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Chrysler Cinquecento anyone? According to Reuters [via Automotive News Europe], Fiat is in talks with Chrysler LLC to form a strategic partnership. Automotive News says the deal could give Chrysler access to platforms, engines and transmission. The august publication also suggests the dalliance could lead to Fiat taking an equity stake in Chrysler. FIAT has been on the prowl lately to find a partner. PSA apparently gave the Italians the cold shoulder. Fiat’s CEO Sergio Marchionne had made noises that his company cannot survive alone and is in urgent need of a strong partner. Eh, Sergio! You said “strong” partner! Cosa fai?
35 Comments on “Chrysler And Fiat? Scusate?...”
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This could be a fantastic opportunity for Chrysler. First they could give Fiat $2 billion and then in a couple years have the option to buy them out or pay a further $2 billion to call the whole thing off. Win win!
Access to a new market?
Keep Jeep, Ram and Minivans?
Keep enough dealers?
If the terms are right it could be good for FIAT.
Bunter
This could be a fantastic opportunity for Chrysler. First they could give Fiat $2 billion and then in a couple years have the option to buy them out or pay a further $2 billion to call the whole thing off. Win win!
Beat me to it! Fiat is a losing proposition, especially for an already floundering automaker.
A government supported company assembling Fiats? Sounds familiar.
guyincognito stole my idea! Except he gets it backwards. Since Fiat is the one with (more) money, I think they should gain a 20% equity stake in Chrysler in exchange for, say, 5% of their own stock, then have to fork over $2b in a few years if they decide they don’t want to buy the rest…
Marchionne should have kept his mouth shut. If he waited long enough, he could have bought the whole Chrysler kit-and-kaboodle for the price of two pizza margheritas, a dozen canolis, and six lattes.
I was under the impression that FIAT isn’t doing much better. wouldn’t this be similiar to GM and FIAT doing business together… ‘lose-lose’ on both sides?
You have to wonder what Ford would say if FIAT were to start sharing the 500/KA platform with Chrysler.
Called it almost a year ago. It’s the only matchup that makes any sense for both. We’ll see.
What’s the matter Fiat? Were your cars getting TOO reliable?
“Eh, Sergio! You said “strong” partner! Cosa fai?”
Hah! :) Arrivederci amore…
What is in it for Chrysler:
– Alfa Romeo
– Fiat 500 (built in NA)
– small diesel engines
– small economical gas engines and transmissions
What is in it for FIAT:
– Access to NA market
– Access to a large dealer network
– Retain Jeep / RAM but use Fiat powertrains
– Kill off everything else
What FIAT should pay: 50 percent of 5 year profit projection for combined product line.
What Chrysler gets in return: Product to build and sell in NA. Right now, it has nearly nothing of value.
Sounds like a win-win for everyone except the UAW. Personally, I would love to be able to buy a new Alfa with a good dealer network, parts availability, and warranty.
It’s a great idea. Fiat really missed an opportunity when gas was $4/gallon. I’d love to get my hands on the 500.
But hopefully they’re more reliable today than my ’74 128 SL was.
Two words.
Studebaker-Packard.
See your history books to find out how well THAT worked out.
Wow. What a potential combo!
Fiat steel (“you can hear it rusting in the garage through the walls at night”)
Chrysler plastic interiors (Playskool?)
Marelli electricals (they make Lucas electrics look positively reliable!)
Chrysler “grenading” automatic transmissions
Fiat accounting practices
Chrysler UAW/CAW legacy costs adding to the price of the vehicles
Fiat Weird-Ass styling
Chrysler’s “quality” supplier base (which they’ve squeezed and threatened with lawsuits and unilaterally demanded price concessions from)
And US taxpayer monies being burned by the minute to support a bunch of NY banksters and possibly soon, Italian stockholders, too?
Again! What a potential combo!
NOT.
Reeks of total desperation on both of their parts.
Two words: Studebaker Packard.
A few more words:
Question: Wow – taxpayer money + FIAT designs. Does that remind you of anything?
Answer: Sure.
