Fiat Chrysler Automobiles' CEO Sergio Marchionne has a track record of saying things that make jaws drop everywhere. Case in point comes to us from The Detroit Free Press. During the company's first-quarter earnings call, Morgan Stanley analyst Adam Jonas asked Marchionne if there was a possibility of spinning off Jeep and/or Ram Trucks into a separate, standalone company.
"Yes," said Marchionne.
The Free Press notes that Jonas dropped this subject and moved on to another question. It needs to be noted that this isn't the first time that Jonas has brought this idea up. Back in January, Jonas estimated Jeep's value on a standalone basis would be $22 billion. Ram Trucks isn't far behind with an estimated value of $11.2 billion.
There is also precedent for this idea. Marchionne has a history of spinning off brands while keeping them under the FCA corporate umbrella. Last year, Ferrari was spun off to its own standalone company and now trades on the New York Stock Exchange. It currently generates more than $3.4 billion in annual revenue and close to $435 million in net income. Marchionne serves as the chairman and CEO of the company.
But if such a move was to happen, it would take a fair amount of time for this changeover to take place.
Source: Detroit Free Press