Chrysler CEO Sergio Marchionne is taking a wait-and-see approach to a Chrysler IPO.
Chrysler CEO Sergio Marchionne says he’s keeping a close eye on rival General Motors’ planned IPO but likely won’t take his own company public again until at least 2011.
GM’s success could be a critical factor in Chrysler’s timing, said Marchionne, who also serves as CEO of the Italian automaker, Fiat, which took control of Chrysler following its emergence from bankruptcy in 2009.
“I want a full year of financial results” from Chrysler, Marchionne said during a session at the Walter P. Chrysler Museum honoring the U.S. maker’s former Chairman Lee Iacocca. “It also depends,” Marchionne added, “on how quickly and successfully GM’s stock offering goes.”
While GM has not officially announced its plans for an Initial Public Offering, a carefully orchestrated leak, last week, indicated it will make that details will be released mid-August, with the IPO expected to take place shortly before the November mid-term elections. GM has been under intense pressure from the White House to take itself public again to help blunt criticism of the Obama Administration’s multi-billion dollar bailout of the two domestic automakers.
Marchionne’s caution is no surprise, industry analysts suggest. Chrysler remains the most troubled of the Detroit makers and the one with the least certain future, despite its new ties to Fiat and the assistance of the federal treasury.
But the Italian-born, Canadian-educated executive has been sounding an increasingly upbeat tone, in recent months. Just last week, Marchionne suggested there is a “substantial recovery” underway, and hinted that Chrysler will post black ink – pre-tax – for the second quarter of 2010, with the automaker looking to break even for the full year. (Click Here for the full story.)
But the current year is, at best, a transitional one for Chrysler, which will have only one truly critical product launch coming up, the completely-redesigned 2011 Jeep Grand Cherokee. An array of additional products, many of them sharing platforms with vehicles sold by the various Fiat brands, only start to reach market next year.
Marchionne is clearly watching what his nearby neighbors are achieving as Detroit starts to gain momentum – both on the bottom line and in numerous recent surveys showing improved quality and customer perception. The Chrysler CEO had strong praise for Ford CEO Alan Mulally, saying he was “very impressed with what Alan has accomplished.”