Chrysler 2011 Annual Report Download - page 99

Report on
Operations
98
Subsequent Events
and Outlook
Subsequent Events
In January 2012, Fiat announced that the “Ecological Event” (3rd performance event established in the Amended and Restated LLC Operating Agreement)
had been achieved, leading to a further 5% increase of its interest in Chrysler. Fiat currently has a 58.5% ownership interest in Chrysler. The VEBA Trust
owns the remaining 41.5% of the equity in Chrysler.
On January 18th, Fiat and Suzuki Motor Corporation reached an agreement for the supply of a 75 hp 1.3 MultiJet BS-IV Small Diesel Engine – to be
produced under license by Fiat India Automobiles Limited, a joint venture between Fiat and Tata Motors – to Suzuki’s affiliate company Maruti Suzuki
India Limited (MSIL). Fiat India Automobiles Limited will supply MSIL up to 100,000 engines per year for a period of three years, commencing January
2012. The engine will equip Suzuki branded vehicles produced in India by MSIL for the domestic market.
On February 1st at its Lingotto headquarters, Fiat met with trade unions that signed the company specific collective labor agreement, to present the
Group’s 2011 financial results. During the meeting, Fiat’s CEO confirmed that investments for the Mirafiori plant in Turin would go ahead. Plans call for
production of at least two new models for the export market, with production to reach 280,000 vehicles per year accompanied by a progressive return to
full utilization of all plant employees. Investment is to commence in the second quarter of 2012 and retooling of the plant will be completed during 2013.
Production of the first model (Fiat brand) is scheduled to begin in December 2013 and the second model (Jeep brand) is slated for production beginning
in the second quarter of 2014. The CEO also confirmed that Mirafiori would continue production of the Alfa Romeo MiTo, for which a refresh is planned,
as well as the Lancia Musa, on the basis of market demand.
On the same occasion, it was announced that another 662 new employees would begin work at the Pomigliano Newco, bringing total employment at
the plant to 1,845.
On February 6th, Standard & Poor’s announced that it had placed Fiat S.p.A.’s long-term debt rating (BB) under review for possible downgrade. The
short-term rating was affirmed at B.
On February 16th, Fiat S.p.A announced pricing of CHF 425,000,000 guaranteed 5.00% notes due September 2015, with an issue price of 100% of the
principal amount. Closing is currently expected for 7 March 2012, in line with Swiss market practice. The notes will be issued by Fiat Finance and Trade
Ltd. S.A. (a wholly-owned subsidiary of Fiat S.p.A.) under the GMTN Program guaranteed by Fiat S.p.A.
On February 22nd, the Board of Directors of Fiat S.p.A., in confirmation of the resolution of 27 October 2011, called an Extraordinary General Meeting for
approval of the conversion of preference and savings shares into Fiat S.p.A. ordinary shares. Holders of preference and savings shares will also be asked
to approve the conversion at the respective Special Meetings. The Board also voted to submit a proposal to Shareholders for adoption of a Long Term
Incentive Plan, in the form of grants of Fiat S.p.A. ordinary shares, linked to achievement of performance objectives and continuation of a professional
relationship with the Group. Finally, the Board voted to submit a proposal to Shareholders for renewal of the authorization to purchase and dispose of
own shares.
Subsequent Events and Outlook