GM wants to dump Opel on Fiat, but Fiat has its eye on GM’s successful Latin American division. GM sees a chance to hop on Fiat’s runaway train and is considering giving the operations to Fiat for a stake in the Marchionne empire. Two anonymous sources tell The New York Times that Fiat’s CEO “has indicated a willingness to give up less than 10 percent of Fiat to General Motors.” GM is said to be asking for 30 percent. How awkward.
Confirmation that Sergio Marchionne will be CEO of both Fiat and Chrysler has analysts questioning whether a third company might be a bit excessive. “A person has to sleep,” observes one Credit Suisse wonk. The implicit point seems to be that Fiat’s “supersize me” campaign is the personal project of one man and his unexplained fascination with attaining 5m annual global sales. And why might GM desperately bid for a tiny stake in a firm it ran screaming (and $2 billion lighter) from just a few years ago? “It lets Fiat do the hard work of scaling up Opel, while giving something valuable to GM in the long run,” explains Philippe Houchois of UBS. Yes, but it also rids GM of one of its few sources of short-term cashflow. But hey, who needs those when you’ve got the American taxpayer on the line? Am I right?
It’s like they’re all exchanging empty envelopes that might (or might not) have IOUs inside.
One day there will be a brilliant caper movie (or should that be documentary) made about it all.
WTF? GM could have saved a couple of G$ about 5 years ago. But no, why not wait unti the S*** is about to hit the fan.
“I have picked a bad day to give up amphetamines.”
It doesn’t make sense that Fiat might be looking at Gm South America. First GM does very well there (2nd to VW in last year’s sales I read somewhere) and Fiat would be shooting itself int he foot. it has a good thing going in Latin America although FIAT in Brazil stands for what loosely translate into(the thing that causes traffic). on a recent trip there the only makes i could see dominating are VW, Chevrolet, and FIAT.
In any case, if Fiat is eying Opel’s platforms then there is no need to get involved with GM Latin America, since they are one in the same.
In any case, i think this Fiat world domination scheme is worthwhile watching. if it works, i can imagine some nice models coming out of it.
I think GM is in the hopes of, when this deal turns bad in a couple of years, Fiat will have to buy THEM out this time, and for a lot of cash. I mean, that thing happened when it was they other way around, so why not this time as well?
If this deal somehow goes through, what would they do regarding the massive overlaping of products of Chevrolet and Fiat?
A Brazil centric comparison:
Palio and Uno x Celta and Old Corsa
Siena x Prisma
Punto x New Corsa
Strada x Montana
Idea x Meriva
Stilo x Astra
Linea x Astra Sedan and Vectra
The only cars I can remember that do not have a double are:
Palio Weekend (station wagon)
Doblò
Zafira
S10 and Blazer
and finally the imported and rebadged GMs (Omega, Captiva, Tracker)
Words fail me.
Awesome. What would you call a mashup of Chrysler, FIAT, and GM funded by the US, Canadian and German governments?
Because this tie-up worked out so well last time…
It’s all a high-stakes game with a few dozen players. Everyone else is just along for the ride.
Want to be among the players? Then learn the game and play it well.
Hint: it’s not really about the cars.
Ford deserves our respect for sitting out the latest rounds and focusing on their core oprerations. But if and when they have excess cash again, they’ll likely be back in.
guyincognito,
An organization so distracted by the problem of fitting it all together that products will get insufficient quality attention.
Two-way mergers / alliances fail over and over.
So, how about a three-way?
I am so sick of every time I turn around reading another good part of GM that they’re dropping. It becomes more evident every day that the people at the top of this company have absolutely no clue what the fuck they’re doing.
I am so sick of every time I turn around reading another good part of GM that they’re dropping.
I’m sick and tired of continually reading plans and rumors of GM dropping Brands and Divisions and never actually cutting anything.
What have they actually gotten rid of over the past 6 months?
guyincognito :
“Awesome. What would you call a mashup of Chrysler, FIAT, and GM funded by the US, Canadian and German governments?”
The name already exists: that’s called clusterf*ck.
It’s still early in the day. Let’s give GM a chance to deny this rumor.
Then let’s call ’em a bunch of losers.
Anybody else see the story about the fleet sales convention? Or the story that the rental car fleets want the manufacturers to lease them the cars, rather than buy them?
And now GM loses 6 billion in the first quarter.
This is craziness.
Someone please wake me up when this is all over.
Ingvar:
I think you’re close. Instead GM sells LA (and whatever else FIAT wants), and in 3-5 years buys it back for pennies when FIAT is choking on their acquisitions and close to BK.
It happened with Japan buying up lots of US real estate in the late 80s/early 90s IIRC.
Bonus: FIAT gets tagged with all the blame for un-employing thousands trying to make the mess profitable…not GM.
@Autobraz
From what I’ve heard, they want from GM the production capacity. Not the cars. GM’s small cars would be phased out, and Fiat would milk the larger cars for as long as possible. Not to mention getting the subsidies GM got for building the factory in Rio Grande do Sul. In terms of engines you might also see GM’s 1.4 live on.