The Chrysler division of Fiat SpA announced that it plans to cancel a request to the Canadian government for the retooling a minivan factory and an upgrade of another plant located in the country. The company prefers to finance its own projects instead of allowing political interference in its business.
As reported by Bloomberg, Mr. Sergio Marchionne, who is the Chief Executive Officer of Fiat SpA, said at the Geneva International Motor Show today: “I don’t want politicians to screw around with the capital expenditure program. This is not their business. I am not here to try to satisfy people’s egos or politicians’ ambitions. I make cars, as simple as that.”
The Wall Street Journal also cited Mr. Marchionnes words: “By definition every time you can do things on your own you are much freer to do what you think is possible. We will continue to monitor the environment to make sure Canada is competitive.”
Until recently, the Chrysler division of Fiat was in talks with Canadian officials over loans for factories located in Windsor and Brampton, Ontario. The Chief Executive Officer of the company said in February that reaching an agreement was “not even close”, and Tim Hudak, who is the leader of the Progressive Conservative Party advised the government to decline the request of the carmakers division for “ransom” money.
Today Mr. Marchionne commented that the company will be “much freer” to make decisions about its investments, after officially announcing the applications withdrawal.
As reported by the Wall Street Journal, one of the spokesmen of the Ontario government explained it welcomed the final decision of Fiats division. The spokesman said that Ontario had been “actively engaged” with the company and is ready to collaborate with both Chrysler and other auto companies in a “fiscally responsible way”.
Mr. Marchionne, on the other hand, refused to specify a figure that the company plans spending, but said it would amount to less than 10 billion dollars. He shared: “These are private decisions, how much money we commit and this is not up for public scrutiny.”
Fiat SpA surged by 3.10% in Milan by 14:57 GMT to 7.97 euros, marking a one-year change of +92.66%. The company is valued at 9.67 billion euros. According to the Financial Times, the 17 analysts offering 12-month price targets for Fiat SpA have a median target of 6.50 euros, with a high estimate of 10.00 euros and a low estimate of 4.00 euros. The median estimate represents a -15.97% decrease from the previous close of 7.74 euros.
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