It’s hard to speak of the time that Sergio Marchionne has spent working with the shattered remains of what was Chrysler in anything other than a positive light. After the divorce from Daimler’s “merger of equals”, Cerberus Capital and their CEO for Chrysler, Robert Nardelli, took what was left and hacked it to bits, cutting spending, scaring away talent and effectively bringing Chrysler the closest to death it had every come. When Marchionne and Fiat stepped in, absorbed the remains and promised a turnaround, it was effectively a Hail Mary play at saving the remaining vestiges of Chrysler Corporation’s legacy for future use. And, oddly enough, it worked. If you doubt it did, look at how many gussied-up Chrysler 200s were sold before the current version debuted; based on the exceptionally sad-sack Sebring sedan, a catchy ad campaign and some attention to the interior of the car got them rolling off of the car lots. Not bad at all.
Lately in the news, the same story seems to crop up: Marchionne wants to merge what is now FCA US with (fill in the blank) as part of his view that a merger will happen in the automotive industry by 2018. So far, he has been shot down by GM, GM’s Opel division, Peugeot, Toyota, and Ford. But the real question is why is he hunting down a deal in the first place? Marchionne isn’t an idiot…if he was any less talented than he is, there’s a good chance that Chrysler and Dodge would be gone and Jeep would’ve been sold to the highest bidder. Fiat’s been clinging to life, Alfa Romeo hasn’t been a stellar performer, Lancia is all but dead anyways, Maserati is holding on and Ferrari is about to spin off into private hands. With all of those nameplates, histories, and the current capabilities of the engineers, why is it that he’d rather collude with another manufacturer instead of taking them on? The answer is efficiency, and Opel’s CEO Karl-Thomas Newmann pointed it out best: “In principle, Marchionne is right — the auto industry develops the same things ten times over.”
Ok…let’s review here: every manufacturer designs their own engines, chassis, electronics, running gear, bodies, platforms, and competes with other manufacturers, let the best design win. That’s been the premise for decades, and it is that competition that drives innovation and change. Take Chrysler in the early 1990s: when the Ford Taurus debuted in 1986, Chrysler had a couple of options for competition: a smaller K-car based front-driver, like the Lebaron GTS, that was comparably smaller and underpowered, or the M-body platform (Diplomat/Gran Fury/Fifth Avenue) that was not only perceived as being out of date…it WAS out of date, first appearing as the Dodge Aspen in 1976, itself an evolutionary design of the Dodge Dart.
In 1987, the remains of AMC were consolidated into the Eagle brand and the Premier sedan was unveiled. A mash-up of AMC, Renault, Mitsubishi and GM parts, the Premier came out to much fanfare but couldn’t come anywhere even remotely close to selling like the Taurus. Even with a badge-engineered twin, the Dodge Monaco, Chrysler had trouble off-loading the cars and instead used most of the underpinnings to develop the LH cars (Chrysler Concorde, Eagle Vision, Dodge Intrepid) that started Chrysler’s meteoric rise in popularity in the 1990s.
That is what competition does: it breeds improvement and eliminates total failures. Consolidation reduces competition, therefore leaving the buying public with whatever happens to be on the menu, good or not. Right now is the perfect time for FCA to strike in the US: GM is seen in dark light after the myriad of recalls they suffered last year, Ford is on a tear with their current surge of products, and if Marchionne needed any indication that there’s hope for the USDM market, the Hellcat twins should be the sign he needs- they can’t produce the engines fast enough to keep up with demand! Instead of riding that gravy train and adding models such as the Chrysler 300 SRT and the oft-proposed but never seen SRT Dart, Marchionne seems resolved that the only way forward is to pair off with another manufacturer. Did he really think that GM, Toyota or Ford would take that bait? I don’t know who he is really trying to appease (the Agnelli family comes to mind, mainly because they are pushing for industry consolidation as well) but lately it appears that Chrysler’s savior is starting to have a change of heart about the company he has been running. Delaying Chrysler and Ram products while desperately trying to shove Alfa Romeo into an upmarket role? If Ralph Gilles bolts from the company, start playing the funeral march.
Sergio, go to the nearest BMC/Leeland dealership and ask them how consolidation went! Manufactures already share air bags, look how that turned out. FCA is making compelling automobiles, give the people what they want and rake in the $. There is no way in hell American consumers will accept a badge engineered Ford or Chevy as a Dodge. That crap would fly in Europe, but the brand loyalty and disdain for badge engineering would doom any effort like that to failure here. Plus sharing too many parts ruins the individual character of the brand. BOP was never the same after the General corporatized the engines. Pontiac quit being Pontiac then as far as I’m concerned, it just didn’t feel the same. If FCA goes this way can some American companies please purchase the remnants when it collapses. Having a Chinese company make “American Motors” or a Indian Company make Jeep would be worse than a German company making Minis.
