TURIN, Italy (AP) Fiat CEO Sergio Marchionne announced April 21 that the company will spin off its businesses in farm and construction equipment as well as heavy trucks in order to “give birth” to a global auto company that could feasibly build 6 million cars by 2014.
“We believe right now is the time to produce the spin off,” Marchionne told analysts after presenting Fiat’s five year business plan. “It’s the perfect time to do the spinoff. If we can do it now, we can weather anything.”
Marchionne said Fiat didn’t do it earlier because it needed the collective strength of all the business to turn the company around after he took over in 2004.
The spinoff will create Fiat Industries SpA, comprising CNH agriculture and construction equipment, Iveco and FPT Industries and Marine activities. Fiat SpA will include Fiat Group Autos, which includes the Fiat, Alfa and Lancia brands, as well as Maserati and 85 percent of Ferrari, as well as components and other related assets.
Marchionne said the demerger would give both businesses greater strategic flexibility.