1) LADA in the communist Soviet Union
2) FSO (Polski-Fiat) in communist Poland
3) YUGO (Zastava) in communist Yugoslavia
Somebody call Malcolm Bricklin!!!! ((he imported the Yugo to the US))
Follow up sarcastic rhetorical question: So when does the FIAT Pelosi 500 GT get introduced at your not so friendly Dodge-Fiat dealer?
FIAT is (in)famous for its terrible reliability ! If the FIAT cars are still so unreliable, even they come to USA, they will bring no good to Chrysler.
The number of half-ignorant posts seem to be higher today…
“menno :
January 19th, 2009 at 2:17 pm
(…)
Question: Wow – taxpayer money + FIAT designs. Does that remind you of anything?
Answer: Sure.
1) LADA in the communist Soviet Union”
Umm excuse me? LADA is still the major car mfr in Russia (and decent-sized one in all-Europe) – IIRC Lada just sold some ~20k cars in Germany.
“2) FSO (Polski-Fiat) in communist Poland”
Ouch… FYI FSO was founded in the 1930s: http://en.wikipedia.org/wiki/Polski_Fiat#Before_World_War_II
“3) YUGO (Zastava) in communist Yugoslavia”
Still exist and it was a fairly successful brand until the Jugo war stopped all production.
Any more idea?
Who hasn’t Chryco been rumored to be in talks with?
That’s it, I’m starting a roumor that Chrysler is in talks to get access to my pocket lint, and a $1 Subway coupon, in exchange for the Neon platform and brand.
After the disappointment of the Gen III Prius porked up with its 1.8L engine and then finding the Honda IMA innards from the HCH stuffed into the new Insight, it might be interesting to see what the Fiat Panda Aria concept car with its two cylinder turbocharged Small Generation Engine would be like to drive. Assuming it’s now in production.
Like throwing an anchor to a drowning man!
First, the fiat of today is not the terrible fiat of the 70’s sold here. Secondly, given another fuel spike to say $350.00 per gallon, and fiats cute little stuff would look good over here. Can fiat go head to head with the Japanese and Koreans in the US market with small cars? I don’t know, but chrysler absolutely cannot. Fiat in Europe actually competes head on with VW in a small car market.
@ k.amm: Any more idea?
4) TRABANT in communist East Germany.
Made of compressed paper, I believe, with a 2-stroke engine.
(Mind you, in Cape Town I saw two Trabants which had driven down from Germany through Africa, so they can’t be all bad.)
jerry weber said:
First, the fiat of today is not the terrible fiat of the 70’s sold here.
The Chrysler (or GM) of today is not the terrible Chrysler (or GM) of the 70’s sold here either. At least that’s what the media has been saying. Didn’t help with sales, it seems.
MCS said: “A government supported company assembling Fiats? Sounds familiar.”
Thanks for the laugh. I’ve spent many an hour riding around Russian roads in those Ladas.
Like watching two corpses get married…..
Now Fiat wants to sting Chrysler? Do another GM?
Everyone overlooks the fact that Daimler still own 20% of Chrysler. Fiat is supposed to get 35% of Chrysler. If Daimler and Fiat were to merge (think about it on a Group level synergy) then Cerberus will be the minority shareholder. Plus it won’t cost either company much money as the US Govt. will bail Chrysler out. Brilliant move.
@LDMAN1
Not sure I follow your logic. DCX wrote the Chryco investment down to zero. So if 20% is worth zero, how much is 35% worth?
The right play is for a foreign brand to cut a deal on the low low with every Chryco dealership. The dealers agree that when Chryco goes bankrupt, they will become exclusive dealers for “brand X”.
This probably violates tons of contracts, laws and such, but what is Chryco going to do? Sue their dealers to keep them captive while the ship sinks?
Chryco is sooo weak.. How weak are they?!
– They don’t have the cash to mount a serious lawsuit against anyone… This would be a great time for the Chinese to start producing/importing knock off Jeeps and force Chrysler to mount a massive lawsuit.
– They can’t threaten to stop buying parts from suppliers that they just shut down for well over 30 days…
– They can’t tempt the dealers with new models that they don’t have…
– They can’t pay Cerberus rent for the HQ without cash from Uncle Sugar…
Do they have any leverage left on any front?
