The Truth About Cars » Consolidation http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Tue, 01 Sep 2015 18:20:13 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.4 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars » Consolidation http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/consolidation/ The Biggest Car Interior Makers Are Now Companies We’ve Never Heard Of http://www.thetruthaboutcars.com/2015/08/biggest-car-interior-makers-now-companies-weve-never-heard/ http://www.thetruthaboutcars.com/2015/08/biggest-car-interior-makers-now-companies-weve-never-heard/#comments Mon, 31 Aug 2015 17:30:55 +0000 http://www.thetruthaboutcars.com/?p=1157170 On Monday, Magna International completed its sale of its interior business to Grupo Antolin, a Spanish firm that’s relatively unknown outside of Spain. That’s on top of Johnson Control International getting out of the interior business, along with other automakers and suppliers, as John McElroy pointed out in a well-written column for Autoblog. Magna’s sale underscores […]

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magnastronach Picture courtesy deadlysins.info

On Monday, Magna International completed its sale of its interior business to Grupo Antolin, a Spanish firm that’s relatively unknown outside of Spain.

That’s on top of Johnson Control International getting out of the interior business, along with other automakers and suppliers, as John McElroy pointed out in a well-written column for Autoblog.

Magna’s sale underscores the fact that the car-making business — and especially their interiors — isn’t exactly lucrative for most suppliers.

For what it’s worth, the sale helps reduce Magna’s exposure to a recently volatile Canadian currency, but long-term, Magna didn’t see margins improving on interiors and got out.

Instead, Magna’s looking at transmissions and other automotive parts — like other suppliers — as a better source of revenue and margins for a healthier bottom line.

(His concern is shared by Sergio Marchionne, who has a few ideas about consolidation.)

Like McElroy points out, the large players in the interior business, now Grupo Antolin and Yanfeng, are relative unknowns in a business where sales are brisk and cheaper is always better.

In short, hold on to your door handles.

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Marchionne Calls For GM Takeover Just Short of Hostile http://www.thetruthaboutcars.com/2015/08/marchionne-calls-for-gm-takeover-just-short-of-hostile/ http://www.thetruthaboutcars.com/2015/08/marchionne-calls-for-gm-takeover-just-short-of-hostile/#comments Sun, 30 Aug 2015 22:59:05 +0000 http://www.thetruthaboutcars.com/?p=1156418 We have to hand it to Larry P. Vellequette at Automotive News for getting FCA’s Don Marchionne riled up. In addition to getting Sergio talking yesterday about automakers having a history of bending the unions over, the outspoken executive has now called for a General Motors takeover via a series of hugs increasing in their intensity each time. […]

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Sergio and 1.4L Turbo MultiAir in better times at Dundee. Chrysler Photo

We have to hand it to Larry P. Vellequette at Automotive News for getting FCA’s Don Marchionne riled up. In addition to getting Sergio talking yesterday about automakers having a history of bending the unions over, the outspoken executive has now called for a General Motors takeover via a series of hugs increasing in their intensity each time.

“There are varying degrees of hugs. I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you,” said Marchionne to Vellequette. “Everything starts with physical contact. Then it can degrade, but it starts with physical contact.”

And no, that’s not even the best part.

Marchionne asserts he and the board of directors have no choice but to pursue General Motors based on the numbers.

“We’re not talking about marginal improvement in margins,” Marchionne said, “we’re talking about cataclysmic changes in performance, just huge.”

And how sweet is that EBITDA figure?

“Look, the combined entity can make $30 billion a year in cash. Thirty. Just think about that fucking number. In steady-state environments, it’ll make me $28 to $30 billion.”

Yet, General Motors refuses to look at the numbers, with GM CEO Mary Barra stating in June that GM is busy “merging with ourselves.”

The relatively short piece from Automotive News is filled with that will likely become a Greatest Hits album for both Vellequette and Marchionne with lines like:

“It would be unconscionable not to force a partner,” he said

“I’ve offered to sit down with them and take them through the numbers,” said the Italian-Canadian CEO as he sipped an espresso and swiped through documents on his tablet, giving his visitors a cursory look at various charts and graphs he says make his case.

