Well, that’s one way to avoid the US government’s $500K CEO salary cap for companies receiving bounteous billions of federal largesse. A Fiat spokesman confirmed Fiat CEO Sergio Marchionne’s ascendency [via The Detroit News] and our theory that saving the US auto industry by surrendering it to Italian control (of all things) is a prime example of off-the-charts political expediency. Given the non-TARPies debt holders’ surrender and Marchionne’s “appointment,” the question now becomes, can he actually do this thing? TTAC commentator PCH101 reckons Sergio’s got the turnaround chops for the gig but may not have a handle on American tastes. Howard Wheeldon clocks the German part of the program and compares bite marks to chewing ability. “In a way all of this has come a little bit too fast,” worries the senior strategist at BGC Partners. “One would like to see two or three years of really strong results in Europe and in Italy for Fiat before they delve out this far and fast. I am extremely worried about this German thing and their wanting to become No. 2 in the world. It will end in tears.”
Could he possibly do any worse than the last few CEOs?
Nobody knows the future. Nobody. Marchionne is clearly taking very risky moves. If he pulls it off, stories will be told for generations. If he fails, the I told you so gang will pile on. At least he is on the field playing ball, which is more than can be said for the people in the stands.
Mr. Marchionne (Super Sergio), get friendly with Carlos Ghosn in a hurry. He’s a man who can juggle 2 car companies.
The New Chrysler, Part 5! We mean it this time.
“Sergio’s got the turnaround head for the gig, but may not have a handle on American tastes”
Oh… was the Sebring “American Taste”? If so, bring on Fiat.
How do these tie-ups make sense now, when they didn’t make sense back when these companies actually had money and energy to spare?
The Fiat-Opal marriage looks like a no-go (for now), however perhaps bagging Opel was not the game plan after all.
If Fiat could take over Opal at no cost – then sure, what a great win.
At the worst, Fiat is now positioning itself as an auto contender – that will be considered as a suitor when the next round of consolidations roll around in the next few years.
Sergio knows that when markets contract – it’s eat or be eaten. The recent moves on Opal could just be an attempt to ensure a place at the dinner table – not on the dinner table.
Give the guy a chance, he had nothing to do with any of the problems destroying the US auto industry. All accounts portray him as a no bullshit person of action and results. Certainly he can do no worse than the moronic dimler boys – I remember when Wolfgang gave a viper engine to a machine shop and they put a motorcycle frame around it. Automotive news had it on their front cover like it was some giant breakthrough. Sergio may just become the Garibaldi of the auto world.
John Horner : I believe it’s human condition to want to see someone fail, and humans love to complain. The auto industry just magnifies everything into an arena that people can relate with. The Truth About Hair Care Products just doesn’t seem to have the same allure; although firms in consumer products have been failing / getting bought out for years.
I live near a city, Saskatoon, SK. Sergio is (I believe) chairman of the board of directors for CNH (Case New Holland.) Sergio is coming out to the plant in Saskatoon. From an employee on a local web forum :”They remodeled the entire front office, including the bathrooms, and also built him his own office with room for his own personal chef. Chef? You heard me….”
Interesting anecdote on the man.
Seems like a sound strategy, even if Chrysler ultimately fails (as it richly deserves to). By the time the next crisis (or should I say Chrysis) for Chrysler comes along, the global economy will most likely be out of the woods and the U.S. can afford to let the #3 carmaker fail without severely impacting overall economic health.
And who knows, it’s even possible Chrysler will again produce vehicles people want to buy (insert unicorn joke here).
In times of uncertainty, fortune favors the bold.
This is going to be fun!
I agree with John Stewart on this one when he said the other night this merger will:
“…bringing Detroit much needed leadership, who with Hitler’s help, fought Ethiopia to a draw.”
Hahahaahaaaa.
…and you probably mean BCG not BGC ;)
I can understand where Sergio is coming from. He isn’t putting any cash in. If he makes it work, fabulous. If he doesn’t he will at least get an opportunity to cut the rings off the corpse’s fingers.
Another possibility. Sergio plays lets make a deal with Carlos. Each gets something. Or Sergio is just trying to pump it up so he can sell FIAT’s auto business to the next sucker.
I can understand where BO is coming from. It’s not his money and the UAW is a core supporter. Taking care of them is the Chicago Way.
Now the UAW. Surely they can’t be betting that Sergio will make it work. That is so unlikely.
My guess will be that Gettelfinger wasn’t kidding when he said that they do not want to be a long term investor. They will hold on long enough to pump and dump before Fiasler goes down for the last count.
Now how they are going to do that is beyond my imagination. I don’t see an IPO for this mess in the near, or even not so near, future. Maybe some PE funds could take it off their hands, but I don’t think that would happen unless BO has some candy treats in his pocket to give them. Maybe the Gettelfinger hopes that the economy will have recovered enough by next year to allow animal spirits to take charge of the PE market, and he will find a sucker.
Oh, that leaves the rest of us.
IT SHINES AND IT STINKS
Deal with it.
“It shines and it stinks. Deal with it.”
We apparently have no choice, until oh about November 2010, Robert.
Personally, I can’t see one good reason for my children and potential future grandchildren and their children, to pay taxes/interest on monies p*ssed away by a corrupt Illinois gangster administration, propping up their UAW buddies.
And handing control of the thing to the Italians?! And partial ownership for free?! WTF!
“The New Chrysler, Part 5! We mean it this time.”
No one wants to be seen as the one who pulled the plug on this one.
Just keep throwing money at it.
Miracles happen….don’t they?
If nothing else, it’ll be interesting if Fhrysler wind up offering a tiny little 500 alongside a great big 300.
“…bringing Detroit much needed leadership, who with Hitler’s help, fought Ethiopia to a draw.”
Cheap shot.
Fiat risks little or nothing. Fiat wins if Chrysler Fiats sell. In the process, Obama will pump whatever it takes to keep Chrysler alive. Fiat wins with free US dollars. Same for Germany and Opel.