TOLEDO, Ohio — Fiat’s purchase of the U.S. government’s ownership stake in Chrysler Group LLC resolves one thorny political issue. Another lies ahead: Where to base the combined company.
Work is under way to merge the two into one automaker. Fiat SpA is Italy’s largest employer and a source of national pride, but it would be problematic for Chrysler to relocate to a foreign country after being saved by U.S. taxpayers.
“It’s a difficult call,” said Sergio Marchionne, CEO of both companies. “Access to financing is probably the most important criteria.”
Mr. Marchionne addressed the company’s future Friday after President Obama toured a Chrysler assembly plant that makes the Jeep Wrangler. Mr. Obama came to the plant in the politically important state of Ohio to celebrate the resurgence of the U.S. auto industry and Chrysler’s announcement that it’s repaying its government loans ahead of schedule.
“What you’ve done vindicated my faith,” Mr. Obama told a group of auto workers. “Today all three automakers are turning a profit.”
Mr. Marchionne also said he’s not planning to take the automaker public until at least next year. He thinks Chrysler needs more time to prove itself. The automaker earned $116 million from January through March, its first quarterly profit since 2006.
“My gut suggests no earlier than 2012,” he said.
Chrysler said last week it will cut ties with the U.S. government within the next three months when Fiat buys the U.S. Treasury’s 6 percent interest in Chrysler for $500 million. The deal will give Fiat a majority 52 percent stake, just two years after it agreed to manage Chrysler after its bankruptcy.
Mr. Marchionne is talking with Canadian officials about buying that country’s 1.7 percent ownership in Chrysler. Hesaid he was pleased that the automaker kept its word to pay off the U.S. money it borrowed two years ago. “It shows we respect our commitments,” he said.
Mr. Marchionne said he was irked Friday when he saw signs around the plant with the DaimlerChrysler name, the German automaker that owned the company for a decade.
“Before we start talking about combining names, let’s get rid of the old one,” he said.
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