“They won’t listen. And that kind of abject refusal to engage … the capital markets won’t understand why you are rejecting the discussion.

“You may reject the deal but you can’t reject the discussion. If you’re refusing to talk to me, and you have seen nothing, you either think you’re above it all, or you think the capital markets are full of schmucks that owe you something.”

“There have been responses of people who have shown interest in discussing,” he said. “Are they the people I wanted to get the response from? The answer is probably not. There are people who are interested in doing deals. I’m not interested in doing deals with them … because there’s a better deal.”

“Why,” asked a high-ranking GM executive, “should [GM] bail out FCA?”

Asked directly, a GM spokesman wouldn’t call Marchionne’s analysis wrong but said GM officials believe the company and its shareholders are better off on their own.

Last emphasis mine.

If GM officials think that shareholders want anything other than increased profits, those officials are going to be in for a rude awakening — when they’re out of jobs after the dust has settled.

Everyone, especially a shareholder, has a price.

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Lutz: GM-Chrysler Merger Makes Sense http://www.thetruthaboutcars.com/2015/08/lutz-gm-chrysler-merger-makes-sense/ http://www.thetruthaboutcars.com/2015/08/lutz-gm-chrysler-merger-makes-sense/#comments Wed, 05 Aug 2015 18:00:56 +0000 http://www.thetruthaboutcars.com/?p=1134001 My goodness, when isn’t former General Motors exec Bob Lutz just the best? The former GM chief recently appeared on an Automotive News panel and boy that guy has vision and the rest of us have bifocals. Car and Driver correctly points out that Lutz makes good points regarding a merger between GM and Chrysler, but […]

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Bob Lutz  Picture courtesy dailytech.com

My goodness, when isn’t former General Motors exec Bob Lutz just the best? The former GM chief recently appeared on an Automotive News panel and boy that guy has vision and the rest of us have bifocals.

Car and Driver correctly points out that Lutz makes good points regarding a merger between GM and Chrysler, but the sage’s wisdom doesn’t stop at the following quote:

“The knowledge that one is to be hanged in the morning focuses the mind wonderfully.”

Lutz, alongside TrueCar President John Krafcik, former BorgWarner CEO Tim Manganello, Aston Martin CEO Andy Palmer, among others, waxed philosophical on the car business and its apparently shrinking economy of scale.

Lutz said GM tried to buy Chrysler twice and that it would have made sense for the automakers: their headquarters are close, and there were efficiencies in their powertrains, i.e. Hummer and Jeep.

“I was always in favor of GM acquiring Chrysler and I honestly think it would deserve a serious look now. You would get synergies … which would be massive,” he told the panel.

And “Maximum Bob” being “Maximum Bob”:

“We look at DaimlerChrysler as having been a failed merger. Well, it wasn’t failed for the Chrysler shareholders. At the time of the merger, the Chrysler shareholders realized an enormous gain.

“The subsequent execution was flawed in that Daimler never stepped in. Everybody kept doing their own architecture, and you had the hubris as part of the Mercedes [side] that said, ‘We will never use a Chrysler engine.’ I have news for you: Our four-cam V-6 engine 3.2-liter was every bit as good as the equivalent Mercedes-Benz.”

And then cynical, coal-powered Bob:

“I don’t know if anybody noticed, but full-size sport-utilities used to be — just a few years ago used to be $42,000, all in, fully equipped. You can’t touch a Chevy Tahoe for under about $65 (thousand) now. Yukons are in the $70 (thousands). The Escalade comfortably hits $100 (thousand). (Eds Note: It gets comfortably close.) Three or four years ago they were about $60,000. What this is, is companies trying to recover what they’re losing at the other end with what I call compliance vehicles, which are Chevy Volts, Bolts, plug-in Cadillacs and fuel cell vehicles.”

Don’t you dare change, Bob.

