Fiat Chrysler Boss: Ideas by President Donald Trump Positive If All Implemented
Donald Trump has urged auto executives, including Fiat Chrysler boss Sergio Marchionne, to make more cars in the US.
Donald Trump. (Photo: Reuters)
Fiat Chrysler boss Sergio Marchionne says President Donald Trump's proposals would be "overall positive" for his company's bottom line – but it's hard to say for sure until it's clear which ones will be implemented.
Marchionne said during a conference call that "the sum of all of them is positive." He added, however, that he was "unsure about what part of this package will get rolled out." Trump urged auto executives including Marchionne in a meeting to make more cars in the US. His proposals include a 35 percent import tax that could disrupt current production arrangements but he has also talked about slashing corporate taxes and regulation.
Marchionne also said discussions were "proceeding well" with US environmental authorities to get 2017 diesel models certified so they can be sold. The Environmental Protection Agency toughened testing for diesel from all automakers after Volkswagen was caught equipping cars with software that enabled them to cheat on emissions tests. That new testing has kept a number of models off the market for now.
Marchionne said Fiat Chrysler was "in the midst of some pretty intense discussions" on the 2017 vehicles with both the EPA and the powerful California Air Resources Board. He said the issue could be resolved "relatively quickly."
The US government accused Fiat Chrysler on January 12 of failing to disclose software in some of its pickups and SUVs with diesel engines, that allows them to emit more pollution than allowed under the Clean Air Act. That "notice of violation" affects certain vehicles from the 2014-2016 model years.
Fiat Chrysler has denied wrongdoing. Marchionne's comments came as Fiat Chrysler reported improved earnings for the fourth quarter and for 2016 as a whole. For the full year, it saw net profit jump to 1.81 billion euros (USD 1.92 billion) from 93 million euros in 2015 as a more profitable model mix and lower costs helped overcome a sales decline in North American markets.
Profit margins in its U.S. and Canada business increased to 7.4 per cent from 6.4 per cent. The margin is a key figure for automakers, reflecting how much they are able to earn per vehicle. The earnings mean an average profit-sharing bonus of USD 5,000 for 40,000 US workers. The money will go to eligible employees represented by the United Auto Workers' union.
The company also showed improvements in the highly competitive European market, where it increased its share of sales by 0.4 percentage points. Profits also jumped at its luxury Maserati brand. For the fourth quarter of 2016, global net profit more than doubled to 409 million euros from 196 million euros in the same quarter a year earlier. That was short of analyst expectations for 610 million euros, as compiled by financial information provider FactSet.
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