Fiat’s spinoff strat­egy sees chair­man re­sign

Calgary Herald - - INSIDE BUSINESS -

Luca Cordero di Mon­teze­molo is re­sign­ing as chair­man of Fiat, and vice-chair­man John Elkann is ex­pected to suc­ceed him.

The an­nounce­ment comes less than a day be­fore Fiat out­lines its five-year busi­ness plan, which is ex­pected to in­clude a spinoff of its au­to­mo­tive op­er­a­tions from the core in­dus­trial cor­po­ra­tion, which in­cludes heavy equip­ment man­u­fac­tur­ers

CNH and Iveco. Such a spinoff would give CEO Ser­gio Mar­chionne more flex­i­bil­ity to pur­sue al­liances such as the 20 per cent stake in Chrysler that Fiat ac­quired through Chrysler’s gov­ern­ment-backed bank­ruptcy re­struc­tur­ing nearly a year ago. It would also en­able Fiat’s au­to­mo­tive op­er­a­tions the abil­ity to raise cap­i­tal to in­vest in cur­rent and new plant and equip­ment.

It would not sub­sti­tute for an ini­tial pub­lic of­fer­ing of Chrysler stock, a sep­a­rate process nec­es­sary for U.S. and Cana­dian gov­ern­ments, as well as the UAW’s re­tiree health care trust, to sell the shares they now own in Chrysler.

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