Sergio Marchionne, who serves as the CEO of both Fiat SpA and Chrysler Group LLC, is taking a further step towards the two automakers’ merging. After speaking at the Swiss-American Chamber of Commerce, he told reporters that he will soon be announcing details of a unified management structure. He didn’t specify if this announcement will coincide with Fiat's quarterly earnings report scheduled on July 26.
He intends to merge Fiat and Chrysler so that costs would be reduced and so that it could attain its goal of hitting over 100 billion euros ($140 billion) in combined revenue by 2014.
Last May, Marchionne said that the merger isn’t expected this year and that actually, no decision has been made on the timing yet. This week, Societe Generale analyst Stephen Reitman wrote a note to clients, saying that Marchionne is the best at “selling an auto story."
He explained that already, the present stock price “discounts most of the good news to come from Chrysler and ignores much of the risk."
Since the end of May, Fiat had consolidated Chrysler's financial results – an indication of the swift integration of the two car companies since Chrysler emerged from bankruptcy in June 2009.
Fiat, which was initially given a 20% stake in Chrysler by the U.S. government, seeks to hold 57% of Chrysler by the end of this year.
Fiat said that when that time comes, the United Auto Workers union's trust will have 41.5% of Chrysler. In addition, Marchionne restated that there are no talks about a plan to purchase a stake in Chrysler held by VEBA, the UAW's retiree health-care trust.