Jeep is surely the biggest single feather left in the cap of the Fiat Chrysler Automobiles portfolio. Under Sergio Marchionne’s leadership, Jeep went from fewer than 500,000 annual sales in 2008 to 1.4 million in 2016, and is on track for 2 million by 2018. Add in the brand’s legacy, status as one of the most recognizable nameplates in the world, and rabid fan base, and Jeep has extraordinary monetary value to its parent company.
Investors and analysts have certainly noticed Jeep’s inherent value. According to The Detroit Free Press, Morgan Stanley’s Adam Jonas asked FCA chief Sergio Marchionne if he would ever consider spinning Jeep and Ram, FCA’s dedicated truck brand, into a separate corporate entity, and he responded with a simple “Yes.”
Jonas estimated Jeep’s worth in January of this year at $22 billion. Ram was valued at $11.2 billion.
Marchionne has a history of spinning off brands while keeping them part of FCA’s corporate umbrella. The most noteworthy example of this value maximization was with Ferrari, which now trades on the New York Stock Exchange and rakes in $3.4 billion in annual revenue and close to $435 million in net income, reports the Free Press. Marchionne still serves as chairman and CEO of Ferrari, and Fiat heir John Elkann owns 22 percent of the Italian marque’s shares.
Even if the offloading of Jeep and Ram into a separate entity would amount to little more than a profit-driven ownership change on paper, it would be huge news to the brands’ loyal fanbases. In any case, such a move would likely take years to actually happen and probably wouldn’t mean much at all to the products that Jeep and Ram produce. In other words, Jeep fans can keep the pitchforks in the shed … for now.
I like the new Chrysler 200. In fact, we have one in the office this week, and every time I see it outside, I think to myself, “That’s a really good looking car.” But truly good automotive design allows form to perfectly blend with function, and that’s where the 200 falls short – so short, in fact, that Chrysler’s midsize sedan has yet to earn a full recommendation from the folks at Consumer Reports.
The problem? That slick roof design. During an interview at the Detroit Auto Show this month, Fiat-Chrysler CEO Sergio Marchionne said the 200’s rear roofline compromised ingress and egress from the rear seats, and that’s why CR can’t fully recommend it. “The 200 failed because somebody thought that the rear-seat entry point inside the 200 – which is our fault, by the way – is not up to snuff,” Marchionne said to Automotive News.
Marchionne went on to say that FCA’s designers copied the roofline of the Hyundai Sonata, which “has the same problem.” He continued, “We didn’t copy the car, we copied the entry point to the rear seat. Dummies. I acknowledge it.”
Harsh words, but Marchionne isn’t alone in his sentiments. FCA design boss Ralph Gilles tweeted today, “He is right, we might have gone too aggressively after aero. Which we achieved as it is best in class. No free lunch.”
So yes, the 200 looks good. But following this incident, perhaps a redesign will ditch that sloping roof for something that’s a bit more functional.
The SRT Design Team recently worked up something special in honor of Chrysler CEO Sergio Marchionne. The crew whipped the sheets off of a one-off SRT Viper GTS at a Sons of Italy Foundation gala. The car features special Avorio Perla white paint, one-off black vapor chrome wheels and custom interior touches. The colors of the Italian flag run down the length of the seats, and tri-color GTS badges adorn the exterior.
Marchionne donated his tribute Viper to the Sons of Italy Foundation to be auctioned off to support the charity. The foundation serves as the charitable arm of the Order of the Sons of Italy in America, which represents men and women of Italian descent. Marchionne is a Canadian citizen who was raised in Italy, but recently drew the ire of Italian American groups after a colorful comment regarding the upcoming Alfa Romeo 4C. You can refresh your memory about that dustup here. You can also check out the special Viper in the video here.
The Chrysler Group LLC Board of Directors has approved the establishment of a charitable foundation in recognition of the leadership and outstanding dedication of Sergio Marchionne as CEO for Chrysler Group LLC.
