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I'm not a fan of the Alfa cars either, but if this leads to a type of "Smart Car" like Mercedes brought to the US, it can only help!alexbarwell wrote:Always thought Alfas were ugly - the one above has some sleek lines but looks like it has a hangover. Give it a year or so and earn yourself some real kudos by trying to get the electrics working. New fiats delivered to local genuine fiat dealer are so badly built/finished, some are unfit to drive, need resprays, trim to sort and a long list of other stuff. They also do volvos - they just need a wipe down. Not a big fan of chrysler, but the crosseye, er, crossfire looks quite neat, just not so good underneath. Anyway, I thought the laughable state of the italian economy was due to financing don berlusconi and fiat in equal measure...
Hey! Don't shoot the messenger!xpensive wrote:So what you are saying is that the people that went off the road will stay at the wheel? That's the spirit, give them another go with some fresh money!
...and another case of booze...xpensive wrote:So what you are saying is that the people that went off the road will stay at the wheel? That's the spirit, give them another go with some fresh money!
http://www.wheels.ca/article/532022It's a clever deal Sergio Marchionne is trying to pull off with his "rescue" bid for Chrysler LLC.
The CEO of Fiat SPA has the backing of U.S. President Barack Obama in Fiat's proposal to take a 20 per cent stake in the 84-year-old legacy of Walter Percy Chrysler. After raising Fiat itself from the dead earlier this decade, Marchionne is widely seen as Chrysler's best bet to avoid liquidation.
Chrysler has until May 1, less than three weeks away, to cut a deal with Fiat that meets White House approval for $6 billion (U.S.) in federal bailout money.
But in the guise of a turnaround artist, Marchionne is in fact offering Fiat only as a glorified supplier to Chrysler, not its rescuing angel.
"I absolutely will not run" Chrysler, Marchionne declares. Fiat is to provide its small-car technology to Chrysler to fill a gap in a Chrysler product line dominated by gas-guzzling SUVs, pickup trucks and minivans.
And that's it. Chrysler does not get Marchionne, but will continue to be run by the team that drove it into the ditch. It gets no cash from Fiat, nor will Fiat assume any of Chrysler's debt. Fiat gets a North American foothold for its brands with access to Chrysler's plants and dealerships, entirely on Uncle Sam's dime. And at no cost Fiat gets that 20 per cent equity kicker, currently worthless but an upside reward if Chrysler does someday become valuable.
The small-car engines and transmissions for a new lineup of Chrysler minicars, Fiat's sole contribution to the proposed deal, is off-the-shelf – the same technology Fiat uses in some three dozen alliances to gain cheap access to emerging markets in Russia, China, India, Poland, Turkey, Serbia and elsewhere.
Marchionne is not a "car guy." Born in Chieti in central Italy, he has spent most of his adult life – 27 years, beginning at age 14 – in Canada, where his father, upon retirement as a police officer, decided to emigrate. Marchionne put his University of Toronto and Osgoode law degrees to work in accounting and finance jobs at Ontario packaging and auto-parts-distribution firms.
After brief CEO tenures at a Swiss chemical firm and a product-testing company partly owned by Fiat's controlling Agnelli family, Marchionne was recruited in 2004 to run Italy's biggest industrial concern. The Agnelli family was in upheaval, its long-time patriarch, Gianni Agnelli having just passed away, to be followed soon by Agnelli's brother, leaving no family successor.
Turin-based Fiat was a mess, an industrial conglomerate that happened to include in its portfolio the 110-year-old vehicle maker cofounded in 1899 by Giovanni Agnelli as Fabricca Italiana Automobili Torino.
Auto analysts marvel at the speed with which Marchionne was able to turn accumulated Fiat losses of more than $4 billion over the previous five years into a profit in his second full year on the job. Profits peaked at $2.2 billion last year, a stunning turnaround, to be sure.
But, alas, neither a difficult nor unblemished one.
Marchionne simply unwound much of the Agnelli empire, dumping insurance, banking, real estate and other non-auto distractions. He persuaded GM to pay $2 billion to break its 2000 commitment to buy Fiat's auto division, and used the proceeds to refresh Fiat's stale vehicle lineup. And Marchionne boosted volume with all those "strategic alliances." Such remedies are known in business as "the low-hanging fruit."