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Spyker Emerges from Bankruptcy Charged with Enthusiasm http://www.thetruthaboutcars.com/2015/08/spyker-emerges-from-bankruptcy-charged-with-enthusiasm/ http://www.thetruthaboutcars.com/2015/08/spyker-emerges-from-bankruptcy-charged-with-enthusiasm/#comments Sat, 01 Aug 2015 18:00:20 +0000 http://www.thetruthaboutcars.com/?p=1131465 Spyker — the former Saab owner, F1 contender, and builder of aircraft-inspired supercars — has emerged from moratorium and plans to merge with Portland, Oregon electric aircraft manufacturer Volta Volare, said the company in a release on Thursday. As part of Spyker’s future plans, electrification seems to be the common theme, whether it be for […]

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Spyker C12 Zagato (courtesy zcars.com.au)

Spyker — the former Saab owner, F1 contender, and builder of aircraft-inspired supercars — has emerged from moratorium and plans to merge with Portland, Oregon electric aircraft manufacturer Volta Volare, said the company in a release on Thursday.

As part of Spyker’s future plans, electrification seems to be the common theme, whether it be for airplanes or automobiles. Now silver-tongued Skyper CEO, Victor Muller, only needs to find an electric train company to complete the set for a modern movie remake.

In a statement posted on the Spyker website, Muller stated:

After winning a long legal battle with just one creditor, we have now finally succeeded in exiting moratorium and we are back in business as a healthy, debt free enterprise. In the coming weeks we will finalize the agreements with investors which were held up for over two month by the protracted litigation. But true to our logo “nulla tenaci invia est via” (for the tenacious no road is impassable) we have persevered and we can now move on and pursue our ambitious goals including the merger with Portland, Oregon based electric aircraft manufacturer Volta Volare.

In summary, Spyker is back with a vengeance and we look forward to a bright future for the company I founded 15 years ago and which is now set to build sensationally elegant and classy (electric) motorcars and electric planes for decades to come.

Spyker’s new partner, Volta Volare, has one aircraft — the GT4 — that was announced in 2012 with test flights to start that spring. However, we have been unable to verify if any test flights ever took place.

While the news seems rosy at first, I doubt this is the last we will hear of Spyker’s woes.

 

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GM to Develop Global Car with China-based SAIC Motors http://www.thetruthaboutcars.com/2015/07/gm-develop-global-car-china-based-saic-motors/ http://www.thetruthaboutcars.com/2015/07/gm-develop-global-car-china-based-saic-motors/#comments Tue, 28 Jul 2015 15:00:53 +0000 http://www.thetruthaboutcars.com/?p=1126489 General Motors will invest $5 billion to build a global line of cars with Shanghai-based SAIC Motors that will be sold in Brazil, China and other emerging markets, the automaker announced Tuesday. The cars won’t be sold in the United States, according to the statement. The global vehicles will go on sale starting in 2019 and the automaker […]

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General Motors will invest $5 billion to build a global line of cars with Shanghai-based SAIC Motors that will be sold in Brazil, China and other emerging markets, the automaker announced Tuesday.

The cars won’t be sold in the United States, according to the statement.

The global vehicles will go on sale starting in 2019 and the automaker expects the line to eventually produce roughly 2 million cars annually.

GM said the new global architecture would replace several existing models, but didn’t specify what those outgoing models would be. The vehicles would be manufactured in China, Brazil, Mexico and India and exported to other countries. GM said they expect to source many of the car’s components from local suppliers.

“With a significant majority of anticipated automotive industry growth in 2015 to 2030 outside of mature markets, Chevrolet is taking steps to capitalize on that growth,” General Motors President Dan Ammann said in the statement . “Strengthening Chevrolet’s position through this major investment is consistent with our global strategy to ensure long-term profitable growth in the markets where we operate.”

In February, SAIC and General Motors (through its Shanghai General Motors Wuling joint venture business) opened a plant in Indonesia to build SAIC-branded cars. SAIC also owns British car company MG.

The GM-SAIC partnership has an interesting history, especially in India.

