Chrysler Stock Offering Could Initially be Small, Marchionne Says
PARIS - Chrysler Group LLC’s initial public offering may be “relatively small” and in “chunks” so the U.S. automaker run by Fiat S.p.A. can establish a base market for its stock, the company’s top executive said, Bloomberg reported.
The automaker’s financial performance next year will support an IPO in the second half, Chrysler CEO Sergio Marchionne told reporters today at the Paris auto show. He is also CEO of Fiat.
Marchionne is almost one year into a five-year plan to rebuild Chrysler after its bankruptcy last year. Fiat controls Chrysler with a 20 percent stake that can be increased by meeting certain milestones. The majority of the stock is held by a trust established to cover medical costs for union retirees.
“One of the options is to do an initial public offering that would involve a relatively small issue” then come back six to nine months later to do a wider distribution so the United Auto Workers’ trust can sell its shares, Marchionne said.
The UAW retiree trust holds 67.69 percent and the U.S. and Canadian governments hold a combined 12.31 percent.
“The primary objective of the IPO is to provide financial, long-term stability to Chrysler,” Marchionne said, so it may be more effective to sell stock in “chunks.”
General Motors Co. is seeking to raise $8 billion to $10 billion in an initial public offering in November, two people familiar with the situation said this month.
That’s a smaller target than the Detroit-based automaker earlier anticipated, because the U.S. Treasury, which owns 61 percent of GM, prefers a higher share price to a large offering, the people said.
Marchionne said Chrysler would seek to raise “by far” less than $8 billion.
He reiterated that Chrysler is ahead of plan with its financial performance for the year.
Chrysler’s U.S. vehicle sales rose 10 percent for the year through August compared to last year, according to the Automotive News data center. Total U.S. vehicle sales increased 8 percent during the period.
Chrysler may have led U.S. automakers with a 48 percent sales increase during September, according to the average of six analysts’ estimates surveyed by Bloomberg.
“We are in the process of finalizing the third quarter,” Marchionne said in an interview. “We are probably a big chunk of the year ahead compared to the plan we presented.”
Chrysler reported a first-half net loss of $369 million while posting operating profit of $326 million. The results exceeded the automaker’s guidance that operating results would be break-even to $200 million. Marchionne has signaled that profit and cash guidance will be upgraded after the third quarter. In August, he said the automaker would have a difficult time turning a net profit for the year.
More Industry

Kia Closes Out Summer With a Bang
Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.
Read More →
Indiana Dealership Changes Hands
A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.
Read More →
Texas Dealership No Longer in the Family
The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.
Read More →
Genesis Grows California Presence
The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.
Read More →
August Auto Sales a Mixed Bag
An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.
Read More →
EV Market Humming Along
July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.
Read More →
Auto Loan Delinquency Rates Stabilize
Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.
Read More →
EV Sales Recover in Q2
The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.
Read More →
The Cheapest Hybrids to Fuel
The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.
Read More →
Hybrids and SUVs Gaining Ground
The most recent Kelley Blue Book Brand Watch found that only two nonluxury brands increased in shopper consideration, buoyed by their hybrid and SUV offerings.
Read More →