The former CEO of Fiat - Chrysler, Sergio Marchionne, was concerned about the debt level, the valuation of Fiat - Chrysler and the company's ability to generate ample cash to reduce the debt level and enter the electric vehicles business.

During 2014 - 2015, he first approached General Motors (the larger company) several times to acquire or merge with Fiat Chrysler; then he approached Volks Wagen. He was rebuffed by both companies.

Fiat - Chrysler's primary listing is on the NYSE as FCAU since Oct., 2014, and it also has a secondary listing on the Italian Borsa.

He then decided to sell the prized and name brand subsidiaries of Fiat Chrysler to generate cash and reduce the debt level of the company.

He spun-off Ferrari in the two stage process during 2014 - 2015. The 1st phase in 2014, made 10% of Ferrari publicly listed (RACE on the NYSE), and in the second phase of the spin-off, Marchionne spun-off 80% of the company. (10% of Fiat - Chrysler is still owned by the founder Enzo Ferrari heirs.)

Today (Oct. 17, 2019), FCAU on the NYSE has a Price / Earnings Multiple of 5.80 X and is selling at $13.45 per shar, and a total Market Capitalization of $26.6 Billion.

Whereas, Ferrari (RACE) is trading (today, Oct. 17, 2019) on the NYSE at $158.35 per share, a Price Earnings Multiple of 35.31 X, and a total Market Capitalization of $39.7 Billion.

Marchionne's ultimate objective was to lower the debt level of FCAU, and he looked at spinning-off or selling: Luxury brands (Maserati) and Mass Market Brands (Alpha Romeo, Ram and Jeep). To make Fiat - Chrysler into a middle-market company and have the ample cash and resources to enter the electric vehicles business.

Marchione was able to bring down the Net Industrial Debt level of FCAU to 4.2 Billion Euros by June 30, 2017. This is the debt that involves the industrial production of vehicles. Large automotive and agricultural equipment companies also borrow long term for their vehicle sales - financing business. The data I am posting below from the 20-F Report of FCAU shows total debt (net industrial debt and the debt of the auto sales financing business.

Marchionne's term was to expire in Mid - 2019; however, he passed away from complications involving cancer in July, 2018.

Total Debt to Total Capitalization Ratio from 20-F Report of FCAU for Year End, Dec. 31, 2018. The audited Balance Sheet is on page 153 of the 20-F Report attached below. (I converted the Euros to US Dollars as of the exchange rate of Dec. 31, 2018, at $1.14 = 1 Euro.)

Fiat - Chrysler Debt to Total Capitalization Ratio as of Dec. 31, 2018:

Total Debt $16,643 Million / (Debt $16,643 Million + Equity at Market Value $28,580 Million) = 36.8%

Questions:

Do you think Marchionne's plan to spin-off name brand and luxury subsidiaries would have worked to lower FCAU's debt ratio?

And to increase the Price Earnings Valuation of FCAU?

And to give the company ample cash and clout to enter and expand in the electric vehicle business?