Hello Fiat; Goodbye America
It is time to be very afraid. Capitalism has been twisted into a Gordian knot. The outlook for success is not good and there may be a Draconian twist at the end.
Yesterday, Chrysler Corp. filed for Chapter 11 bankruptcy, checking the appropriate boxes for 'over $1 billion' in Estimated Liabilities and 'over 100,000' Estimated Number of Creditors. The filing is one thing; the hype is something else entirely.
The Obama has spoken. The New New Chrysler, owned by the UAW, the government and Fiat, will produce a new generation of vehicles, apparently small Fiats. The government will provide $8 billion in government loans as seed capital. Cars will be financed by that nationalized bank known as GMAC. (You can't make this stuff up.) John Hinderaker has called these maneuvers 'Banana Republic Capitalism.'
Poor Ford. During his announcement, Obama kept talking-up Chrysler and GM, two companies in which the government has major equity stakes. Notably absent was any thumbs-up for Ford, the automaker who didn't go running to the gummint for bailout bucks. Not only does Ford now have to negotiate its labor deals with a competitor but it also has to compete with the Cheerleader-In-Chief.
In 2008, the old Chrysler (aka - New Chrysler) lost $8 billion producing 1.45 million vehicles - over $5,500 per vehicle. How this company will now develop vehicles so good that it can raise prices by $6,000 or so remains to be seen.
I don't think it can be done.
Chrysler is estimated to have $35 billion in revenue in '09. If true, the firm would not be among the top seventy companies in the Fortune 500; its 2009 sales may be less than Apple's. With 54,000 employees, Chrysler now has fewer workers than Cisco. Chrysler is a pale shadow of its old self.
Obama hopes that the liaison with Fiat will produce better cars. Fiats are expected to arrive at the (substantially) reduced number of Chrysler/Dodge/Jeep dealers sometime in 2011.
Fiats are neither assembled nor sold in North America at this time. Fiat Auto is the largest vehicle manufacturer in Italy and has a substantial manufacturing presence in Brazil. It has smaller operations - many of them joint ventures - in Russia, Serbia, Poland, Turkey and some developing countries. Fiat has had decades of financial, product and managerial problems; in 2000, the Fiat family had to relinquish some control to GM just to survive. S&P rates Fiat as junk.
Fiats have a reputation in Europe for marginal quality. Jeremy Clarkson of Top Gear has remarked, "Italian cars were always a bit like Italian tempers. Easily broken." And: "Let's not forget that in the Top Gear customer satisfaction survey, Honda won and Fiat didn't. By a long way." The Fiat Panda he tested "had issues with noise, vibration and harshness. ... The engine gave me a headache, and because it's pretty loud I had to turn the stereo up and that made my headache worse."
On the best-selling, ItalDesign-styled Fiat Grande Punto super-mini global car: "The electric power steering is too sharp and the brakes too snatchy. It's hard to make it flow. And the clutch bite is so sudden I did stall a lot too. Other problems? Well, the stereo system couldn't receive Radio 2, the seatbelt warning beep was loud enough to shatter wine glasses, and if you put a can of drink in the cupholders and go round a corner it falls over."
 Clarkson called the Fiat Quobo "a danger to society." "Trying to break the speed limit in this car would be like trying to break the speed limit while riding a cow." He also noted that the car featured "a gearlever that feels as sturdy as one of Bugs Bunny's ears." He wrote that the Fiat Multipla was "the first car to resemble an Amazonian tree frog." The current model is "the most boring looking machine in the whole of human history. I've seen more exciting cardboard boxes."
This is why, in Europe, Fiat is losing market share to Japanese - and lately, Korean - offerings.
Americans overwhelmingly buy mid-size cars (Accord, Camry, Altima, Fusion, Malibu, Sebring), typically 190 inches long. Chrysler needs something to replace its woeful Sebring; Fiat does not make a mid-sized, moderately priced car. The Italian firm's expertise is in less-than-170-inch-long minicars.
The popular compact budget models (Civic, Corolla, Fusion, Cobalt, etc.) are about 180 inches in length. Fiat has nothing to offer in that size range except expensive (and therefore, uncompetitive) Alfas and Lancias.