What Marchionne didn't do was take on Italy's fractious unions by daring to shutter excess capacity. Neither is he a fierce cost-cutter. Marchionne acknowledges that Fiat's debt has inexplicably "ballooned" to more than $7 billion in the past year.
The glow has come off Marchionne as a turnaround genius. He vows Fiat will make money again this year, albeit much less than 2008. But Fiat's debt was recently knocked down to "junk" status by Standard & Poor's, which cited deteriorating financial conditions. Fiat itself is in line for bailout money from Rome. Investors have deserted the firm, driving its shares down 71 per cent from the 2007 peak, erasing $24 billion in shareholder value.
Marchionne, even in the midst of complicated negotiations over Chrysler, vows to make still more deals. He was recently unconvincing in brushing away questions over his rumoured ambitions to hook up with PSA Peugeot Citroen SA. A dealmaker focused on the next deal before the current one has gelled usually is not someone to invest alongside of.
Cross-cultural alliances are typically ill-fated. Think Renault SA and the late American Motors Corp. BMW and Britain's Rover Group. Fiat and GM. Daimler-Benz and Chrysler and Mitsubishi Motors Corp.
Renault SA and Fiat long ago abandoned the North American market, a quarter-century ago in Fiat's case.
"Don't be so sure that Americans would leap to buy Fiat-inspired cars," Forbes car-industry curmudgeon Jerry Flint writes. "They never have."
It's a peculiarity of North American motorists that they embrace anything German – Volkswagen, Audi, Mercedes, BMW – and have traditionally rejected French and Italian makes.
There's no shortage of competition in small cars, the anticipated salvation of a Chrysler-dominated by gas-guzzling truck-based vehicles. North American consumers already have their choice of Suzuki, Izuzu, Subaru and Kia minicars, plus Daimler's Smart Car, BMW's retro Mini, and new subcompacts from most major automakers. Rivalry in small cars – with their low margins and need for high volumes to compensate – is about to intensify with dozens of Indian and Chinese automakers poised to crack the North American market.
Obama hopes to save union jobs at Chrysler, even though Chrysler's non-union plant in Tocula, Mexico would be the likely assembly plant for many of the Fiat-branded models Marchionne wants to bring across the ocean. The Chrysler subsidizers in Ottawa and Queen's Park won't be pleased to know of Fiat's scant regard for Chrysler's Brampton plant, whose output of sedans and muscle cars has been a showroom dud.
What's unfolding here is a complicated solution to a relatively simple problem. Fiat's small-car lineup will have to be re-engineered to meet stricter North American safety requirements. Chrysler's plants will have to be retooled, and its workforce retrained. That's a three- to four-year process. As long as that is to be done with the largesse of Washington, Ottawa and Ontario, why not let Chrysler itself spend its bailout money developing a lineup of small, eco-friendly cars of its own, engineered and built by Americans and Canadians?
Either that or let Chrysler go into liquidation, auctioning off its valuable minivan and Jeep franchises.
We don't ask heart surgeons to develop a second expertise in landscape architecture. There's no reason North America's leading minivan maker needs to find a space for itself in the crowded subcompact market.
After all, it is the mid-20th-century drive by the Detroit Three to be all things to all motorists that has ultimately led to its downfall.
Doesn't matter what they filed for, they still got money they didn't deserve, nor money that was legal to create from nothing and give to the unworthy. People have to know they either succeed or fail. There is no middle ground. It has cost us as a nation more money, blood, sweat, and tears to give these inept business leaders illegal money than it would have to let them go tits up. Simple as that. Why is it that Mom and Pop chains can go out of business and corporations that are woefully inefficient can't? Because they aren't lining the pockets of the elite politicians to lobby them to cut them breaks and allow them to break the law. If the government would tell them to pound sand they wouldn't be like this.Ciro Pabón wrote:They filed for bankruptcy protection, Ray. The money they received has been used to keep the company afloat while they make a plan. The board is changing, xpensive.
http://www.nytimes.com/2009/05/01/busin ... to.html?hp