Fiat now considering building Chrysler models in Italy , including Jeeps , for export to North America ! So , we bailed out Chrysler and now American jobs will be lost and Fiat will sell italian built vehicles here ????

http://www.businessweek.com/news/2012-10-28/marchionne-seen-missing-fiat-sales-target-by-19-billion#p1

Fiat SpA (F) Chief Executive Officer Sergio Marchionne set a target two and a half years ago to sell 6 million cars annually by 2014, a goal that analysts and industry observers at the time deemed impossible to achieve. They were right.

Marchionne, who runs both the Italian automaker and Chrysler Group LLC, has said he will revise his forecasts when the two companies announce third-quarter results tomorrow. Analysts estimate his sales target will need to come down by 15 billion euros ($19 billion).

“Marchionne was too optimistic in 2010,” said Giuseppe Berta, a professor at Bocconi University in Milan who has written several books on Fiat and has worked as a company historian. “Fiat and Chrysler can’t grow by self-propulsion to the famous 6 million-car target.”

With European auto sales headed for their biggest drop in almost two decades this year, Fiat has said losses in the region are on pace to widen to 700 million euros. A quick turnaround will be a challenge with austerity measures set to restrain demand to below pre-crisis levels until at least 2017, according to forecaster LMC Automotive.

Marchionne, who said as recently as April that he could stop losses in Europe within two years, will have to make do with lower sales than originally expected. The 2014 revenue target for the group, including Chrysler, Ferrari and Maserati, could be cut to 89 billion euros from the 2010 forecast of 104 billion euros, according to a Bloomberg survey of 13 analysts.

Shares Drop

Fiat dropped as much as 14 cents, or 3.3 percent, to 4.01 euros, the worst performer after PSA Peugeot (UG) Citroen in the Bloomberg European Auto Index, and was down 2.6 percent as of 12:05 p.m. in Milan trading. The stock has gained 14 percent this year, valuing the carmaker at 5.06 billion euros.

In unit sales, Fiat is likely to fall short of the target by 27 percent, or 1.6 million cars. Researcher IHS Automotive is predicting sales of 4.4 million in 2014 for the group, up from 4.1 million this year. In Europe, though, IHS expects sales to fall 1.4 percent to about 917,000, while in North America they could jump 6.2 percent to 2 million.

Fiat, which declined to comment for this story, isn’t alone in struggling in Europe. The French government has had to support Peugeot by backing 7 billion euros in new bonds for its financing arm. Ford Motor Co. (F) is closing three plants in the region, Daimler AG (DAI) scrapped its profit target for next year, and Volkswagen AG (VOW) posted its largest drop in earnings since 2009 in the third quarter.

Italian Plunge

Fiat’s problems are bigger than many rivals’ because its troubled home country accounts for half its sales in the region. Its plants in Italy, where car sales are on pace to plunge this year to the lowest level in more than three decades, are running at 50 percent of capacity, far below the 80 percent threshold typically considered profitable.

To counter the severe slump in European sales, Marchionne is considering building Chrysler models in Italy, including Jeeps, for export to North America. The Italian government is evaluating tax rebates on export goods to help Fiat. Marchionne may announce details of his plan as soon as Oct. 30, the people said.

“This makes sense on multiple levels” as it will boost plant utilization and would cap “Chrysler’s own potential, limiting the likely cost to Fiat shareholders of buying out the Chrysler minorities,” Stuart Pearson, an analyst at Morgan Stanley in London, said in a note to investors today. “However we see no quick answers, and fear debt could surprise negatively first,” said Pearson, who rates the stock underweight with a target price at 3.90 euros.

Europe Concern

“We are all concerned” about the European crisis, Marchionne said in an interview in Brussels on Oct. 10. While declining to give any details, he said he would update his targets for 2014 by the end of this month.

Those European woes have been offset by the strong performance of Chrysler, Fiat’s Brazilian division and supercar- maker Ferrari SpA. For the third quarter, Fiat’s earnings before interest taxes and one-time gains or costs -- what it calls trading profit -- will increase 10 percent to 938 million euros, according to the average estimate of four analysts surveyed by Bloomberg. Marchionne said at an event in Shanghai yesterday that third-quarter results are in line with estimates.