Fiat Chrysler Automobiles

Performance indicators

2020

Fall in net profit to 24 million euros

On March 9, 2021, Fiat Chrysler Automobiles announced the results of its activities in 2020. According to the company's report, FCA's net profit fell from 6.63 billion euros in 2019 to 24 million euros in 2020. At the same time, adjusted net profit was recorded at 1.9 billion euros (compared to 4.3 billion euros in 2019). And adjusted profit before interest and tax (EBIT) amounted to 3.7 billion euros, EBIT margin - 4.3%.

Diluted earnings per share from continuing operations ("diluted EPS") at the end of 2020 amounted to 0.02 euros against 1.71 euros per share in 2019 year, while adjusted diluted EPS - 1.19 euros (2.73 euros per share in 2019 year).

The company's turnover during the reporting period amounted to 86,676 million euros (compared to 108,187 million euros in 2019). Cash flow from operating activities - 9,183 million euros (10,462 million euros in 2019). Positive free cash flow from industrial activities amounted to 0.6 billion euros. Significant cash inflows in the second half of the year offset pandemic-related cash expenditures in the first half of the year. Capital expenditures were recorded at €8.6 billion (+ €0.2 billion).

The total world shipments amounted to 3.435 million units (-22%), due to production interruptions and falling demand due to the COVID-19 pandemic.

Available liquidity as of December 31, 2020 is €31.4 billion, including €7.3 billion of affordable and unused renewable credit lines.

Capitalization of Fiat Chrysler Automobiles for November

Capitalization of car manufacturers for November 2020

History

2022: Fine $300 million for using software that underestimates harmful emissions of cars

On May 25, 2022, the American division of Fiat Chrysler Automobiles reached a plea agreement to settle a multi-year criminal investigation on charges of falsifying the environmental performance of diesel cars. It is known that the company used special software that underestimates the real picture with emissions.

The plea decision, agreed with representatives of the US Department of Justice, will include a guilty plea and a payment of about $300 million and should be made public in early June 2022, although the deadlines may shift. The company will then plead guilty during a subsequent hearing in U.S. District Court.

FCA, which is now part of Stellantis, has agreed to plead guilty to charges of criminal conspiracy stemming from its efforts to evade emissions requirements for more than 100,000 Ram pickups and Jeep sports and utilitarian vehicles.

Fiat will pay $300 million for the use of software that underestimates harmful emissions of cars

A spokeswoman for Stellantis, formed as a result of the merger of Fiat Chrysler and France's PSA Group, and the Justice Department declined to comment on the agreement.

An FCA official is also preparing to stand trial on charges of misleading regulators about the pollution of vehicles under investigation. In 2021, the Department of Justice charged two more FCA employees with alleged emissions fraud.

The indictment alleges that these officers conspired to install false devices on cars so that they could deceive state emissions tests and then pollute the air on the roads beyond legal standards.

Fiat Chrysler in 2019 agreed to pay about $800 million in fines and other expenses to resolve lawsuits filed by the United States and other countries in connection with violation of harmful emissions legislation. Later in 2019, the first criminal charges were brought against the then senior engineer Fiat Chrysler, who was accused of conspiring with other company employees to mislead regulators and the public about car-made pollution.^[1]

2021

Resumption of Fiat car production in Russia

July 20, 2021 it became known that in Russia the production of Fiat cars resumes after a 10-year hiatus. Stellantis announced projects that will contribute to the implementation of a strategy for the systemic development of a production enterprise in the Kaluga region (PSMA Rus), deepening localization and increasing local production. More details here.

Completion of merger with Peugeot S.A.

On January 16, 2021, Groupe PSA announced that a merger between Peugeot S.A. ('Groupe PSA') and Fiat Chrysler Automobiles N.V. had been completed. More details here.

2020: Establishment of Stellantis together with PSA Groupe

Fiat Chrysler Automobiles NV ("FCA") and Peugeot SA ("Groupe PSA") on September 29, 2020 announced the composition of the Board of Directors of Stellantis, a company that will be the result of the merger of the two enterprises. The completion of the merger of companies will take place by the end of the first quarter of 2021, subject to the previously agreed closing conditions in the Merger Agreement. More details here.

2014: Repurchase of Chrysler stake from UAW Trust

In early 2014, the need for an IPO disappeared, as Fiat and the UAW Trust still managed to come to an agreement: on January 1, 2014, Fiat announced that it had agreed to repurchase the shares for $4.35 billion. Investors in the market appreciated the skills of Fiat managers quickly: in the first minutes of trading on January 2, 2014 on the exchange in Milan, the company's shares rose 15 percent^[2].

2011: Receiving control in Chrysler

Subsequently, the Italian manufacturer bought back Chrysler shares in small shares from the American and Canadian governments. Officially, control of Chrysler passed to Fiat in July 2011 - at that time the Italians owned 53.5 percent of the shares of the American company. Another 41.5 percent by that time accumulated the pension fund of the US Auto Industry Union (UAW Retiree Medical Benefits Trust). In May of that year, Chrysler fully settled with the US government, which provided the concern with a total of $7.6 billion in financial assistance.

Not many believed in the success of the reorganization under the control of the Italians, but Marchionne did his job. Under his control (Fiat CEO also headed Chrysler), the American manufacturer began to produce really popular cars. Engineers from Fiat settled technical flaws in Chrysler machines, changed the design and interior. At the end of 2012, the company's sales amounted to almost 2.4 million cars, exceeding the pre-crisis level. Moreover, Marchionne managed - as in the case of Fiat - to make the company profitable again.