The cute Fiat 500 may appeal to some but it is really small - 6 inches shorter than a BMW Mini. Small cars didn't save Chrysler the last time around. The Rabbit-sized Dodge Omni/Plymouth Horizon models were handily outsold by the larger Dodge Aries/Plymouth Reliant K-cars by almost 2 to 1 in 1981.
 Japanese automakers became successful in America because they learned to incorporate features which Americans demand in their vehicles: powerful air-conditioners, smooth & reliable automatic transmissions, good audio systems, foolproof power windows and cushy, supportive seats for the obese. Fiat doesn't have a good track record in any of these areas. In Europe, manual transmission-equipped cars account for 80-90% of all sales, depending on the country.
Henry Payne, who writes for National Review Online and is editorial cartoonist for The Detroit News, has noted, "Chrysler will also be one-tenth owned by the feds, meaning that a private, for-profit company will be majority-held by two entities whose priorities are not making cars at a profit but saving union jobs and expanding the web of regulation. Former American Motors president Gerald Meyers told WJR-Radio after Obama's announcement that union/government ownership of an auto company amounted to 'a grand social experiment.' Would it work? 'No,' he answered.
Obama's plan also amounts to a grand experiment in bankruptcy filings. Never before has a major company entered Chapter 11 with the full backing of the U.S. government. That means the Treasury will guarantee Chrysler product warranties and supplier contracts. It also means that the White House will put enormous pressure on the court to get the outcome it wants."
And that's the scary part. Imagine Obama, faced with a yardload of small cars which no one wants to buy - made by the New New Chrysler and the federalized General Motors. It is not hard to imagine him pushing a huge gas tax bill (proceeds used to build windmills and the like) through a Democratically-controlled Congress.
Oh boy - $7.00 per gallon gas prices ought to get America interested in those little Chrysler Fiats and Chevy Cruzes. While destroying the rest of the economy.
Frightening. (posted 5/1/09, permalink)
May 18, 2009 Update: Chrysler may die of neglect because there is no one to 'champion' it. I don't mean cheerleading. I'm talking about someone to step up and finesse the suppliers, play good cop/bad cop with opponents, cheer up the remaining disheartened dealers and inspire the long-suffering lower management and technical employees. These tasks must be undertaken if Chrysler is to stay alive.
 That's what Lee Iacocca did almost 30 years ago. But he's long-gone from Chrysler and, at 86 years-old, ain't comin' back. Today's senior execs aren't interested; they're too busy trying to get around the bankruptcy salary cap rules, floating their resumes and making contacts in preparation for post-Chrysler futures.
Fiat is standing by - uncommitted, waiting to see if the bones of the Chrysler wreckage are worth picking. Fiat CEO Sergio Marchionne will allegedly be the new chief executive of the New New Chrysler but he is spending no time making encouraging comments to the press or interested parties. He remains disengaged, afraid that he'll be asked to put his (Fiat's) money where is mouth is. He wants "nothing-a-down, nothing-a-month. Capisce?"
Meanwhile, Renault-Nissan's Carlos Ghosn is waiting offstage, waiting to see if the Fiat 'deal' collapses. The Chinese are watching silently, on the lookout for Super Cheap Leftover Foolish American Bargains.
The bankruptcy court does not have 'champion' in its job description. It is busy doing its job, trying to sort out and dispose of the untidy remnants of Walter P's once-mighty empire. Despite Obama's wishes, the court - as the U.S. Constitution sets forth in defining Separation of Powers - will do what it deems necessary, even if that means a Chapter 7 liquidation. And that may well happen.
In the meantime, the remaining Chrysler-Jeep-Dodge dealers have to try to stay afloat while competing with terminated dealers' Everything-Must-Go fire sales. All the while realizing that there may be no future for them anyway; vehicle production has ceased and product development is stalled or non-existent.
Where will the surviving dealers get much-needed operational financing to carry them through this difficult period? Local banks? Noooooo. Banks are running scared, haunted by the risky, foolish real estate loans they've made in the recent past. They've now made credit tighter than the sphincter of an Ex-Lax abuser with a hacking cough.
