Tomaso Ebhardt, in his news article in Bloomberg, reported late last night that Fiat Chrysler announced that it was in a discussion with Hyundai Motor Co. with regard to forming a technical partnership. Fiat Chrysler Chief Executive, Sergio Marchionne made the announcement on Saturday in Arese, Milan at the Alfa Romeo Museum. According to him, this alliance could end up being a “strong one”, however, there was no chance of any kind of merger between the two companies.
The question of mergers tends to come up when speaking of Fiat Chrysler, reports Reuters, especially after the company’s failed attempt at tying up with General Motors back in 2015. Speculation was rife in August of a possible tie up with Hyundai and China, which led to Fiat Chrysler’s share prices shooting up.
The CEO of Fait Chrysler spoke about the Hyundai talks after his presentation about the planned return of Alfa Romeo to the Formula 1 racing circuit. Marchionne stated that there was the potential of a technical relationship between Fiat Chrysler and Hyundai. Hyundai already was a component supplier to them in the US, so this was a logical step for the two companies. He said that they might be exploring options in developing transmissions and hydrogen propulsion.
Marchionne is due to retire in 2019. Before he retires, the Fiat Chrysler CEO wants to create a 5-year plan till 2022, for companies to cooperate on hydrogen propulsion technology. The coming era is going to be fossil fuel free, and Marchionne feels that hydrogen propulsion could be a viable alternative to fossil fuels and take plug-in electric vehicles head on. Currently, electric vehicles are the dominant technology for a post-fossil fuel era. The plan is expected to be presented in the second quarter of 2018.
A part of that plan is for the company to become more streamlined with a more simplified portfolio. To this end, Marchionne is planning to separate two of the company’s three components businesses.
A subsidiary of the company, Magneti Marelli, develops and makes high-tech components for the auto industry. These components include parts for lighting, engines, suspension systems, exhausts and electronics. Marchionne said that the spin-offs from this subsidiary as well as from another subsidiary company, robotics maker Comau, would become separate operations. Comau especially could branch out independently given its specialization in developing robots and artificial intelligence.
However, what the final decision about these subsidiaries will be is still not decided and needs to be discussed with the board of directors, said Marchionne. Marchionne did, however, mention that there was a chance that these subsidiaries could be listed separately in case of a spin off, like in the past. Previously separated operations like tractor manufacturer, CNH Industrial, or even Ferrari have been listed as independent entities on stock exchanges in Milan and New York.
Teksid, another Fiat Chrysler subsidiary that produces iron and castings for the auto industry, is one the smallest component manufacturers in the Fiat Chrysler’s umbrella of companies, and is not slated to be spun off. Two other brands, Maserati and Alfa Romeo were also not going to be let go of – for many years to come, according to Marchionne.
The CEO added that he hoped to finalize the spin-offs by the end of next year, as this transaction would help the company with a boost in finances. The company is targeting achieving a cash-positive status by the end of 2018.
With regard to allegations of diesel emissions by the French and US authorities, Marchionne stated that while the French allegations held no legal base, there could be some manageable penalties.