By on July 14, 2011

When Fiat and the US government collaborated to bail out and restructure Chrysler, many hailed the news as nothing less than the rescue of the American auto industry. Though Fiat CEO Sergio Marchionne became CEO of the Auburn Hills-based automaker, he maintained much of its management corps on the strength of brief interviews, only relieving a few key members of the old guard. But the debate over whether the rapidly-aligning Fiat-Chrysler is more Fiat or Chrysler is going to be resolved “pretty quickly” according to Marchionne, as Bloomberg reports that a unified management structure is in the works.

Marchionne is working on management changes as he steps up the integration of the two companies. He plans to merge the carmakers to reduce costs and achieve a target of more than 100 billion euros ($140 billion) in combined revenue by 2014. The executive said in May that the timing of a merger hasn’t been decided yet, adding that a combination isn’t likely this year.

But just as there was furor in Italy when Marchionne suggested that the unified Fiat-Chrysler could be headquartered in Detroit, the unified management structure could be yet another source of controversy. It will, after all, be the most direct signal yet as to whether Fiat-Chrysler is an Italian firm with global operations, an Italian-American alliance or a truly global firm. For one thing, unified management should force Marchionne to commit to a single headquarters for the group, reviving a controversy he temporarily cooled by fatuously suggesting there be four Fiat-Chrysler “headquarters,” in Turin, Detroit, Brasil and “Asia.” Having masterfully finessed the PR messaging transition from “rescue of an American automaker” to “wholly owned subsidiary” thus far, a unified management could bring up a lot of unresolved issues. In short, it’s a branding challenge that makes the Chrysler-Lancia transformation look like child’s play…

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8 Comments on “Fiat And Chrysler To Make It Official, Unified Management Coming “Soon”...”


  • avatar
    Educator(of teachers)Dan

    As always I watch Chrysler with an interested eye because there’s always something going on over there. So far the changes have been for the better, lets see if that trend continues.

  • avatar
    philadlj

    Meanwhile, Fiat Journeys…I mean, Freemonts are apparently proving quite popular in Italy!

  • avatar
    highdesertcat

    We are watching the end of the beginning. What follows next will be genuinely Fiat. And if they can make money out of this loser, more power to them.

    Let’s see just exactly how much input the UAW has in the management decisions made in Italy. Let’s see if the UAW is going to strike or negotiate their Chrysler jobs away to Brazil and other places where Fiat wants to expand.

    But judging from the news today, this development has led some UAW workers to drinking on the job, again. And they said that it was the exception, not the rule…………

    • 0 avatar
      windswords

      No. This is not an assimilation Borg style of Chrysler by Fiat, but a true merging of the companies unlike anything Daimler could have contemplated. Chrysler will have engineering, design, manufacturing responsibilities as will Fiat. You seem to think that whoever owns the most stock becomes the master and all identity is lost. But look at Renault and Nissan. Nissan has not lost its identity to Renault.

      • 0 avatar
        highdesertcat

        I was under the impression that both Renault and Nissan were failed companies at the time of the merger. I know for a fact that both Renault and Nissan were in dire financial straits well before the merger.

        The case with Fiat and what was Chrysler at one time, is a little different. Chrysler was a failed company. Nobody wanted it. The US government paid out a lot of money and made a lot of promises to Fiat if they would only take this Chrysler corpse off their hands. Fiat held up their part of the bargain on the condition that Fiat would call all the shots when they became majority-owner, which was specifically guaranteed by the US government.

        If that was the wrong conclusion to make, blame the coverage of the US auto industry and the bailed out US auto makers by the media. I remember interesting discussions on this subject right here on ttac.

        And now that we’ve arrived at that point, is it likely that Fiat will allow their Chrysler subdivision to run its own destiny and responsibilities when they failed miserably precisely because they were unable to run and manage things for themselves when they were whole?

        What would Fiat gain by a true and equal merging of a failed company (Chrysler) with their own profitable, going concern? Your post creates more questions than it answers.

  • avatar
    Fusion

    Fiat cars had 35 billion Euros of revenue in 2010, Chrysler about 29 billion. So, unless they want to grow by ~60% in the next 3 years, I’d guess their “100 billion Euro” number does include Fiat industrial?

    But didn’t the demerger essentially mean the end of a single “Fiat group”? I thought Fiat Industrial is now a completely seperate company from Fiat S.P.A., though they are owned by mostly the same shareholders and the CEO of one company is the chairman of the other…yet, just adding up the revenues and pretending to be “one” doesn’t really seem right to me…

  • avatar
    windswords

    What’s interesting about the chart is that Doug Betts the VP of Quality is the first one listed after Sergio and the chairman. This is not an accident. Usually it’s the COO or CFO that is the first one listed after the CEO/Chairman. If you look at his history you will find that Betts worked at Buick back in the day when they were one of the few companies that had a reputation for quality and reliability. Then he worked for Toyota (back when they were good) and for Nissan. His position near the top of the chart is Sergio’s way of making a point about improving quality for Chrysler. The improvements we’ve seen are not the end but the beginning.


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