Fiat Celebrates Debt-Free Year
January 28, 2008

Fiat CEO Sergio Marchionne last week celebrated Fiat’s first year ended since 1998 with no  debt, but criticized investment ratings services for not giving the Italian company its due, according to the Financial Times.

Fiat ended the year with 13 percent higher revenues and a rise in net income.

Marchionne, who has presided over “an astonishing turnround” from near bankruptcy, said he was “somewhat disappointed” Moody’s Ratings service had last week confirmed its same sub-investment grade rating, the paper reported. He said the ratings agencies were “now stretching the limits of credulity.”

Though Fitch gave Fiat an investment grad last June, Moody’s said last week it may upgrade the rating “over the next six to 12 months” if Fiat was able to sustain its market share in Europe and its new elevated levels of profitability.

Moody's is not alone in taking a wait-and-see position. In a commentary on AutoObserver in December, European correspondent Richard Feast praised Fiat for its recent accomplishments but noted the good times never last at Fiat.

Meantime, analysts pressed Marchionne about the possible separation of Fiat’s car division from its agricultural and construction equipment division. He said the group could take radical restructuring steps if investors undervalued the worth of the group compared with the potential sum of its parts, the Financial Times reported.

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