“Sergio is an exceptional leader with the unique ability to inspire his people and lead change. Creating this foundation is a fitting tribute to all that has been accomplished at Chrysler,” said Ronald L. Thompson, Lead Director of Chrysler Group LLC Board of Directors. “This foundation will ensure that the values and impact of his leadership will be felt by many others, while the structure ensures that funding for the foundation reflects Chrysler Group’s future success.”
“I am extremely privileged and thankful to have this foundation established given the extraordinary commitment made by all stakeholders in the rebirth of Chrysler after the events of 2009,” Marchionne said. “The action being proposed by the Board of Directors provides an opportunity to support important causes consistent with the values of Chrysler, with an initial focus on the educational needs and ambitions of our employees’ children.”
This recognition is further testament to Sergio Marchionne’s ability to lead by example and inspire others to make a positive difference. It is well known that Sergio Marchionne continually refuses compensation for his duties as Chrysler Group CEO.
The annual contribution over the next five years is expected to amount to a value of five million Chrysler units, with the initial contribution anticipated in December of 2013. The foundation’s awards for educational support will begin in 2014 with more specific information and guidelines available in 2013.
Portland Dodge, Chrysler, Jeep and Ram owners, we would like to sincerely thank you for helping Chrysler come back and in a big way! For more information on all Chrysler vehicles in Portland, call Dick’s Country in Hillsboro at (800) 783-4891.
Chrysler Group LLC recently reported preliminary third-quarter financial results, including net income of $381 million, an increase of 80 percent from the same quarter a year ago, reflecting continued sales increases for the product lineup in total, including sales of the all-new Dodge Dart. For the first nine months of the year, net income totaled $1.3 billion.
“We’ve changed the conversation at Chrysler Group,” said Sergio Marchionne, Chrysler Group LLC Chairman and Chief Executive Officer. “We have revamped our product lineup with such segment-defining models as the Jeep Grand Cherokee and the Chrysler 300. Critics and consumers already are responding positively to the Dodge Dart and to the 2013 Ram 1500, with its best-in-class fuel economy. We continue to work feverishly and are pleased to see that our all-consuming aspiration for excellence is translating into results. We are confirming guidance for the year, and expect Free Cash Flow to be well in excess of $1 billion.”
Net revenue for the quarter was $15.5 billion, up 18 percent from $13.1 billion in the third quarter of 2011, primarily driven by a 19 percent period-over-period increase in shipments. For the first nine months of the year, the Company recorded net revenue of $48.6 billion, a 22 percent increase from the same period a year ago.
Chrysler reports that its vehicle sales jumped by 12 percent in the third quarter over the same period in 2011. That step up was enough to bump profits by 80 percent to $381 million on $15.5 billion of net revenue. Moving forward, the automaker expects to see fourth-quarter profit of $210 million, which should help the company realize its forecast of $1.5 billion of net profit for the year. Reuters reports Chrysler CEO Sergio Marchionne expects the automaker’s free cash flow for 2012 to be “well in excess” of $1 billion.
Over the same period, the smallest of the Big Three laid claim to an 11.3-percent slice of the domestic market, thanks largely to a 16-percent jump in US retail sales. More importantly, the manufacturer’s net industrial debt now sits at $693 million, down from $2.2 billion one year ago.
Chrysler has filed its annual financial report with the Security and Exchange Commission, and a few important tidbits have thus been revealed. For instance, company CEO Sergio Marchionne was paid exactly zero dollars last year in compensation for the role he played in rescuing Chrysler from the clutches of bankruptcy.
It’s important to note that Chrysler is no longer under restrictions from the U.S. government when it comes to executive pay since the Treasury has sold its entire stake in Chrysler. Still, Chrysler voluntarily decided to limit the compensation of some top executives. Marchionne did receive $4.5 million from Fiat, the Italian automaker he guided in its acquisition of Chrysler in 2009.
Up for an interesting exercise? Contrast Marchionne’s total compensation with that of rival CEO Alan Mulally from Ford. Mulally received $58.3 million in company stock in 2011, in addition to whatever he is paid in salary as CEO. Of course, Ford did not accept any bailout assistance from the government and was therefore never under any compensation restrictions, but that’s still a heck of a lot of money.