By on December 20, 2009

Do you see what I have done? (courtesy:The AP)

Almost exactly a month ago we asked:

Fiatsler is bringing Fiat back to the US as a one-model-brand (500) with a dedicated sales and support staff just to meet one of these government benchmarks… will they be crazy enough to build an engine in Michigan and ship them to Mexico to meet another?

The short answer: of course. Fiat gets five percent of Chrysler’s equity for building the engine in the states, but unless there are unrevealed US-market applications for an engine with 92 lb-ft of torque, they’ll all be shipped to Mexico and installed in Fiat 500s. According to Marchionne, half of the Toluca, Mexico Fiat 500 production will be sold in the US with the other half going to Brazil. For a guy who regularly bemoans the poor strategic positioning of Fiat’s factory sites, Marchionne is surprisingly willing to bend a few principles for five percent of Chrysler’s equity. Will it work? Sergio is still asking for time, telling reporters “by the end of 2011 and in early 2012, you should be able to tell how our plan is working.”

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8 Comments on “Marchionne: Equity Beats Strategy...”

  • avatar

    Of course it won’t work.  Everyone knows it won’t work. This is a smokescreen to buy time to find a good buyer for Dodge trucks,  jeeps and minivans.  The 500 is going to make the smart car look like a sales leader by comparison. The only question is who will get the blame when this all fails….Obama? The old guard at Chrysler? The american buyer for not picking up on the superiority of an Italian car built in Mexico with a Japanese/Korean engine built in Michigan?

    • 0 avatar

      I totally disagree.  The 500 will be a success in the US, and should be thought of as a cut price Mini.  There is a large under served market for fun  small stylish cars.  The real question is how much of that market the Ford Fiesta will take – it represents the real threat to the 500 in the US.

      The smart is not a comparable, its real virtue is in city driving & parking, a specialization that has little value outside of dense cities.

  • avatar

    The Italians are very smart people and so far they have been able to out smart the clueless Americans to giving a FREE COMPANY for smoke and mirrors which many dumb American will eat . Italians are the smartest people in the world and can build a better car then Americans? 

    • 0 avatar
      Via Nocturna

      I think you need some tips on this whole trolling thing, dan.
      To maximize the annoyance you cause, you should spam every post regardless of whether it has anything to do with Chrysler or not, as it’s plainly obvious you never have anything substantive to contribute anyway. This way, you can speed up your getting banned and save us all the breathless anticipation.

    • 0 avatar

      Another tired tirade from someone who seems to wish misery upon others. Are we perhaps a fired/laid-off Chrysler worker Dan?

  • avatar

    If there’s anyone left to ask.

  • avatar

    In reply to DAN
    Yes, the Chrysler/Fiat deal was a product of smoke and mirrors, but I don’t think the Americans were dumb.  PTFOA has always known that Chrysler was/is a basket case.  The smoke and mirrors were designed to hide an economic life support system that was/is designed to last long enough so that the economy can better absorb the Chrysler collapse.  It was also a bit of political cover, because the party in power would have been dead in Chrysler towns if no effort was made to save the company.
    The pretense of the Chrysler/Fiat reorganization will be lucky to last past the first quarter of 2010.   GM will get most of the salvagable bits of Chrysler.  Fiat will get some form of a distribution deal as a consolation gift.

  • avatar

    It’s truly a sad day when a new engine plant in the US building a modern, fuel efficient  and hybridizeable  four cylinder power plant suitable for export is slated to come on-line.  When will this country reclaim its roots and go back to building products completely irrelevant and unsaleable outside of the domestic market?

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