Brent Snavely

Detroit Free Press

With one word on Wednesday, Fiat Chrysler Automobiles CEO Sergio Marchionne dropped a bombshell.

Marchionne was asked whether the automaker's Jeep and Ram brands, either together or separately, could be spun off into a separate, standalone company.

"Yes," Marchionne said.

The idea is likely jarring to workers and many others but is not out of the question for Marchionne, the mercurial CEO of the Italian-American automaker who has engineered a number of mergers, acquisitions and spin-offs.

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Marchionne, who engineered Fiat's acquisition of a controlling stake in Chrysler in 2009, spent five years integrating those two automakers into a single, global automaker.

But along the way, Marchoinne also split Fiat and Fiat Industrial, the Italian automaker's former agricultural manufacturing division, into two companies. That happened in 2011; now CNH Industrial has annual sales of more than $25 billion and is traded on the New York Stock Exchange.

Marchionne also spun Ferrari into a standalone company in 2016. Ferrari, also traded on the New York Stock Exchange, trades at more than $75 per share and generates more than $3.4 billion in annual revenue and close to $435 million in net income.

A spin-off of Ram and Jeep, if it happens, would not necessarily mean those brands would be cut off from the automaker.

Marchionne remains chairman and CEO of Ferrari and is chairman of CNH Industrial. Exor, an investment fund whose chairman and CEO is John Elkann, owns 26.9% of CNH Industrial's shares and 22% of Ferrari's shares. Elkann is the great-grandson of Fiat founder Giovanni Agnelli.

Morgan Stanley's Adam Jonas, the analyst who asked Marchionne about spinning off Ram and Jeep, dropped the issue after one question and moved on to another topic.

But it's not the first time that Jonas has explored the issue. In January, Jonas estimated that Jeep's value on a standalone basis would be $22 billion (about 20.3 billion euro), which was more than the market capitalization of Fiat Chrysler at the time.

Jeep has been growing rapidly in recent years. Its sales have climbed from less than 500,000 in 2008 to more than 1.4 million last year.

Marchionne set a goal in 2014 for Jeep's annual sales to exceed 2 million SUVs annually by 2018, and the brand is on track to meet that goal, Fiat Chrysler Chief Financial Officer Richard Palmer said Wednesday.

Jonas also values Ram at $11.2 billion (about 10.3 billion euro), Maserati at $3.5 billion (roughly 3.2 billion euro), and parts and components divisions Magnetti Marelli and Teskid at $3.5 billion (about 3.2 billion euro).

Marchionne has previously said he is open to spinning off Magnetti Marelli and Teskid or entering into a strategic partnership with another company.

On Wednesday, Marchionne said a sale or spin-off of the components division could still happen, but it's still too early for the company to make that call.

“And there is a point in time between now and the end of 2018 when I think we will be able to make a call about what the proper ownership of that asset is, and it may very well be that it is not within FCA," he said.

Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely.