits are supporting FIAT and its massively overpaid communist trade unions. Very sad.
      Radioactive Flea
      • 2 Years Ago
      Chrysler was always the stronger company. The previous knucklehead owners were the problem. Draining it of cash and strangling product development. It should have remained independent from the start. However, Fiat did save Chrysler. It would be gone now if it wasn’t for Fiat. Now it's Chrysler's turn to help Fiat.
      jnbcressy
      • 2 Years Ago
      Numero Uno in Brazil, FIAT, 10000 units ahead of #2 Volkswagen. FIAT happens to be in the top three in a number of countries. It has been a major player in High End and Low End vehicles. Chrysler makes up the middle. All Auto companies in Europe are in a tail spin. Some with sales down over 100% from last year and others no longer in buisness.
        ChrisTT
        • 2 Years Ago
        @jnbcressy
        Down over 100%? So they bought cars instead of selling them?
          jnbcressy
          • 2 Years Ago
          @ChrisTT
          Vauxhall/Opel was down over 128% That means their sales were less than 2011 and smaller than 2010. Yes negative numbers. Is that so hard to understand?
      Snailguy
      • 2 Years Ago
      Tough day to be Sergio Marchionne -- In his own words, Chrysler could not afford to mess up the Dart. And now (biased or not), an influential magazine has given the thumbs down on the Dart. I'm sure there is nervousness in both the Turin and Dearborn boardrooms.
        MAX
        • 2 Years Ago
        @Snailguy
        Heavily biased anti-American Consumer Distorts giving the Dart a bad review had to expected and Darts are and will sell well. Anti-American trolls will bark like running dogs but the the Grand Caravan moves on.
      Bill Burke
      • 2 Years Ago
      Although it may be premature to panic, I don't like the line of thinking that Chrysler Groups success will be syphoned off by Fiat for European operations. This sounds too much like what Daimler did to Chrysler to save it's faultering Mercedes operations, which effectively destroyed Chrysler's ability to update and improve it's lineup. I'd like to think Machionne is too smart to hurt the cash flush Chrysler Group and in turn prevent Fiat SpA from successfully negotiating the European economic crisis on it's own, which is the wise path to long term viability.
        sstowes
        • 2 Years Ago
        @Bill Burke
        If Marchionne could touch Chrysler's profits to infuse his European brands, he absolutely would. He needs to let Volkswagen purchase Alfa Romeo and/or kill off Lancia completely (goodbye Stratos :-( ) and free up a much needed portion of the budget.
          Brodz
          • 2 Years Ago
          @sstowes
          They aren't his brands... he just manages them. I'm sure he'd be working hard to make good outcomes for all concerned. He probably wants to incorporate Chrysler now that it's doing well, so that will increase the stock price of FIAT, and make more people buy it's stock.
          quuppa70
          • 2 Years Ago
          @sstowes
          are you insane? why to sell best brands, he should let end fiat brand
      dukeisduke
      • 2 Years Ago
      B-b-b-b-but Sergio is such a genius, at least according to the buttsniffers in the media.
      • 2 Years Ago
      [blocked]
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