Chrysler Group Becomes FCA US, Ending 89 Years As Auto Company Named After Its Founder

The U.S. auto company founded by Kansas-born railroad mechanic Walter P. Chrysler in 1925 will no longer carry his name. Fiat Chrysler Automobiles (FCA) NV said Tuesday that its U.S. subsidiary Chrysler Group LLC is now officially FCA US LLC, much to the chagrin of news headline writers.

Chrysler loyalists already suffered the termination of the company’s memorable Pentastar logo in November, causing an online backlash.

“When you see or hear news stories about us, we’ll be properly called FCA US LLC the first time our name appears in the story, but it’s OK if the reporter calls us FCA US on subsequent references,” Ed Garsten, whose LinkedIn profile still identified him on Tuesday morning as the head of Chrysler LLC’s digital media, said on the company’s official blog.

FCA US LLC covers all of FCA’s North America operations as well as “our activities in international markets,” Garsten added. “Nothing is changing from our operations side.”

Automakers tend to emphasize brand names over company names. For example, General Motors is rarely emphasized in market for its four main brands, Buick, Chevrolet, Cadillac and GMC. FCA will continue to use the Chrysler brand along with Dodge, Ram, Jeep, Fiat, Mopar and SRT.

“Changing the name of Chrysler's parent automotive group will mean little to the average consumer," Karl Brauer, senior analysts for automiotive pricing and data provider Kelley Blue Book, said in an email. "Car shoppers are often unaware of these corporate naming structures, instead paying far more attention to a vehicle's badge, the name on a dealership or the name referenced in marketing messages."

The question is whether the media will follow FCA’s instructions or find some way to stick to the more recognizable Chrysler name when referring to FCA’s U.S. subsidiary.

Chrysler became a victim of the 2009 collapse of the automotive market in the wake of the Great Recession. It joined General Motors in a government-administered bankruptcy that cost taxpayers $1.3 billion. (GM’s rescue, excluding its financing arm, cost the U.S. Treasury $11.2 billion.)

In January, Italian automaker Fiat SpA fully acquired Chrysler Group from a union trust for $3.65 billion and four separate payments totaling $700 million. The acquisition opened the way to merge Fiat with Chrysler, incorporating the new company as a Dutch holding company with a tax domicile in Slough, U.K.

The move to the U.K. is FCA’s effort to lessen its tax burden, explained Richard Murphy, a British fair tax advocate. The U.K. charges taxes only on profits earned in the U.K.

“I have a strong suspicion Fiat makes very little money in the U.K.,” Murphy wrote in a Tax Research U.K. blog post earlier this year. “This makes the U.K. a perfect headquarters location for a group that has absolutely no real ties with the U.K. and wishes to avoid sending its profits back to its real center of control – Italy, in this case.”

Last week FCA said it was offering 87 million common shares at $11 each in an effort to raise capital for an ambitious five-year plan to increased global auto sales to 7 million by 2018, up from 4.4 million last year. The company has one of the weakest balance sheets of top automakers, though it has seen huge success with its Jeep division and recent sales of its Chrysler 200 sedan.