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Magna Completes $1.9B Acquisition of Transmission-maker Getrag http://www.thetruthaboutcars.com/2015/07/magna-completes-1-9b-acquisition-transmission-maker-getrag/ http://www.thetruthaboutcars.com/2015/07/magna-completes-1-9b-acquisition-transmission-maker-getrag/#comments Fri, 17 Jul 2015 17:05:01 +0000 http://www.thetruthaboutcars.com/?p=1118633 Supplier and sometimes-assembler Magna International will buy German transmission-maker Getrag for roughly $1.9 billion, the Detroit News is reporting. The deal would firmly plant Canadian-based Magna International as the world’s second-largest parts supplier behind Robert Bosch GmbH and ahead of ZF, which recently purchased TRW Automotive for $12.4 billion earlier this year. “The trend among the […]

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Getrag

Supplier and sometimes-assembler Magna International will buy German transmission-maker Getrag for roughly $1.9 billion, the Detroit News is reporting.

The deal would firmly plant Canadian-based Magna International as the world’s second-largest parts supplier behind Robert Bosch GmbH and ahead of ZF, which recently purchased TRW Automotive for $12.4 billion earlier this year.

“The trend among the suppliers is that we now have to be bigger as the auto makers go to us to do more for them,” Magna Chief Executive Don Walker told the Wall Street Journal on Thursday.

Magna is well-known for their Austrian subsidiary, Manga Steyr, which assembles cars for BMW including X5 and 5-Series, and will produce vehicles for Jaguar Land Rover.

Getrag produces transmissions for Ford, BMW, Renault, Volvo and Daimler. In addition to its significant contracts with those automakers, Getrag has a substantial business footprint in China that Magna needed, according to the Detroit News. In addition to being the largest automotive market in the world, China is the fastest growing market for dual-clutch transmissions, which Getrag produces.

The acquisition is the latest in a flurry of auto-supplier mergers and purchases. It’s the sixth major deal this year for auto parts suppliers.

Getrag produces about 4 million transmissions annually and employs about 13,500 people in Europe, Asia and North America. Magna generated about $36.3 billion in sales last year and employs around 133,000 people in 29 countries.

Walker told the Detroit News that the company would consider more acquisitions in the near future.

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Ferrari Filing ‘Days Away’ Says FCA Boss Marchionne http://www.thetruthaboutcars.com/2015/07/ferrari-filing-days-away-says-fiat-chrysler-boss-marchionne/ http://www.thetruthaboutcars.com/2015/07/ferrari-filing-days-away-says-fiat-chrysler-boss-marchionne/#comments Sat, 11 Jul 2015 15:00:42 +0000 http://www.thetruthaboutcars.com/?p=1113401 Speaking to reporters in Toronto on Friday, Fiat Chrysler Automobile chief Sergio Marchionne said the official filing to spin off Ferrari could happen within the next few days. “We are days away from filing the prospectus,” Marchionne said, according to the Detroit News. The future standalone supercar maker will make available 10 percent of the company through […]

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sergio-marchionne

Speaking to reporters in Toronto on Friday, Fiat Chrysler Automobile chief Sergio Marchionne said the official filing to spin off Ferrari could happen within the next few days.

“We are days away from filing the prospectus,” Marchionne said, according to the Detroit News.

The future standalone supercar maker will make available 10 percent of the company through its initial public offering, which is widely expected in October. The remainder of the company will be held by Fiat investors and Enzo Ferrari’s son, Piero Lardi Ferrari, who is vice chairman of the company.

The move to spin off Ferrari is part of a larger plan to reinvest $61 billion back into FCA to fund future development for its range of vehicles.

Last week, Marchionne said Ferrari could be worth about $11 billion, or around 60 percent of FCA’s current market cap value. Analysts predicted the Maranello-based car maker would be worth roughly half Marchionne’s estimate. Despite building around 7,000 cars a year, Ferrari generates considerable profits for parent-company FCA.

Marchionne also denied that FCA would make a hostile bid to takeover General Motors in an effort to consolidate costs and boost profits. Marchionne has been looking for a partner — particularly GM — to offset rising investment costs.

“There are other, less optimal combinations,” he said.

