Fiat is mulling transferring its corporate headquarters from Turin, Italy to the United States after it consumes its planned merger with Chrysler Group, three people privy with the matter told Bloomberg. The sources disclosed that Sergio Marchionne, chief executive of both companies, is assessing the transfer from Italy to the US as the Italian carmaker's revenue and profit center shifts to North America.
The region accounted for around 75 percent of Fiat’s operating profit in 2012. The sources said that Fiat has yet to make a final decision on the matter and is examining other options. Marchionne revealed in April that that he is leaning towards a primary listing in New York for the merged company.
Should Fiat decide to move its headquarters from Turin, Italy to the US, a political backlash might occur in crisis-affected Italy, where the entire industrial sector is experiencing a decline. Unemployment rate in the country is nearing a 20-year high as companies avoid getting new workers as Italy suffers from its longest recession in over two decades.
Fiat has been relying on its Chrysler subsidiary to bring in profit as it struggles to stop its financial bleeding in Europe, which amounted to over EUR700 million ($900 million) in 2012. Fiat's reliance on the European vehicle market has been significantly trimmed since it acquired Chrysler in 2009. Europe accounted for only 24 percent of the Fiat's EUR84 billion in revenues in 2012.
Back in 2004, when Marchionne became Fiat’s CEO, Europe accounted for over 90 percent of its EUR27 billion in revenues. Marchionne told analysts in April that Europe is becoming “a less and less relevant fact in the scheme of things." He said that this reflects the carmaker’s ability to shift its interest and resources to markets that are much more rewarding in terms of investment and return. The sources told Bloomberg that Fiat will turn its Turin office into its European headquarters.