Chief Executive Sergio Marchionne’s merger of carmakers Fiat and Chrysler will probably entail a U.S. share listing that cements North America as the group’s new centre of gravity and further sidelines Italy.
Heralding a politically delicate shift of focus that reflects the operating facts, two sources close to Fiat said it was likely to move its primary listing to New York as early as 2015 after a merger with Chrysler, the third-largest U.S. automaker.
Meanwhile, newspaper reports see Fiat SpA’s shares doubling in the next two years as it integrates its Detroit-based Chrysler unit and benefits from synergies in design, engineering, and supply chains.
Chrysler already made more than half the group’s first-half revenue, turning what would have been a 501 million euro ($690 million) loss for Fiat alone into a 435 million euro profit, while Fiat plants in Italy tick along at just 41 % capacity, according to 2013 estimates from IHS Automotive.
A listing move would help Marchionne distance himself from troubles in Europe, where thousands of Fiat’s Italian workers are on state-backed temporary lay-off schemes, highlight its gains in the United States and convince a larger pool of investors that the merged company can take the fight to rivals General Motors and Ford.
While the northern Italian city of Turin has been Fiat’s seat for the past 115 years, “the brain and muscles are in the United States; the centre of gravity has moved to the other side of the ocean”, Luciano Gallino, a sociologist who specializes in labor market changes, was quoted by ANSA news agency as saying.
The listing and the likely establishment of a group headquarters outside Italy will alarm some in that country’s government and unions who want to protect jobs, but it will delight investors who want cost cuts and closures, observers said.