Few, if any banks are crazy enough to underwrite a brand-damaged (therefore high-risk) auto store. In fact, would anyone at a local bank be nuts enough to buy a new Jeep, Chrysler or Dodge? Or even finance one - absent a Rosie-O'Donnell-hefty down payment? (posted 5/19/09, permalink)
Excuse Me While I Laugh: Chrysler brand CEO Peter Fong sees his brand being "a notch above Lincoln, a notch above Cadillac" in the future. I suspect that would be in the very far, Nostradamussy future. Chrysler hasn't been the equal of Cadillac since the early 1930s, if then. (I have a picture in my head of a LeBaron-bodied 1933 Chrysler Imperial Eight phaeton.)
When I was growing up in the 1940s and '50s, Chrysler was a mid-priced brand. That's why Chrysler Corporation broke out Imperial as a separate nameplate, although the Imperial brand never quite carried the cachet of Cadillac or Lincoln.
Everybody knows that, when Plymouth was killed, Chrysler became the New Plymouth. Witness the Chrysler PT Cruiser which was supposed to be a Plymouth model. In Europe, the Neon carried Chrysler badges and was considered a joke brand. In the U.S., it's now a commodity minivan-for-mommy brand. Or rental car fodder.
I would peg the reemergence of Chrysler as a true luxury brand at several decades after the last Sebring owner passes away. (posted 9/23/09, permalink)
Pentastar Mess: Douglas A. McIntyre has written that Chrysler may not make it another year, due to its tumbling sales and growing financial losses at partner Fiat.
Chrysler only sold 62,197 cars in September - down 42% from the same month last year. Chrysler is being handily outsold by GM, Toyota, Ford and Honda. Nissan and Hyundai are nipping at Chrysler's heels. The only five-digit monthly seller at Chrysler is the Dodge Ram pickup - Chrysler's only model in the top 20 vehicles by sales volume. 13,452 Rams were sold in September, compared with 33,877 Ford F-Series.
I was pessimistic about Chrysler's survival when it first filed for that bizarre banana-republic bankruptcy, which I now refer to as Obamaruptcy. And the subsequent shotgun marriage to Fiat - a nuptial which only made sense after a lot of drinking or a severe head injury.
But - drunk or brain-damaged - you and I are on the hook for Chrysler, since we have become Involuntary Stockholders. The $14.3 billion we taxpayers put into Chrysler is more and more likely to be lost completely. Getting our money back is as probable as winching a '58 Crown Imperial limo out of a tar pit which has been declared a National Historic Site.
McIntyre concluded, "Chrysler is going out of business. The company just hasn't made it official." (posted 10/5/09, permalink)
Tow Truck Operators Rejoice: The Wall Street Journal has reported, "Four months after exiting bankruptcy, Chrysler Group LLC is about to unveil a product road map that relies heavily on vehicles from Italian partner Fiat SpA while abandoning many of the U.S. car maker's own models." The article noted that "the majority of the Dodge and Chrysler lineups will be reworked atop Fiat platforms, save the rear-wheel drive architecture of the Dodge Charger/Challenger and Chrysler 300."
Six months ago, I wrote that Americans overwhelmingly buy mid-size cars (Accord, Camry, Altima, Fusion, Malibu, Sebring), typically 190 inches long. Chrysler needs something to replace its woeful Sebring; Fiat does not make a mid-sized, moderately priced car. The Italian firm's expertise is in less-than-170-inch-long minicars.
The popular compact budget models (Civic, Corolla, Fusion, Cobalt, etc.) are about 180 inches in length. Fiat has nothing to offer in that size range except expensive (and therefore, uncompetitive) Alfas and Lancias.
The cute Fiat 500 may appeal to some but it is really small - 6 inches shorter than a BMW Mini. Small cars didn't save Chrysler the last time around. The Rabbit-sized Dodge Omni/Plymouth Horizon models were handily outsold by the larger Dodge Aries/Plymouth Reliant K-cars by almost 2 to 1 in 1981.
