If all company bosses were as articulate and provocative as Sergio Marchionne, business journalism would be a cinch. Jargon-laden and gnomic pronouncements aren’t his style.
The Fiat Chrysler Automobiles NV CEO served up his latest zinger on last week’s earnings call:
“From a valuation standpoint … I have never seen an industry which is as little loved as being an OEM today. For a period of time I thought that banking had reached the bottom but I think we have now surpassed them in terms of dislike.”
Later he described carmakers as having become “almost radioactive”, arguing it therefore made sense to try to insulate parts of the business from negative sentiment, for example via a possible spin-off of his company’s components unit.
Marchionne has a point. Investors are shunning auto stocks because of a cornucopia of worries related to technological disruption, emissions issues, an over-reliance on leasing and slowing U.S. sales. Last week, a possible German autos cartel joined that long list. But while the headlines are relentlessly awful, the operating performance of most carmakers has actually been pretty decent.
To read more of the original article, go to Bloomberg.