Sunday, April 12, 2009

Fiat & The Offer Chrysler Can't Refuse

The New CEO of Chrysler. Don't ask too many questions

Chrysler is one of the Big 3 American automakers. It was founded in 1925 and has been in bankruptcy protection since 1929. Well maybe not 1929, but since the
70's the company has been a perpetual rollar coaster ride, much like the ride offered by its many cars. From the heights of the K-Car and the 300 to the depths of near closure. The saviours of the company include Lee Iacocca, Mercedes and currently Fiat.

Fiat and Chrysler are currently in talks to form a strategic partnership. In Italian this type of partnership is Google translated as "L'offerta non รจ possibile rifiutare". The offer that Fiat has put on the table gives the Agnelli Family 20% of Chrysler for no money. Chrysler cannot refuse because the Government is going to force them to take it. Chrysler gets access to the small car fleet & technology that Fiat has to offer. Chrysler though will not get access to the most important component of Fiats success which is Italian Government handouts to the Agnelli Family.

The Fiat Multipla: One of the lovely cars Chrysler will sell in 2 years.

Fiat is like an Italian GM. It is crippled by union contracts and Italians control the unions. The cost of making the cars in Europe is high. Lower cost competition is increasing on all sides, from the Japanese and Koreans who make better cars to the Chinese and Indians who make them cheaper. Until 2004 Fiat was going heading to disaster until Sergio Marchionne took over as CEO. From the looks of it Mr Marchionne plans for Chrysler will only make sense if he takes a page out of the Goodfellas playbook. Fiat has to take over the factories, take everything they can out of them. When there is nothing left they can burn them down to the ground for the insurance money. Fiat is getting 20% of Chrysler for mediocre technology and the chance to sell the compact 500.

Chrysler has to wait two years before their factories will be ready to build Fiats. The models Fiat will sell can't be sourced through Italy because of safety regulations and the high cost of building cars in Europe. By then trucks and minivans may be popular again due to low gas prices and Chrysler will, like Bonnie Tyler, need another hero.


Anonymous said...

Not familiar with this site, so I am giving you the benefit of the doubt by deciding this is a JOKE forumn. You apparently have not one clue regarding Chrysler or it's history. You list Mercedes as a savior when in fact they are the main reason behind Chrysler's troubles. When Chrysler was bought(stolen) by Daimler, they in turn sucked 8-9 billion right to Germany. Also there was a two year period where Chrysler actually CARRIED Daimler. Do some research by reading a book or two and try again next time. TY !

Editor In Chief said...

Thanks for the support.
You are correct Mercedes is to blame for high union contracts, overeliance on the K-Car and cab forward platforms,competition in the minivan segment and quality issues going back to the sixties. Yup Benz is to blame.
Whatever is left Fiat will suck back to Italy.

Diavoli said...

Oh stop being so lovey dovey Editor-in-Chief, some American guy finally decides to post a comment on your blog and you have to kiss up to him? Who is he Obama? Just admit the facts, terrible cars made equals drop in sales...period. Chrysler is a dinosaur in the market place, horrible cars horrible engines, if they can't take the heat of the car business then get out of it so real car companies can come in and get a slice of the pie...

Anonymous said...

Conveniently, if you click on any of the Chryster ad links below, none of the ad revenue will go to Chrysler. It like this blog is sucking money into their pockets.