Japanese automakers became successful in America because they learned to incorporate features which Americans demand in their vehicles: powerful air-conditioners, smooth & reliable automatic transmissions, good audio systems, foolproof power windows and cushy, supportive seats for the obese. Fiat doesn't have a good track record in any of these areas. In Europe, manual transmission-equipped cars account for 80-90% of all sales, depending on the country.
The old Chrysler is dead. So is the new Chrysler but no one wants to admit it. (posted 10/28/09, permalink)
Dakota Dog: Much is being written about the revival of Chrysler these days. But reliability and quality remain a gamble.
The most recent data from Consumer Reports lists Chrysler as the lowest-ranked manufacturer in the survey. "We can recommend only one of its vehicles, the four wheel-drive Dodge Ram 1500," the magazine report said.
 My very good friend and fellow car nut Ray purchased a new '05 Dodge Dakota ST Club Cab with V6 engine in November 2005. The Dakota had been redesigned for the '05 model year but still shared its platform with the Durango SUV.
An ominous sign of cost-cutters at work within Chrysler was the fact that this "new generation model also reverted the wheels back to five lug wheels from the prior generation's six lug wheels due to cost and assembly time saving measures," according to Edmunds.com.
All went fairly well with Ray's red truck until November 2009 when the transmission died at 32,826 miles. Luckily, most of the cost was covered by Dodge's 7 year/70,000 mile guarantee.
A few months later, he found that the Dakota was leaking transmission oil. The Dodge dealer found a leak from one of the lines to the transmission cooler. Ray wrote, "On questioning, I found out these lines are crimped together, not compression fittings, and leakage is common. I could barely contain myself.
I've had Tow Packages on all but one truck I've owned. Never any leaks, ever. The only transmission failures have been on my two Chrysler T&Cs, and now on my Dakota. I was upset. I asked if when the transmission was repaired, did the Technician check the transmission cooler?"
No one seemed to know. Replacement parts had to be ordered; Ray's truck was out of service for over a week.
"I have it on good authority that the only Federal/State prohibitions against "crimped connections" are when brake lines are involved." One of his uncles, who had worked for the U.S. Army in vehicle maintenance, said that the army "will not tolerate any crimped connections on their vehicles."
Ray has told me that he is "done" with Chrysler products, regardless of who owns the company.
There are many thousands of stories like Ray's. Even if Chrysler starts making stellar vehicles next week, it will take years to restore its stinking reputation. (posted 12/10/10, permalink)
Modello Eccellente? No. Fiat would have us believe that its 500 minicar is as stylish as Italian supermodel Bianca Balti. U.S. sales of the tiny auto indicate that Americans perceive the little Fiat as more like Ugly Betty.
Automotive News has reported that "Chrysler Group has suspended production of its 1.4-liter engine that powers the Fiat 500 in North America due to slow U.S. sales of the subcompact, according to "a top UAW local official." Internal Chrysler documents show that the Italian-owned automaker has a 184-day supply of Fiat 500 coupes and cabrios available to dealers."
Over at TTAC, Ed Niedermeyer has quipped "in the US market, the 500 will be little more than an overpriced fashion accessory."
I've yet to see a Fiat 500 on the roads around here. Yet, Fiat-Chrysler CEO Sergio Marchionne stated that the 500 would "transform the U.S. market" and that the automaker would easily sell 50,000 units in the first year. Hmmmm. Year to date sales: 15,826 units. I'm not expecting the Abarth model to change things. It isn't competitive with the many performance variations of the BMW Mini.
Fiat - the company - is also in trouble at home. Automotive News has also reported that "sales in Italy this year are spiraling down to a 15-year low. Fiat's Alfa Romeo, Fiat and Lancia brands compound the market's weakness with aging products. Fiat sales and market share will continue to erode." The situation is exacerbated by Europe's faltering economy, and the sovereign debt and Euro crises.
