Coverage: Fiat Chrsyler CEO warns that the future is electric

Fiat Chrysler CEO Sergio Marchionne spoke Monday at the Detroit auto show, and his statements included the belief that automakers have less than a decade to convert to electric vehicles.

Tommaso Ebhardt of Bloomberg News had the story:

Developing technologies like electrification, self-driving software and ride-sharing will alter consumers’ car-buying decisions within six or seven years, the Fiat Chrysler Automobiles NV chief executive said in an interview. The industry will divide into segments, with premium brands managing to hold onto their cachet while mere people-transporters struggle to cope with the onslaught from disruptors like Tesla Inc. and Google’s Waymo.

“Auto companies need to quickly separate the stuff that will be swallowed by commodity from the brand stuff,” Marchionne said.

In a two-hour interview in Detroit ahead of this week’s North American International Auto Show, Marchionne discussed his vision for the industry and confirmed plans to step down next year. Within a decade, he expects widespread adoption of cars at Level 4 autonomy, capable of driving without human intervention in restricted geographic areas. By 2025, he predicts that fewer than half the cars sold will be be fully combustion-powered.

Eric D. Lawrence of the Detroit Free Press reported that Marchionne also said Chrysler would not be broken up:

The notion gained steam last year as various Chinese companies were said to be interested in acquiring the iconic Jeep brand, which has been a major sales driver for Fiat Chrysler. Those rumors followed Marchionne’s own comments on the need for consolidation in the auto industry and public overtures to both General Motors and Volkswagen.

Marchionne spoke to reporters during the North American International Auto Show in Detroit.

“The answer is no we’re not going to break up anything,” Marchionne said. “We have no intention of breaking it up and giving it to the Chinese.”

Marchionne noted that the company does have a good partner in Chinese automaker Guangzhou Automobile Group. That partnership lets FCA manufacture in China.

The discussion, lasting nearly an hour, touched on a range of topics, from the time frame for the company’s board to name Marchionne’s successor, likely June 1 (his anniversary date with Fiat) or later, to electrification, his hope that the Trump administration changes some of its demands related to North American Free Trade Agreement negotiations and even why trucks sell so well in the U.S.

Larry P. Vellequette of Automotive News reported that Fiat Chrysler could have more cash than debt by June:

Marchionne, entering his 15th and final year running the automaker, said the automaker could finally have more cash on hand than debt by mid-year as it works to meet aggressive financial targets set in 2014.

“That [debt] problem is on the way out,” Marchionne said, reaffirming the company’s financial targets to generate up to $9 billion in operating profits this year. “Finishing the year with cash on your balance sheet instead of debt is a big, big step for us.”

Speaking at the auto show here on Monday, Marchionne said:

U.S. tax reform, which was signed into law in December and cut corporate taxes, will mean up to $1 billion a year going forward in tax savings. Marchionne said FCA’s senior leadership felt an obligation to share the windfall with 60,000 employees with the $2,000 onetime bonus announced last week.

FCA’s board of directors will pick his successor, to be disclosed this year, from among a group of internal male candidates. He said no female candidates were available for consideration because of the human resources FCA inherited.