Fiat Postpones Plans to Acquire Chrysler image

Marchionne decided to retool Fiat’s troubled European operations to avoid closing plants, and therefore postpone his plans to acquire the rest of Chrysler.

“Building things is a lot more exciting than retrenching into defeat,” Marchionne told analysts and reporters during a conference call Tuesday. “I think we need to come out fighting.”

Marchionne’s plan is to get the Italian plants work at full capacity by increasing exports and focusing on higher-volume vehicles. Fiat’s CEO said that the underperforming Lancia brand will only have one vehicle produced, while the rest of the showroom will be filled with rebadged Chryslers. Fiat also plans to expand the Jeep brand in Europe, firstly by building an all-new small Jeep for both export and domestic market. Then, the Italian automaker will manufacture a small SUV.

Fiat currently owns 58.5% of Chrysler and was planning to acquire the remaining 41.5% from the United Auto Workers-run hourly retiree health care trust. Unfortunately this plan has to be postpones as Marchionne won’t have enough money once the restructuring plan will be funded. In January the health care trust will be allowed to make Chrysler public again.

“We will comply if they so desire,” Marchionne said, stressing that Fiat already owns enough of Chrysler to maintain control. “It doesn’t concern me.”