Mama mia! Santa pacienza!
Menno et al:
Usually you are very right, but may I respectfully disagree with you guys on this one? Fiat is now a world-class maker, in terms of quality, reliability plus they have that little unidentifiable drivability/handling/fun magic powder that they still seem to apply liberally in every car. And “weird-ass” design? Really? Tastes may very, but rarely have I seen Italian design called thus.
Actually, this makes sense. If they do it like the Renault-Nissan Alliance. Fiat calling the shots. And getting a much needed entry gate into America. And if they come slashing and burning through the excess dealers, factory capacity, excess labor etc.
Think maybe a ressurected Plymouth selling Fiat-engineered small cars, Dodge keeping only trucks and SUVs, Jeep back to its roots, and Chrysler still providing kick-ass American-style monster V8 and V6 cars (one or two cars and a minivan only).
And also selling imported Alfas for good measure.
Sounds like America could be in for a lot of fun.
But there are a whole lot of ifs.
Chrysler and Fiat are both on bucket lists. The deal looks better than it is.
It’s official.
@FromBrazil,
You make a good argument but do you REALLY expect them to make your sensical suggestions?
They will rebadge the worst of FIAT – if they can get them to pass a crash test, and sell them on the uneducated public (who don’t know they are buying a FIAT).
Chrysler must “pay for this privelage” by giving up 35% and providing access to their dealer network. Just what GM and Chrysler need – more competition.
Hey, here’s a plan, BUILD A DECENT CAR. Quit trying to take shortcuts by buying partnerships and giving away the castle.
And don’t get me started that the big3 can’t build a small car. It’s not that they CAN’T, they just DON’T.
I have to wonder if Chrysler LLC will simply move their HQ and what few engineering and designing staff they’ll be needing, to the Plymouth Road facility (yep, the old Kelvinator building, obtained when Nash merged with Kelvinator, then kept when Hudson merged with Nash to form American Motors, then retained when Chrysler purchased American Motors from stockholders and Renault along with / to get Jeep).
Makes more sense than having a massive building mostly empty in Auburn Hills. And heating it for these “global warming” winters 5 months long.
It was – 2 degrees F. this morning on the way to work (I’m in northwestern Michigan).
Of course, Cerberus could “demand” that they rent the Auburn Hills facility but since when does a landlord have that right? Not when the company they “own” suddenly is only 45.5% “owned”.
Kurt:
Like I said, there are many ifs, probably too many. But one can only hope someday some of these car execs get it right.
But I’m not holding my breath.
It’d be a shame if this killed Fiat.
And of course the Big 3 can build great small cars. At least 2 of them do so. In Europe and elsewhere (though in to me GM only makes decent, not great small cars).
This should be called Daimler-Chrysler the Sequel.
Remember, sequels are never as good as the original. This could be an absolute nightmare.
“Martin B :
January 19th, 2009 at 5:02 pm
@ k.amm: Any more idea?
4) TRABANT in communist East Germany.
Made of compressed paper, I believe, with a 2-stroke engine.
(Mind you, in Cape Town I saw two Trabants which had driven down from Germany through Africa, so they can’t be all bad.)”
Quite the contrary, it was a *very* reliable car! :)
FYI our first car was a Trabant – and I STILL think it was an AWESOME car, especially for its artificially absurd-low price: it was so simple and effective under the hood that even if it stopped you just opened the manual and be on your way again in 2 hours (unless your cardan has broken), even if you didn’t know anything about cars. Ours was few years old when we bought from a film director in the 70s (= excellent overall condition) and served us (family of 4) well for several years including vacation trips etc. If we needed anything for it, everything was always available for cheap. Compared to its engine (2-stroke little Otto) mileage wasn’t that great at all but compared to current numbers it was crazy good, around 40+MPG, better than current hybrids. :)
Of course it wasn’t as safe as others but also it wasn’t as fast as others – 600 ccm3 hah! :) – and so weren’t others etc – it didn’t matter at the time. :)
The point is that thanks to its simplicity it was a very reliable car, indeed. :D