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Jeep Points to Map of India, Says Let’s Print More Money Here http://www.thetruthaboutcars.com/2015/07/jeep-points-to-map-of-india-says-lets-print-more-money-here/ http://www.thetruthaboutcars.com/2015/07/jeep-points-to-map-of-india-says-lets-print-more-money-here/#comments Wed, 01 Jul 2015 19:00:11 +0000 http://www.thetruthaboutcars.com/?p=1104881 More and more automakers are looking at exotic locales to produce their wares (us Canadians can consider Mexico exotic thanks to its ice-free beaches) as they expand their brands and explore in-roads to untapped markets. For Jeep, that means investing in a shared money-printing press with an unlikely partner: Tata, the parent company of Land Rover. FCA […]

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2015 Jeep Renegade

More and more automakers are looking at exotic locales to produce their wares (us Canadians can consider Mexico exotic thanks to its ice-free beaches) as they expand their brands and explore in-roads to untapped markets.

For Jeep, that means investing in a shared money-printing press with an unlikely partner: Tata, the parent company of Land Rover. FCA will put $280 million USD into joint venture Fiat India Automobiles Private Limited which, since 2007, has solely produced Fiat models.

The investment will “support the production of a new Jeep vehicle and is expected to begin production in the second quarter of 2017,” according to statement released today by FCA. Jeep did not give further details on the new model.

With Sergio Marchionne’s hunger for consolidation, this could be seen as a sign of interest in a more formal arrangement between FCA and India’s Tata, especially when you consider the FCA executive’s desire for a Range Rover-esque model.

“We are pleased that this investment will strengthen FCA presence in India and are confident in the ability of the joint venture to produce world class products like those carrying the legendary Jeep nameplate,” Marchionne said.

This announcement is part of a wider expansion by Jeep into new markets. From The Detroit News:

FCA plans to produce 1.9 million Jeeps by 2018 at 10 plants in six countries: the U.S., Italy, China, Brazil, India and one other yet-to-be-announced country. Two years ago, only 798,000 rolled out of four plants in the United States.

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Marchionne Not Yet Ready For GM, Fields Not Interested In Any Merger http://www.thetruthaboutcars.com/2015/06/marchionne-not-yet-ready-for-gm-fields-not-interested-in-any-merger/ http://www.thetruthaboutcars.com/2015/06/marchionne-not-yet-ready-for-gm-fields-not-interested-in-any-merger/#comments Fri, 26 Jun 2015 20:00:09 +0000 http://www.thetruthaboutcars.com/?p=1100777 FCA CEO Sergio Marchionne says he’s not ready to court General Motors’ shareholders for a merger, while Ford’s Mark Fields prefers no mergers at all. Though Marchionne was said to be gathering allies in the finance field to help persuade GM’s investors to consider consolidation — having been rebuffed already by CEO Mary Barra — […]

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Fiat 500 At Tuscany Wedding Circa April 2014

FCA CEO Sergio Marchionne says he’s not ready to court General Motors’ shareholders for a merger, while Ford’s Mark Fields prefers no mergers at all.

Though Marchionne was said to be gathering allies in the finance field to help persuade GM’s investors to consider consolidation — having been rebuffed already by CEO Mary BarraReuters says he stated the following while on the sidelines at Wednesday’s unveiling of the Alfa Romeo Guilia:

We are very far removed from any of those scenarios today. None of my staff has spoken to them, I haven’t spoken to them, nobody is under instruction to speak to them.

When asked about the possibility of going hostile in his ongoing need for industry consolidation, Marchionne’s reply was to proclaim those who “kept wasting capital” were the ones meting out the hostility.

One such individual would likely be Fields. Per The Detroit Bureau, the Ford CEO told reporters attending the annual Further With Ford conference mergers with any automaker, let alone FCA, were out of the question:

We have no interest or plan other than accelerating the One Ford Plan; delivering product excellence and driving innovation in every part of our business. We are never going to take our eye off of being a great developer of cars, trucks and utility vehicles.