I wonder: How much of U.S. taxpayer's Chrysler bailout money is being used to prop up the hideous wreckage known as Fiat? (posted 11/17/11, permalink)
History Repeats Itself: CEO Sergio Marchionne wants to merge Chrysler and Fiat. Chrysler's profit was down 65% for the 1st quarter of 2013, although it is selling cars at well above its 100,000 per month break-even point - almost 157,000 units in April. Sales of Ram pickup trucks are brisk; the Ram brand outsold GMC is April. Fiat, excluding its 58.5% stake in Chrysler, lost over $300 million during the quarter. It was the Italian automaker's seventh straight quarter of red ink.
AutoExtremist Peter De Lorenzo has written that the Fiat-Chrysler 'merger' - more like a twisted-up Gordian knot of perverted capitalism - was "never about saving Chrysler or rescuing its poor, downtrodden minions. And it was never about doing good for the perennially mocked City of Detroit or the domestic automobile industry for that matter, either. For Marchionne it was about taking over Chrysler, sucking every last dime out of it and using those profits to bolster Fiat, the Italian automaker whose reign as a perennial joke in this business goes back multiple decades."
Fiats have a bad reputation in Europe. Most people who live in Italy don't buy them because Fiat quality is so abysmal.
In Consumer Reports' Annual Auto Issue, the lowest rated brand was Dodge with a score of 46: "Most Dodges are unreliable and even the new Dart is not competitive with the best in its class." Second worst score went to Jeep.
In the compact field, the Ford Focus outsells the Dodge Dart by three-fold; the Honda Civic outsells the Dart by an even larger margin. The Dart is based on the Alfa Romeo Giulietta platform and is produced in Illinois at the Belvidere Assembly Plant.
Americans overwhelmingly buy mid-size cars (Accord, Camry, Altima, Fusion, Malibu), typically 190 inches long, rather than the less-than-170-inch-long minicars which are Fiat's area of expertise. Chrysler is not competitive in the mid-size arena; the Chrysler 200 (nee Sebring) and Dodge Avenger are outdated designs sold mostly to rental car companies, subprime borrowers and the ignorant. The mid-size Ford Fusion easily tops the combined sales of the Chrysler 200 and Dodge Avenger.
This automotive soap opera is reminiscent of the old Studebaker-Packard story. Those companies merged in 1954, with Packard hoping to pick up some more dealerships and Studebaker looking for a financial angel to save its money-losing operation. It didn't work. The Studebakerization of Packard in 1957 killed the once-proud marque.
Studebaker struggled along until 1966, when the auto brand finally expired. (posted 5/7/13, permalink)
"If You Like Your American Car Company, You Can Keep It." U.S. automaker Chrysler will become fully owned by Italy's Fiat under terms of an agreement that also involves the United Auto Workers union.
The agreement comes more than four years after the Obama administration brought Fiat in to keep Chrysler afloat as part of a "packaged bankruptcy proceeding."
Fiat's business in Europe has fallen apart as the EU economy has worsened. Chrysler sales were the only reason the Italian carmaker continued to post profits. (posted 1/3/14, permalink)
Is It Too Soon For TTAC To Start The Fiat-Chrysler Death Watch? In an order detailing the largest civil penalty for an automaker so far, the National Highway Traffic Safety Administration said that "Fiat Chrysler Automobiles could have to buy back 500,000 defective trucks and accept trade-in above market value for 1 million defective Jeeps.
The automaker's record $105 million fine includes a $70 million penalty, $20 million set aside for meeting safety standards dictated by the federal bureau and an additional $15 million in penalties if an independent monitor discovers further safety violations."
The record ruling comes after the agency said FCA botched recalls of more than 11 million vehicles for wide ranging issues, including Jeep models with rear gas tanks that could catch fire in rear collisions - a problem which has been linked to over 50 deaths. (posted 7/29/15, permalink)
Run! It's A Giant Fiat! A few weeks ago, MotorWeek tested a 2016 Fiat 500X. I had no idea what it was. When I saw it, the thing looked huge. It was taller than MW's host John Davis. I thought Fiats were small. It turns out that this is a Fiat-shaped SUV created by draping an oversized, cartoonish 500 body over a Jeep Renegade platform.
