Chrysler 2010 Annual Report Download - page 98

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SUBSEQUENT EVENTS
AND OUTLOOK
SUBSEQUENT EVENTS
On January 10th, Fiat increased its stake in Chrysler Group LLC from 20% to 25% following achievement of the first of the three Performance Events (i.e.,
attainment of US regulatory approval and a commitment to produce an engine based on Fiat’s FIRE family in the USA) stipulated in the alliance agreement.
On February 9th, Moody’s Investors Service completed the review of Fiat S.p.A.’s rating for possible for downgrade initiated on 21 July 2010. Fiat S.p.A.’s
long-term debt rating was affirmed at Ba1 and its short-term rating at “Not Prime”. The outlook is negative.
On February 11th, Fiat Powertrain and Penske Corporation reached an agreement for the purchase, by Fiat Powertrain, of Penske Corporation’s 50%
stake in VM Motori S.p.A. The agreement is subject to the customary clearance by the relevant competition authorities. VM Motori, headquartered in
Cento (Italy), is a long-established company specialized in the design and manufacture of diesel engines based on proprietary technology. Pursuant to the
agreement, VM Motori will be subject to the joint control of Fiat Powertrain and GM (which acquired a 50% interest in the company in September 2007).
On February 15th, during a meeting at the Unione Industriale di Torino, Fiat presented a plan for the relaunch of activities at the Officine Automobilistiche
Grugliasco (formerly Carrozzeria Bertone), which has been inactive for several years. The plan centers around a €500 million investment (to begin in the
second half of 2011) for production of a new E-segment Maserati for international distribution. Start of production is planned for December 2012.
OUTLOOK
The 2011-14 Plan and financial targets set out in the presentation to the financial community in April 2010 are confirmed.
In particular, the 2011 targets for Fiat Group post Demerger are as follows:
Revenues of approximately €37 billion;
Trading profit between €0.9 and €1.2 billion;
Net profit at around €0.3 billion;
Net industrial debt between €1.5 and €1.8 billion;
Capex in the range of €4 to €4.5 billion.
Capital expenditure programs are expected to increase substantially over the abnormally low levels of 2010 with a return to normalized levels of capital
commitment across sectors.
While working on achievement of their financial targets, Fiat will continue its strategy of targeted alliances to optimize capital commitments and reduce risks.
REPORT ON
OPERATIONS
SUBSEQUENT
EVENTS AND
OUTLOOK