Fields added he would consider ways to improve his company’s overall business model, stating it was important for Ford “to open up that lens” in order to lead the industry towards betterment.

(Photo credit: Monica Arellano-Ongpin/Flickr/CC BY 2.0)

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General Motors, FCA Recruit Advisors Amid Merger Standoff http://www.thetruthaboutcars.com/2015/06/general-motors-fca-recruit-advisors-amid-merger-standoff/ http://www.thetruthaboutcars.com/2015/06/general-motors-fca-recruit-advisors-amid-merger-standoff/#comments Thu, 18 Jun 2015 15:00:22 +0000 http://www.thetruthaboutcars.com/?p=1095169 The Lifetime movie starring FCA has reached the “dangerous stalker” phase, as the automaker and General Motors recruit advisors amid a merger standoff. Despite GM and CEO Mary Barra both rebuffing FCA’s and CEO Sergio Marchionne’s attempts to consolidate the two automakers and their respective resources, the former has brought aboard Goldman Sachs and Morgan […]

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Abarth 500

The Lifetime movie starring FCA has reached the “dangerous stalker” phase, as the automaker and General Motors recruit advisors amid a merger standoff.

Despite GM and CEO Mary Barra both rebuffing FCA’s and CEO Sergio Marchionne’s attempts to consolidate the two automakers and their respective resources, the former has brought aboard Goldman Sachs and Morgan Stanley for advice in handling the latter’s attempts to force the issue, Reuters reports. FCA is being advised by UBS, with help from Lazard via the automaker’s founding Agnelli family.

For months, Marchionne has been beating the drum of consolidation, going as far as to recruit GM investors to force the automaker’s board to meet FCA at the negotiation table. His reasoning amounts to reducing costs involved in developing platforms and technologies for new vehicles by spreading those costs throughout two or more merged parties.

However, for FCA to make GM theirs forever and always, sources close to the matter claim the automaker would need to pay $77 billion in an all-stock transaction, based on GM’s shareholders demanding a 35 percent premium regarding market capitalization, as well as a significant payout on their shares.

The hostile takeover would put FCA under financial strain, as well. Its market value — most of which is linked to Ferrari, which is set to strike out on its own later this year — is around $57 billion, while capitalization is $20 billion, much smaller than GM’s respective figures of $84 billion and $57 billion.

(Photo credit: Shane Hayes/Flickr/CC BY-ND 2.0)

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Toyota, Ford Show No Interest In Heading Down The Aisle With FCA http://www.thetruthaboutcars.com/2015/06/toyota-ford-show-no-interest-in-heading-down-the-aisle-with-fca/ http://www.thetruthaboutcars.com/2015/06/toyota-ford-show-no-interest-in-heading-down-the-aisle-with-fca/#comments Fri, 12 Jun 2015 16:00:51 +0000 http://www.thetruthaboutcars.com/?p=1091505 When General Motors ultimately rebuffs FCA’s attempts to put a ring on it, Toyota or Ford could be the one true love, right? Not so fast. Toyota North America CEO Jim Lentz told those attending a groundbreaking ceremony at the Toyota Technical Center in York Township, Mich. his employer had not been contacted by FCA […]

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Toyota North America Groundbreaking Ceremony

When General Motors ultimately rebuffs FCA’s attempts to put a ring on it, Toyota or Ford could be the one true love, right? Not so fast.

Toyota North America CEO Jim Lentz told those attending a groundbreaking ceremony at the Toyota Technical Center in York Township, Mich. his employer had not been contacted by FCA CEO Sergio Marchionne about consolidation between the two, The Detroit News reports.

Had the suggestion been made, however, Lentz says it wouldn’t happen, as there would be “no advantage” for Toyota to consider such a move, citing Ford’s decision to avoid bankruptcy by selling off brands like Volvo and Land Rover to focus on a simpler portfolio:

To me, a large OEM today taking on Chrysler is contrary to what was very successful for Ford. FCA has a very strong Jeep brand, and especially today with fuel prices, it’s a great brand to have… but it really isn’t a fit for what we need at Toyota.

