Breaking Up Isn't Hard to Do: Fiat Chrysler Announces Parts Division Spin-off

by Steph Willems

Published: April 5th, 2018

breaking up em isn t em hard to do fiat chrysler announces parts division

As Magneti Marelli prepares for its 100th birthday next year, the Italian parts supplier can expect to mark the occasion while newly single.

In a bid to streamline its operations, Fiat Chrysler Automobiles has announced it is moving forward with a plan to spin off the weighty subsidiary. The split should be complete by the end of this year or early next.

Magneti Marelli manufactures numerous automotive components, from lighting to powertrain parts to electronics, and employs roughly 43,000 workers in 19 countries. Dozens of manufacturing plants exist under its umbrella. Started as a joint venture between Fiat and Ercole Marelli in 1919, the company officially became a Fiat subsidiary in 1967.

According to Reuters, analysts estimate the division’s net worth at between 4.4 and 6.1 billion dollars.

Early Thursday, FCA issued a statement saying its board of directors had “authorized FCA management to develop and implement a plan to separate the Magneti Marelli business from FCA and to distribute shares of a new holding company for Magneti Marelli to the shareholders of FCA.” The company’s shares will be listen on the Milan stock exchange.

FCA CEO Sergio Marchionne stated that spinning off the division will “deliver value” to FCA shareholders and put Magneti Marelli in a position for growth. “The spin-off will also allow FCA to further focus on its core portfolio while at the same time improving its capital position,” he said.

The parts business was just one of the pieces of the FCA pie rumored to separate from the flock last year. Alfa Romeo and Maserati were included in this list, but Marchionne squashed murmurs of the brands’ impending spin-off. The same rumors circulated around Jeep after reports emerged Chinese automakers expressing interest in acquiring the brand. Jeep, Marchionne said, is not for sale.

FCA remains on a fairly aggressive debt-cutting spree, with the automaker hoping to finish the year in the black.

[Image: Fiat Chrysler Automobiles]

#Fca #FiatChryslerAutomobiles #MagnetiMarelli #Spinoffs #Suppliers

Steph Willems

More by Steph Willems

Comments

Join the conversation

2 of 4 comments

Ect on Apr 05, 2018

"automaker hoping to finish the year in the black." Huh? FCA has been and is in the black. 2017 net profit, for example, was €5 billion.

Like Reply
Ohioeric on Apr 07, 2018

Didn't work out so well for Delphi from GM or Visteon from Ford. Third time is a charm? I doubt it.

Like Reply

Recent Comments

GregLocock Car companies can only really sell cars that people who are new car buyers will pay a profitable price for. As it turns out fewer and fewer new car buyers want sedans. Large sedans can be nice to drive, certainly, but the number of new car buyers (the only ones that matter in this discussion) are prepared to sacrifice steering and handling for more obvious things like passenger and cargo space, or even some attempt at off roading. We know US new car buyers don't really care about handling because they fell for FWD in large cars.
Slavuta Why is everybody sweating? Like sedans? - go buy one. Better - 2. Let CRV/RAV rust on the dealer lot. I have 3 sedans on the driveway. My neighbor - 2. Neighbors on each of our other side - 8 SUVs.
Theflyersfan With sedans, especially, I wonder how many of those sales are to rental fleets. With the exception of the Civic and Accord, there are still rows of sedans mixed in with the RAV4s at every airport rental lot. I doubt the breakdown in sales is publicly published, so who knows... GM isn't out of the sedan business - Cadillac exists and I can't believe I'm typing this but they are actually decent - and I think they are making a huge mistake, especially if there's an extended oil price hike (cough...Iran...cough) and people want smaller and hybrids. But if one is only tied to the quarterly shareholder reports and not trends and the big picture, bad decisions like this get made.
Wjtinfwb Not proud of what Stellantis is rolling out?
Wjtinfwb Absolutely. But not incredibly high-tech, AWD, mega performance sedans with amazing styling and outrageous price tags. GM needs a new Impala and LeSabre. 6 passenger, comfortable, conservative, dead nuts reliable and inexpensive enough for a family guy making 70k a year or less to be able to afford. Ford should bring back the Fusion, modernized, maybe a bit bigger and give us that Hybrid option again. An updated Taurus, harkening back to the Gen 1 and updated version that easily hold 6, offer a huge trunk, elevated handling and ride and modest power that offers great fuel economy. Like the GM have a version that a working mom can afford. The last decade car makers have focused on building cars that American's want, but eliminated what they need. When a Ford Escape of Chevy Blazer can be optioned up to 50k, you've lost the plot.