Chrysler 2013 Annual Report Download - page 34

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Report on
Operations
7. The Group may not be able to realize anticipated benefits from any acquisitions and challenges associated with strategic
alliances may have an adverse impact on the Group’s results of operations
The Group may engage in acquisitions or enter into, expand or exit from strategic alliances which could involve risks that may prevent the Group
from realizing the expected benefits of the transactions or the achievement of strategic objectives. Such risks could include:
technological and product synergies, economies of scale and cost reductions not occurring as expected;
unexpected liabilities;
incompatibility in processes or systems;
unexpected changes in laws or regulations;
inability to retain key employees;
inability to source certain products;
increased financing costs and inability to fund such costs;
significant costs associated with terminating or modifying alliances; and
problems in retaining customers and integrating operations, services, personnel, and customer bases.
If problems or issues were to arise among the parties to one or more strategic alliances for managerial, financial, or other reasons, or if such
strategic alliances or other relationships were terminated, the Group’s product lines, businesses, financial position, and results of operations
could be adversely affected.
8. The Group may not achieve the expected benefits from the integration with Chrysler
The acquisition of 100% of the equity in Chrysler and the related integration of the two businesses is intended to provide the Group with a
number of long-term benefits, including allowing new vehicle platforms and powertrain technologies to be shared across a larger volume, as
well as procurement benefits, management services and global distribution opportunities, particularly the extension of brands into new markets.
The integration is also intended to facilitate penetration of key brands in several international markets where the Group believes products would
be attractive to consumers, but where they currently do not have significant market penetration.
The ability to realize the benefits of the integration is critical for the Group to compete with other automakers. If the Group is unable to convert
the opportunities presented by the integration into long-term commercial benefits, either by improving sales of vehicles and service parts,
reducing costs or both, the Group’s financial condition and results of operations may be materially adversely affected.
As a result, any adverse development for Chrysler or Fiat, or the failure of the Group to achieve the intended benefits of the related integration
could have a material adverse effect on the Group’s business prospects, financial condition and results of operations.
9. The Group’s business operations may be impacted by various types of claims, lawsuits, and other contingent obligations
The Group is involved in various product liability, warranty, product performance, asbestos, personal injury, environmental claims and lawsuits,
governmental investigations and other legal proceedings including those that arise in the ordinary course of its business. The Group estimates
such potential claims and contingent liabilities and, where appropriate, records provisions to address these contingent liabilities. The ultimate
outcome of the legal matters pending against the Group is uncertain, and although such lawsuits are not expected individually to have a
material adverse effect on the Group’s financial position or its results of operations, such lawsuits could have, in the aggregate, a material
adverse effect on the Group’s financial condition or results of operations. Furthermore, the Group could in the future be subject to judgments