The tie has it

1 June 2018 By Antony Currie Follow @AntonyMCurrie

Shares fell 7 pct despite boss Sergio Marchionne’s pledge to pay a dividend, cut costs and double profit by 2022. The new plan also includes 9 bln euros for electric cars and a U.S. finance unit. That may worry owners that the CEO’s successor could fall off the spending wagon.

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Fiat Chrysler on June 1 unveiled its five-year plan to investors. The presentation, held at the carmaker’s test track in Balocco, Italy, detailed how the company hopes to increase earnings before interest and taxes to between 13 billion and 16 billion euros by the end of 2022, compared with 6.6 billion euros last year; cut costs by 10 billion euros; invest 9 billion euros in vehicle electrification; and derive 80 percent of its revenue from the Alfa Romeo, Jeep, Ram and Maserati brands, compared with 65 percent last year. It will shrink its line-up of smaller cars.

The company expects Jeep to account for one in every 12 utility vehicles sold by the industry by 2022.

Fiat Chrysler also expects to have net cash on the balance sheet by the end of June and said it intends to start paying a dividend equal to around 20 percent of earnings. Executives also announced plans to set up a financing arm in North America, whether by acquisition or by growing one from scratch. The company has been investigating taking an equity stake in Santander Consumer, which currently offers financing on Chrysler vehicles.

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