By on October 30, 2012
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Fans of HBO’s hit show The Wire will remember The New Day Co-Op, a coalition of Baltimore heroin dealers who band together in part to get better deals on their drug supply and remain strong against law enforcement and rival gangsters. Half a world a way, a similar proposal was floated by Fiat CEO Sergio Marchionne, but never came to pass.

A report by Bloomberg outlined Marchionne’s vision to take on Volkswagen. It involved PSA, Opel and lots of money.

Marchionne proposed that Peugeot commit to a combination between Fiat, the French carmaker and GM’s German Opel unit in exchange for stock in the new entity, said the people, who asked not to be named as the proposal was private. The CEO also offered to take Opel as part of the deal if he got $5 billion to $7 billion to restructure the unit, two of the people said.

A combination would have given the new entity more heft to compete with Volkswagen as the industry weathers the sovereign- debt crisis. Together, Fiat, Peugeot and Opel account for 25 percent of the region’s auto sales, topping VW’s 24.8 percent share.

The big reason for PSA’s hesitancy was the lack of technology brought to the table by Fiat, saddled with more exposure to countries like Spain and Italy. Apparently, partnering with GM is preferable. Who knew?

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21 Comments on “Marchionne Tries To Build The New Day Co-Op...”


  • avatar
    th009

    Why take Opel for free if you can get a $7B handout for accepting it?

    Fiat + PSA + Opel might have 25.4% market share (down from 28.8% two years ago) but that group would likely have more than 50% of the continent’s overcapacity and losses as well. Three sick men better than two?

    • 0 avatar

      Don’t know if 3 sick men are better than 2, but such a combination would have the Germans pretty scared…

      • 0 avatar
        th009

        A healthy combination like that, yes. But three disjoint companies with no integration, no immediate synergies, lots of idle factories, dropping market shares and bleeding money badly is not likely to strike fear into VW’s heart. That’s a long-term project to integrate them, and with the losses they are incurring, there might not be enough time for it.

        A combination like Hyundai-Kia-PSA or Nissan-Renault-Opel would worry VW a whole lot more, I think.

      • 0 avatar
        minneapolis_lakers

        Can you imagine the amount of layoffs and factory closings required to make this work?

        Scary, indeed.

        That’s why it’s dead on arrival.

      • 0 avatar
        28-Cars-Later

        I’m surprised they just don’t suggest/force Volkswagen deal with Opel. If there is one company in Europe who has the cash flow, capital, and know how to absorb the current mess of Opel and possibly turn it around, its them.

  • avatar
    stryker1

    Where is the re-up?

  • avatar
    philadlj

    “Flo’ ain’t recognize yo @$$.”

    Sorry, as a Baltimore native, I friggin’ loved that show.

  • avatar
    minneapolis_lakers

    Dude, awesome analogy.

    I wonder who are the automotive equivalents of Proposition Joe and more importantly, Marlo Stanfield :D

  • avatar
    dcars

    So why does GM have to pay Sergio and PSA does not? Or is he thinking hey I ripped the Americans off once before, maybe I can do it again! I hope GM didn’t take this seriously.

  • avatar
    Lampredi

    Marchionne himself denies it:

    “NO MERGER TALKS

    Marchionne, who unsuccessfully bid for General Motors’ (GM.N) European division Opel in 2009, said he had not discussed the business with GM since then. He also denied a report that he had proposed a three-way tie-up with GM and France’s PSA Peugeot Citroen (PEUP.PA) earlier this month.

    According to the anonymously sourced Bloomberg report, Marchionne had approached GM and PSA Peugeot Citroen, which are already pursuing an alliance in purchasing, logistics and future vehicle development.

    “I wasn’t the guy talking to Opel about anything … We haven’t had conversations since … 2009,” Marchionne said on a conference call with reporters and analysts when asked to comment on the report.”

    http://www.reuters.com/article/2012/10/30/us-fiat-earnings-idUSBRE89T1JV20121030

  • avatar
    Dimwit

    I can see Sergio taking Opel off of everyone’s hands … for a price and it would be a rather healthy one. I can’t see him getting into bed with GM. Where’s the juice for him to do so? For the most part GM is damaged goods, like a man drowning where you are not too sure of your chances in getting to shore. Adding his abilities to yours doesn’t help.

    PSA, with all the gov’t baggage is as bad or even worse since that gov’t is French. So you have to big, bad problems and a small attractive issue if you get a big enough bribe.

    Ain’t gonna happen.

  • avatar
    volt4obama

    Can we actually believe what Marichone says? First he fires all the U.S. Jeep workers and sends all those jobs to China. Then he has the nerve to deny it. Good thing we can count on the always accurate and honest Mitt Romney to tell us the truth.

  • avatar
    GS650G

    I wonder if Chrysler will remake their ads to show their cars driving around Beijing with Chinese pop music playing in the background?
    All those Mopar romantics can join with the SAAB faithful and talk about the good old days when their cars were symbols of where they came from instead of where they are built the cheapest.

  • avatar
    Bela Barenyi

    What I find more interesting than this is the news, that Fiat/Sergio more or less will neglect Lancia. The revised plan for future launches of the Fiat Group in EMEA (Europe/Middle-East/Africa)
    till 2016, shows only one “imported” Lancia (read: rebadged Chrysler)
    as the only planned launch of a new Lancia in 2014.

    Here’s the revised product plan:
    http://i.imgur.com/H4cmv.jpg


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