Will Fiat Take Chrysler Away From Detroit?

Sergio Marchionne

Sergio Marchionne

Though it’s under new ownership after nearly going under in 2009, Chrysler (FIATY.PK) has remained a mainstay of the Big Three — the small circle of automakers based in Detroit, Michigan. Along with General Motors (NYSE:GM) and Ford (NYSE:F), the three companies were — and still are — the largest automakers in North America. More recently, the trio have become known as the Detroit Three, due to their geographic proximity to one another, and not surprisingly, their residency in Michigan’s largest city.

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However, the Detroit Three might soon become the Detroit Two, if Chrysler’s new parent Fiat acts on its interest in moving the company to the fair state of Tennessee. Reportedly, state officials are trying to romance Fiat’s CEO Sergio Marchionne into putting Fiat’s joint headquarters with Chrysler in the Volunteer State. Following meetings with Tennessee governor Bill Haslam, Marchionne said Tennessee officials have been “working me over pretty well.”

Marchionne was in the state to attend the ribbon cutting of an expansion of a Fiat subsidiary plant in Pulaski. However, when asked rhetorically where they would prefer the headquarters to be, Haslam replied: “I vote right here.”

Fiat currently calls Turin, Italy, its headquarters, but since the merger with Chrysler — which could be completed by next year — speculation has been that Fiat might move its own headquarters to the U.S. and provide a new agency that would manage both Fiat and Chrysler.

Tenneessee is a wonderful state,” said David Cole, chairman emeritus of the Center for Automotive Research, a top industry think-tank in Ann Arbor, Mich. “It’s more centrally located than Detroit, it has a great tax structure, and it’s a nice place to do business.” However, Cole — the son of former GM president Ed Cole — stands by Michigan and its role as the automotive hub in the U.S.