Fiat to increase its stake in Chrysler to 35 percent

Sergio Marchionne has announced plans for Fiat to increase its stake in Chrysler over the next two years to 35%. The first purchase, expected to happen this year, will increase the stake by 5%, and the two subsequent purchases will depend on the company’s distribution outside the United States. “In the next 24 months maximum we must arrive at 35 percent of Chrysler,” Marchionne said.

Marchionne also defended Fiat’s decision to invest abroad; a move that has caught the criticism of many. Aside from Chrysler, Fiat has invested in companies in China and Russia in order to survive the shrinking global market. Many are concerned that Fiat’s real plan is to direct manufacturing away from Italy.

Fiat plans to present its five-year plan on April 21, but rumors are abound right now that claim the loss of 5,000 jobs at Fiat; a claim that Marchionne vehemently denies. In fact, Fiat plans to increase production another 250,000 units per year in three years. He also defended the closing of the Sicilian plant, pointing out that logistics make it a financially unsound operation.

– By: Stephen Calogera

Source: MSNBC