Speaking of Ford, CFO Bob Shanks said consolidation could occur at the supplier level, as well as partnerships with other automakers to share powertrain and transmission technology. As for Ford marrying FCA, however:

We’re not a suitor for FCA. We don’t see that type of opportunity as one that applies to us.

We have a lot of experience with mergers… We’re not babes in the woods. Based on that experience, for us that doesn’t seem to be where we’d want to go. We want to have a more forward-looking perspective in terms of what’s happening in the industry… It doesn’t seem to be that it would be doubling down on the past.

Kelley Blue Book senior analyst Karl Brauer had some encouraging news for Marchionne, stating FCA would its true love eventually, just not among the larger automakers, whom Brauer believes already have enough on their minds as it is without seeing a Ram 1500 in the parking lot blasting “Every Breath You Take” and “Wrapped Around Your Finger” from its custom bed with embedded nine-speaker audio system:

Poor Sergio; always a bridesmaid, never a bride.

[Photo credit: Toyota]

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Marchionne Planning Shotgun Wedding For FCA With General Motors http://www.thetruthaboutcars.com/2015/06/marchionne-planning-shotgun-wedding-for-fca-with-general-motors/ http://www.thetruthaboutcars.com/2015/06/marchionne-planning-shotgun-wedding-for-fca-with-general-motors/#comments Tue, 09 Jun 2015 18:00:22 +0000 http://www.thetruthaboutcars.com/?p=1088273 How desperate has FCA CEO Sergio Marchionne become about marrying off his company? He’s asking activist investors to prod General Motors to the chapel. Marchionne recently began reaching out to hedge funds and other activist investors to help bring FCA and GM (or a European automaker) together to consolidate resources, Wall Street Journal reports. The […]

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Fiat Coupe Getting Ready To Be Married

How desperate has FCA CEO Sergio Marchionne become about marrying off his company? He’s asking activist investors to prod General Motors to the chapel.

Marchionne recently began reaching out to hedge funds and other activist investors to help bring FCA and GM (or a European automaker) together to consolidate resources, Wall Street Journal reports.

The search, which is coming up blank thus far, is the latest in the CEO’s attempt to find a happy ending for his increasingly desperate romantic tragicomedy film, fearing excess production and duplicate costs in engineering, R&D et al threaten future profitability of the overall industry.

For now, though, FCA’s low profit margins do not make for a good partner with stronger players, while Marchionne’s dealings with GM leave much to be desired. In 2005, he convinced the Detroit automaker to pay $2 billion to not buy Fiat — in hospice care by then — a move which also dissolved a five-year-old partnership to produce engines and transmissions together.

More recently, Marchionne attempted to woo GM back with an email to CEO Mary Barra suggesting as much. The automaker is transitioning its lineup to global architectures and can build said lineup on a broader scale than FCA. GM is also undergoing an internal consolidation to further boost profits, a plan Barra and others in management won’t allow to be derailed by outside distractions like Marchionne holding up a boombox in front of the RenCen playing Peter Gabriel, hoping GM will say anything but no.

However, Barra’s recent dealings with activist investors over a share buyback of $8 billion — resulting in a $5 billion buyback with no further issues regarding board seats — has given Marchionne hope for his own cause, which could become more aggressive with every breath GM takes.

[Photo credit: hamster!/Flickr/CC BY-ND 2.0]

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Bloomberg: Subaru “has to decide what kind of company it wants to be” http://www.thetruthaboutcars.com/2015/06/bloomberg-subaru-has-to-decide-what-kind-of-company-it-wants-to-be/ http://www.thetruthaboutcars.com/2015/06/bloomberg-subaru-has-to-decide-what-kind-of-company-it-wants-to-be/#comments Mon, 08 Jun 2015 16:47:59 +0000 http://www.thetruthaboutcars.com/?p=1087729 Subaru has a problem, though it’s a problem many other automakers would love to have. The small Japanese automaker is growing at a rapid rate and it’s fully expected to run out of capacity to fulfill demand sooner rather than later. Most automakers would simply expand and flood the market with more units to feed the […]

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Subaru has a problem, though it’s a problem many other automakers would love to have. The small Japanese automaker is growing at a rapid rate and it’s fully expected to run out of capacity to fulfill demand sooner rather than later. Most automakers would simply expand and flood the market with more units to feed the sales rush, but for Subaru it might mean becoming the opposite of the market position and perception they’ve taken years to cultivate.