Ahem Mr Martin . Ye best be looking at the bottom lines of FCA . To be concise … the ONLY division of FCA making anything even resembling a profit is .. JEEP . The ONLY division selling at a reasonable pace is … JEEP .The only division making cars people actually want … is JEEP . With all the rest hanging on to JEEP’s coat tails for dear life as the ship lists over on its side on the way to Davey Jones Locker . And the simple fact is …. JEEP … isn’t big enough to hold on to much longer …
Damn ! Would you guys please take the time to READ the financials etc before going off uninformed and half cocked when it comes to automotive business news ? I mean … I get it … y’all don’t read Italian , Swiss and German … and y’all aint got relatives in CH banking to be giving you the inside line .. but damn … the info’s out there regardless … all ya gots ta do is …
R-E-A-D
Well .. read with a modicum of discernment that is
You really don’t have a clue, do you? Or maybe just ran out of meds? And maybe take your own advice about reading.
Sergio needs to focus on running FCA, not trying to merge with other manufacturers.
Read my lecture below son . There is no FCA left to run . Other than JEEP Marchionne has run the entire organization … Lock , Stock & Barrel … right into the ground . Thats why the little ___ is so damn desperate to merger/sell off FCA
I’ve said it since the day Stronzetto [ look it up [ Marchionne took over at FIAT SpA . Said it again when ObamaClaus GAVE the SOB Chrysler/JEEP . Been saying it ever since to the great criticism of many across the globe to the point of being banned/censored for my words ..
.. and yet … here we are … Marchionne’s Madness marching ever on .
But Bryan ? You’ve missed out on a major aspect of the events so far . Marchionne on the surface is calling for mergers . But behind the scenes Stronzetto is trying to dump wholesale Ferrari …. and ….. Chrysler sans JEEP [ he wants to keep JEEP ] on who ever’s dumb enough to bid on either . Ferrari bleeding money off like s stuck pig in a slaughter house … Chrysler [ sans JEEP ] would be doing the same … IF they had any money to bleed off
The real joke ? VW-Audi on multiple occasions over the years has offered to buy out all of FCA .. for a damn reasonable price I might add . With Stronzetto publicly spurring VW-Audi’s offers to the point of insult
Take my word on this one . If the Elkann’s don’t come to their senses damn ___ing fast and show Marchionne the door ASAP … the whole damn industry and especially the US industry will be dealing with the ramifications of Stronzetto’s intended actions for decades .
Cause guess what ? The Italian government has told Marchionne where to shove it .. the entire financial industry worldwide has refused his applications for IPO’s for Ferrari , FCA etc … no one will give him or FCA a dime … and the little ____ [ what Stronzetto means ].. is on the verge of sinking the entire damn FCA ship [ including Ferrari Maserati Alfa Romeo Chrysler Dodge JEEP ] in one fell swoop
So pray all ye Chrysler/JEEP faithful … pray all ye Italianophiles … pray to what ever god it is … great .. small or metal .. you kneel down before that the Elkann’s … seeing their entire inheritance on the verge of disappearing … do come to their senses and send Marchionne on his way . Cause if not … there’s gonna be hell to pay … across the entire global automotive industry … but especially here in the US .
Phew ! Lecture over . Free Coffee , Beer , Donuts and Pretzels in the lobby . Stranahans available for $7 a glass . $75 lb singe source coffee and cronuts for the Hipsters amongst us for a fee .. a damn high fee I might mention
Lord I hates Hipsters . The Yuppies [ with beards and flannel ] of the 2010’s
Seven years back when the merger happened, I have to admit that I was totally stunned. FIAT has been barely clinging to existence since about the 70s, and in many cases has been in the same financial straits as Chrysler. It just seemed like a terrible idea: Selling the penniless waif to another penniless waif and hoping for magical profits to fall from the sky. The short-term has been really interesting; they’ve cranked out some neat cars and engines, but I can’t help but feel like it’s one of those days where a dying man rallies and feels really well before the inevitable.
I really wouldn’t be sad at all if Mopar suddenly wasn’t around. I mean yeah the Hellcat is all the rage, and the SRT8 Jeeps are more common than F150’s around here. But other than the job loss we aren’t really loosing anything special.
Studebaker purchased Packard.
AMC purchased Hudson
Chrysler purchased AMC, Fiat purchased Chrysler
Chrysler purchased AMC, Dumbler Benz took over Chrysler, Cerberus picked up the broken pieces of what Dumbler didn’t destroy, and Fiat was “gifted” Chrysler when Wall St. thieves pulled the rug out from under all of the American middle class.
There, fixed that for yeah. 😉
a little tif bit of thought of home roots and a baker comes to mind from Colorado. Stude something’s going to happen