Like the Renegade, it is powered by a 180 horsepower inline four-cylinder engine mated to Fiat-Chrysler's troubled 9-speed transmission. MW said the shifts were sometimes jerky.
The 101-inch wheelbase SUV has far less cargo space than the Renegade because of the rounded sloping rear end - a typical Italian style-over-function feature. Davis said that, "the white painted concave dash reflected light into the passenger's eyes" - another bad design tidbit. MW reported that "the seats were stylish but not comfortable."
After traveling to Italy in 2002, I wrote this to my friend Ray:
"Italy is really a land of stylish designs that don't work: interesting-looking chairs that are uncomfortable as hell.
Futuristic-looking toilets that don't flush worth a ... well ... shit. (Once time I pressed the toilet-flushing mechanism and it fell off the wall and hit me on the head! And this in a four-star hotel! The device must have been manufactured by Fiat.) Shower controls which are ergonomic disasters. Light switches which are counter-intuitive.
Nice-looking towels that don't absorb water. And so on. Ad nauseum. It's good to be home. Where everything works."
Back to the road test: The 500X's ride was reported as "more jostling than the Renegade." The funny thing is, MotorWeek rarely gives negative reviews but they sure didn't seem to be enamored of this beastie.
The model tested was the AWD Lounge edition which had a starting price of $27,650. Ouch.
Watching the show segment made me wonder who the heck would buy this thing. I don't think Fiat-Chrysler knows either. Fiat has sold just over 25,000 vehicles (500, 500L, 500X) in the U.S. during the first seven months of this year - a drop of 13% from last year. That's a disaster and I think they're just spitballing model and line-extension ideas in a desperate move to try anything.
Part of the poor sales may be due to Fiat's abysmal quality. The most recent American Customer Satisfaction Index gave Fiat its lowest rating of 27 nameplates tested in 2015. Fiat scored 73 out of 100 possible points - lower than the Mariana Trench and just above an 1981 Trabant 601.
AutoExtremist Peter De Lorenzo noticed the extensive platform and component sharing at FCA, too. "Look no further than what 'Sergio the Great' Marchionne is campaigning to do. He believes that the auto industry - as defined by its separate corporate entities - is wasting billions upon billions of dollars on developing mechanical bits and on system redundancies that could instead be shared among multiple manufacturers, things "under the skin" that only the so-called enthusiast True Believers would know the difference, or even care about."
"Marchionne vehemently rejects the notion that his so-called "visionary" concept for the commoditization of the auto industry is being driven by the fact that FCA is on the edge of serious financial jeopardy, but the stark realities of the FCA numbers can't be concealed. Marchionne, the consummate mercenary, desperately needs a partner, or his self-made industry "legend" status will be relegated to the dustbin of history, filed under "just another guy with a dream and an extraordinary talent for making the most out of other people's money.""
It has been reported that FCA is starving its Chrysler Group for new model development money and that planned new models have been substantially delayed. This is a bad sign of things to come at Fiat-Chrysler. (posted 9/8/15, permalink)
Fiat-Chrysler's Last Gasp? Fiat Chrysler Automobiles N.V. is in trouble and I think the Italian-controlled Dutch multinational corporation may actually die during the next economic slowdown. Over the past 40 years, Chrysler has been on the brink of disaster more times than sweet Nell has been tied-up on railroad tracks.
In January 2017, the world's seventh-largest auto maker experienced a U.S. sales drop of 11%, the fifth consecutive monthly year-over-year sales decline. What's more worrisome is that its perennial best-selling Jeep brand is declining as well. Jeep is FCA's top product and has been carrying the company. In 2016, Jeep was the 6th best-selling vehicle brand in America - 926,376 examples were sold, representing over 40% of FCA's total sales. After years of uninterrupted growth, Jeep sales began to fall in September 2016. And have declined every month since then.
Fiat-Chrysler's CEO Sergio Marchionne has been choking off new Jeep model development money, so he could allocate more bucks to development of his pet brand, Alfa Romeo. Peter De Lorenzo, the Autoextremist, wrote that Marchionne's strategy "resonates to a level of flat-out stupidity that is simply impossible to comprehend."