Finally, the Italians managed to conduct a competent advertising campaign, the result of which was a change in the attitude of Americans towards their own cars. An important role in this was played by a video featuring rapper Eminem, who was born and raised in Detroit.

Since 2011, when Fiat gained control of Chrysler, the Italians have been negotiating the repurchase of the remaining stake from the UAW Trust, but the parties could not get together in price: the fund valued the share at ten billion dollars, while Fiat offered about four billion. Under an agreement dated 2009, according to which the fund and Chrysler bought back the shares of the automaker, the UAW Trust had the right to demand an IPO (initial offering of shares), which it did in 2013. As part of the placement of 16.6 percent of the shares, it was planned to establish the fair value of the securities.

2009: Chrysler Investment

Fiat decided to invest in Chrysler's business in the second half of the 2000s. By that time, the Big Three company was not in the best condition. In 2007, the German concern Daimler-Benz AG, with which Chrysler merged in 1998, sold 80 percent of the latter to Cerberus Capital Management. The deal amounted to $7.4 billion, while Daimler paid $36 billion for Chrysler in the late 90s. The policy of the German concern in the end had almost a decisive impact on the condition of Chrysler. So, Daimler did not indulge American factories in investments and reduced talented engineers, which, on the contrary, would be worth keeping with all their might. The new owner, not particularly versed in the auto business, could no longer fix the situation.

As a result, in 2009, Chrysler sales fell below the million car mark. For comparison, in 2005 the figure was 2.3 million cars. The situation in the company worsened sharply amid the financial crisis of 2008, which affected other American automakers, in particular General Motors.

In April 2009, Chrysler filed for bankruptcy proceedings under Article 11, which provides for protection from creditors and restoration of the company's operations. The situation in Chrysler was discussed at almost every meeting of the relevant group of officials involved in the development of the US auto industry. In the end, it was decided to provide financial assistance to the company.

was preferable to invest six billion dollars in saving the company than several billion in its funeral," Steven Rattner explained in his book on the actions of the US government during the crisis in the auto industry.

In fact, Chrysler was nationalized, and almost immediately after its rescue, the US authorities began to look for a buyer for a potentially valuable asset.

As a result, American officials decided on a deal with Fiat, which for its first stake in Chrysler paid not with money, but with technology and management experience. The Italians had this experience in excess: since 2004, Fiat was led (and continues to lead) by Sergio Marchionne, who started a large reorganization in the company in the mid-2000s. Its consequences were even more active development in foreign markets and a drop in share in Europe, as well as the company's break-even - at the end of 2005, Fiat made its first profit in 17 quarters.

1980s and 1990s: takeover of Alfa Romeo and Maserati

In the mid-1980s, Fiat bought Alfa Romeo, in the mid-90s - Maserati.

In addition, Fiat began to actively develop factories outside the country (including in Latin America and Africa) and create joint ventures with other well-known companies. So, Fiat "made friends" with the Swedish Saab, creating the Saab-Lancia 600 car.

1970s: Start of "penny" production in Russia and diversification

In 1970, the AvtoVAZ plant in Togliatti began work, where the first "penny" was released - the Russian version of the Fiat 124.

By the end of the 70s, Fiat owned Alitalia Airlines, electronic equipment and printing machine companies, a construction company and other assets. Because of this diversity, car production was separated into a separate company.

1969: Takeover of Ferrari and Lancia

In 1969, Fiat acquired control in Ferrari and Lancia.

1967: Takeover of Italian Autobianchi

The new methods of leadership have quickly borne fruit. In 1967, Fiat made its first takeover by buying the Italian automaker Autobianchi. The deal helped Fiat bypass Volkswagen's largest European car competitor. Even then, the press predicted that over time the Italian company would be able to deal with the leaders of the world car market from Detroit: Ford, General Motors and Chrysler ("Big Three").

1963: Decentralization of Agnelli Grandson

Relatives of the founder of Fiat again took senior positions in the company in 1963, when Giovanni's grandson - Gianni Agneli - became first the chief manager, and three years later took the presidency. Gianni, who led Fiat until 1996, radically changed the company's management system. He abandoned the previous policy of centralized decision-making, which was effective before the war (unless, of course, the costs of strikes under the leadership of Palmiro Togliatti and Antonio Gramsci were considered), but began to slow the foreign development of Fiat in the 1960s.

1940s: Cooperation with Mussolini, removal of Agnelli Sr.

During World War II, Fiat worked for the regime of Benito Mussolini, and it is not surprising that after 1945 year Agneli and his family were removed from the management of one of the largest Italian conglomerates.

Giovanni Agnelli\Photo: omniauto.it

1923

Fiata workers participate in the rooftop race of the company's first plant in Turin, Italy, 1923.

1899: Foundation of the company

Fiat, almost from its founding - 1899 - has always been interested not only in the local market, but also in foreign ones. Already at the very beginning of the 20th century, Fiat, under the leadership of its founder and manager Giovanni Agneli, began exporting cars to the United States. A year before the revolution in the Russian Empire, the Italians built a plant and in Moscow - the "Automobile Moscow Society" managed to collect more than a thousand trucks before the Bolsheviks came to power.

Giovanni Anyeli understood business diversification not only as an increase in sales markets, but also as a variety of goods: if Fiat began as an automobile company, then quite soon it began to produce engines, military aircraft, and machine guns.