Fiat’s spinoff strategy sees chairman resign
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.