London base for FCA

Sergio Marchionne, CEO of Fiat Chrysler Automobiles (FCA), said the company’s headquarters would move to London. Reaction in Italy was muted despite fears that the politically-sensitive issue would affect Fiat business in Italy negatively.
Marchionne confirmed that executive functions need to operate out of London, in addition to his office and that of the board.
All manufacturing operations would however remain in Turin and Italy in addition to Detroit.
The reaction in Italy was alleviated as fears of job losses were unfounded, at least for now.
Some union bosses said that FCA plans include making investments in Italy and that is good for jobs. Firm Cisi, head of Italian metalworkers union, said “It does not matter where Marchionne decides to base his office and company headquarters as long as he continues to make investments in Italy.”
The consensus in the market is that Marchionne made the right choice.
Expressing that view, John Wolkonowicz, an independent auto analyst said that London is a financial center and is centrally located among FCA far-flung operations.
He said London avoids the baggage of choosing either Turin or Michigan.
Choosing either of Fiat or Chrysler hometowns would have alienated the other half of the company.
London is the perfect neutral grounds for the new FCA setup.
Eventually, it would not matter where global companies base their headquarters but rather how they perform.
The five-year plan announced by Marchionne was deemed too ambitious by investors and shares in the company dropped by 12 percent after Marchionne’s speech.
Analysts are questioning whether Marchionne could manage to multiply sales, raise profits and slash debts while investing 48 billion euros in a global expansion led by Jeep — all without raising capital or offering new shares.
To confirm his faith in his own plan, Marchionne bought 130,000 Fiat shares while Chairman John Elkman topped that with 133,000 shares bought in the company.
FCA is a company going through fundamental transformation.
There are so many risks associated with the plan announced by Marchionne, but his vision seems to be clear and confident.
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Adel Murad is a senior motoring and business journalist, based in London.
Email: [email protected]