Ram pickups were up slightly in January but, as John Rosevear of The Motley Fool noted, were "eclipsed by the newer Ford F-150 and Super Duty models and General Motors' revamped Chevrolet Silverado and GMC Sierra. Both GM and Ford saw average transaction prices on their full-size pickups rise last month, while FCA's fell year over year - a bad sign."
Low-margin fleet sales represented 28% of FCA's total U.S. sales in January. Of even greater concern is the fact that FCA's product offerings are dated and Fiat, Alfa, Dodge and Chrysler are on their way to becoming dead brands due to falling sales in the U.S. In January, Chrysler sales dropped a incredible 39%; Dodge sales fell 17%. Fiat sold only 2,164 units while only 108 Alfas found buyers in January.
Donald Trump is making lots of noise about tax cuts but any such proposals have to work their way through Congress and may not become part of the Tax Code until 2018 or later. Meanwhile, auto sales seem to have hit a cyclical plateau and are overdue for a fall. If the U.S. vehicle market collapses soon, Fiat-Chrysler may take a fatal hit because they are so weak. Consider what business columnist David Olive wrote recently: "In fiscal 2015 - a year of record sales volume, FCA eked out a profit of $410 million on record sales of $120 billion. Its profit would have been just $104 million without the contribution of Ferrari, which FCA has recently spun off." If this is the best FCA can do in good times, imagine how dismal the numbers will be during the next downturn.
I don't think Chrysler can survive another drop in the auto market; the liquidation locomotive is barreling down the rails toward little Nell.
If Fiat-Chrysler goes bankrupt, I suspect that the Jeep and Ram brands will find new homes. Jeep remains a popular and iconic brand and some other manufacturer will snap it up from the smoking ruins of FCA. Jeep might go to Ford, Hyundai or even the Chinese, who have been making Jeep knock-offs for local consumption for over a decade. Ram would probably be bought by one of the Asian automakers (Toyota, Nissan or perhaps Hyundai) to fill holes in their lineup. I would expect Dodge and Chrysler to join Plymouth and DeSoto in the dustbin of history. (posted 2/14/17, permalink)
Coupling: Fiat -Chrysler and Peugeot owner PSA plan to join forces through a 50-50 share swap to create the world's fourth-largest automaker, triggering a new wave of consolidation in the car industry.
 Fiat-Chrysler and PSA said they aimed to reach a binding deal to create a $50 billion company domiciled in the Netherlands, with listings in Paris, Milan and New York and with PSA's Carlos Tavares as CEO and FCA's John Elkann as chairman. The move comes less than five months after FCA abandoned merger talks with PSA's French rival Renault. PSA makes Peugeot, Citroën, DS, Opel and Vauxhall automobiles.
Chrysler's North American vehicles are built on aging platforms. FCA would get access to PSA's more modern vehicle platforms (although most are for small cars which aren't selling well in the U.S. these days), helping it to meet tough new emissions rules, while Europe-focused PSA would get access to FCA's large U.S. dealer organization (although having lots of dealers didn't help sell Fiats or Alfas in North America). PSA brings more electric car experience to the table. Neither company has much of a presence in China.
At this point, I don't know if this is a smart and inevitable strategic move or a desperate one. (posted 11/5/19, permalink)
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copyright 2009-19 - Joseph M. Sherlock - All applicable rights reserved
Disclaimer
The facts presented in this blog are based on my best guesses and my substantially faulty geezer memory. The opinions expressed herein are strictly those of the author and are protected by the U.S. Constitution. Probably.
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If I have slandered any brands of automobiles, either expressly or inadvertently, they're most likely crap cars and deserve it. Automobile manufacturers should be aware that they always have the option of giving me free cars to try and change my mind.
If I have slandered any people or corporations in this blog, either expressly or inadvertently, they should buy me strong drinks (and an expensive meal) and try to prove to me that they're not the jerks I've portrayed them to be. If you're buying, I'm willing to listen.
Don't be shy - try a bribe. It might help.
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