General BS and Laughs => General Mopar Discussions => Topic started by: 300rag on May 04, 2009, 06:47:42 PM

Title: What are they going to call it??????
Post by: 300rag on May 04, 2009, 06:47:42 PM
 and where is the HQ going to be??
MILAN (AP) - Fiat is trying to build a global automaking powerhouse out of parts scavenged from broken-down General Motors and Chrysler.
The Italian automaker struck a deal last week that could eventually give it a controlling interest in Chrysler, but its ambitions are bigger than that: Now it is negotiating to buy GM's main European unit, which includes the Opel and Vauxhall brands.
Fiat Group CEO Sergio Marchionne's grand plan is for Fiat to spin off the resulting automaker, which he said would be big enough to compete with the mightiest of car companies, with capacity to turn out some 5.5 million vehicles a year.
Fiat could become the fifth- or sixth-largest automaker in the world if it can complete its deals with Chrysler and GM, said Michael Robinet, vice president of global vehicle forecasts for CSM Worldwide, an industry consulting firm in Northville, Mich.
Currently, Fiat is considered a smaller, regional player, ranking 10th worldwide in cars and trucks produced.
Fiat's aim eventually is become the world's No. 2 automaker, behind Japan's Toyota, according to Germany's economics minister, who met with Marchionne on Monday in Berlin.
But there are lots of questions about whether Marchionne can pull it off.
The plan is audacious, not the least because Marchionne is hoping to execute it without putting down a cent. Fiat is hoping to take advantage of the crisis in the auto industry by obtaining billions in loan guarantees from the U.S., Canada and various European governments.
"We're in the middle of an automotive yard sale," Robinet said. Marchionne has "gone to a yard sale and picked up the really good stuff."
Fiat's deal to take a big piece of Chrysler could not only save Chrysler, it would give Fiat access to the huge North American market.
And by buying GM's main European operations, Fiat could cut its production and development costs through economies of scale and gain expertise in building midsize and larger cars. Fiat, the maker of Fiats, Alfa Romeos and Ferraris, specializes in small cars.
Marchionne made the rounds in Berlin on Monday, seeking to persuade German Chancellor Angela Merkel and her economics and finance ministers that Fiat can save many of the 25,000 jobs at Germany's Opel, not to mention its supplier network. GM employs some 54,000 in Europe, including at Sweden Saab and Britain's Vauxhall. It is not clear whether Saab would be part of a deal with Fiat.
Max Warburton, a Sanford C. Bernstein auto analyst, questioned whether a collection of loss-making auto companies can generate cash, noting that Fiat's auto business posts a profit only because of its Brazil operations. But the really big question is: Where will the capital come from for the new company?
Warburton suggested that Fiat will need to sell off its "jewel assets," CNH agricultural and construction vehicles and Iveco trucks. Marchionne has ruled that out.
In Germany, Economy Minister Karl-Theodor zu Guttenberg said Fiat estimated its short-term financing needs in Europe - stemming from GM's debts and pension obligations - at $6.6 billion to $9.3 billion, which could be covered by loan guarantees from various governments.
"Fiat wants to get into this deal without debts of its own," Guttenberg said.
GM, for its part, has been trying to find investors to help stave off collapse.
"We are talking to them, amongst other parties. Not solely Fiat, but several parties who have an interest in making investment in our European business," GM CEO Fritz Henderson said in an interview Monday with The Associated Press.
While analysts see advantages in a Fiat-Chrysler combination, there is much more skepticism among industry experts and unions in Italy and Germany about the wisdom of a play for Opel. German unions are worried about jobs, and sour about the $2 billion that Fiat walked away with when a previous partnership with GM was dissolved.
Asked what the plan might mean in terms of job losses or plant closings, Guttenberg said Marchionne "hasn't offered any specific numbers yet, but he described them as not being too dramatic."
In a note to investors, Warburton, the industry analyst, said an Opel deal "makes sense if it can be made to function."
"We remain unconvinced that Fiat has the management depth to pull off this very ambitious task," Warburton said, "although we acknowledge that the company clearly keeps its talent obscured."
But Adam Jonas, auto analyst with Morgan Stanley, said if anyone can pull off such a spectacular gambit, it is Marchionne. Jonas said Marchionne is known for putting in long hours and cultivating talented management teams.
Title: What are they going to call it??????
Post by: Stan Paralikis on May 05, 2009, 03:20:40 AM
William C. Durant all over again.  Only on an international scale.
Title: What are they going to call it??????
Post by: firedome on May 05, 2009, 04:33:38 AM
I dunno, it seems like over-reaching to me, these merger/consolidatios
rarely seem to work out, going all the way back to Nash-Hudson and more
sadly Studebaker-Packard. One exception was Chrysler-AMC in '88, and
that was only because they got Jeep.  Fiat does make good small
cars now, unlike in the old days, and VM Motori (part of Fiat) is one
of the great diesel makers in the world, but will Americans buy small
cars or diesels as long as gas is at $2.00-2.50?  Folks don't want
to hear it, but gas would need to be taxed up to $5.00 or more like in
other countries to finally force the technological and behavioral
changes necessary to move to more on to more advanced and efficient
transporation propulsion. It won't happen as long as gas is so cheap,
relative to Europe et al. It's no wonder they have far more efficient

That said, Fiat has done a darn good job with Case-New Holland since
they took them over, and my first love from the old farm days,
International Harvester (Case-IH) still makes dam good tractors... so
the fate of Chrysler need not necessarily be destined to be a bad one
under Fiat stewardship. And without them, there will certainly be no
Chrysler at all. 

Title: What are they going to call it??????
Post by: Jacques on May 05, 2009, 05:18:44 AM
Quote from: firedome
One exception was Chrysler-AMC in '88, and that was only because they got Jeep.
Dont forget that Chrysler also was very interested in the design staff of AMC, who somehow managed to put out new models with a very small budget. The management strategy has later on been applied to Chrysler design in the 90ies. First result was the Viper which went from concept to production in record time.
This said, from what I've read earlier, I still would like to see this guy from Fiat succeed, as at least he has some kind of vision.
Title: What are they going to call it??????
Post by: Dan Cluley on May 06, 2009, 02:10:30 AM
Since AMC lasted 30+ years, I'm not sure you can call it a complete failure.
What I wonder about is:
1.  If George Mason (head of Nash) hadn't died very shortly after the merger, would AMC have eventually included Stude/Packard (and what would have come of that)
2.  What would have happened to AMC if Romney hadn't left to become Governor of Michigan.  It is after he is gone that the company stops concentrating only on compacts, and goes back to a full line of car sizes.  Did this cause them to spread themselves too thin, rather than keeping their lock on the small car niche market?
Title: What are they going to call it??????
Post by: Stan Paralikis on May 06, 2009, 03:16:06 AM
Just read in Jalopnik that the Jeep Wrangler is on the short list of models to get the axe.