As Bloomberg‘s Kyle Stock puts it, “Being small, though, is the reason Subaru has become such a big deal. With manufacturing capacity maxed out, it now has to decide what kind of company it wants to be.”

The article, published today, paints Subaru between a rock and a hard place with two options: stay small and negate future growth or expand and possibly alienate all those customers who bought into the brand under the promise “Love. It’s what makes a Subaru, a Subaru.”

Subaru’s recent growth isn’t driven purely by marketing, but also because the small manufacturer was positioned in the right place at the right time with the Outback and Forester, both of which sit squarely in the currently hot crossover segment. In fact, even the lowest selling crossover in Subaru’s lineup, the Impreza-based XV Crosstrek, outsold their top selling passenger car, the Impreza, by over 14,000 units in 2014.

That makes what Subaru doesn’t do right now of particular interest. From Bloomberg:

It doesn’t have a luxury brand like Honda’s Acura or Toyota’s Lexus. It still doesn’t make a giant SUV, or a truck, or a super-expensive “halo car” designed to drum up interest from teenagers and the Top Gear crowd. Its sedans aren’t particularly popular and the company doesn’t make much of an effort to sell cars in Europe, the Middle East, or South America, like Nissan or Ford does. Kansas is the closest thing it has to an emerging market. Subaru still can’t meet demand. By the end of next year, Subaru’s factories in the U.S. and Japan won’t be able to produce more vehicles.

Currently, Subaru is enjoying a sky high 9 percent profit. However, if it does choose to expand and the crossover boom goes bust, it could leave Subaru vulnerable as it will need to discount their way into driveways to keep operations afloat. With incentives comes lower resale values, in turn driving consumers to competitors – the same customers that appreciate Subaru’s smallness.

What will Subaru do? We’ll see. But, mass market is not what has made Subaru a successful Subaru to date.

 

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FCA Delaying Dozen Model Introductions, Redesigns Across Product Range http://www.thetruthaboutcars.com/2015/06/fca-delaying-dozen-model-introductions-redesigns-across-product-range/ http://www.thetruthaboutcars.com/2015/06/fca-delaying-dozen-model-introductions-redesigns-across-product-range/#comments Tue, 02 Jun 2015 16:00:27 +0000 http://www.thetruthaboutcars.com/?p=1082089 Suppliers close to FCA and its plans say production for a dozen new and redesigned models have been delayed, including key Jeep and Ram offerings. While high-margin products like the Jeep Wrangler, Grand Cherokee, and Ram 1500 wait for their redesigns, Alfa Romeo may be the only brand in FCA’s portfolio to receive its awaited […]

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2015 Jeep Wrangler Willys Wheeler Edition

Suppliers close to FCA and its plans say production for a dozen new and redesigned models have been delayed, including key Jeep and Ram offerings.

While high-margin products like the Jeep Wrangler, Grand Cherokee, and Ram 1500 wait for their redesigns, Alfa Romeo may be the only brand in FCA’s portfolio to receive its awaited models much sooner than planned, Reuters reports.

The suppliers stated a number of reasons behind the delays, including last-minute design and engineering changes, especially those whose changes could reduce the automaker’s overall investment in its products in the short-term as CEO Sergio Marchionne continues seeking a partner for consolidation. FCA held a net debt of €8.6 billion ($9.6 billion USD) at the end of Q1 2015, while cash and marketable securities fell €1.1 billion ($1.2 billion) over the same period.

Despite the automaker’s focus on updating its most profitable models, redesigns of said models are being pushed back. The redesigned Ram 1500 was to hit production by the middle of 2017, but the suppliers say the pickup will begin its trip down the line in November 2017. Meanwhile, the Jeep Wrangler is set for a July 2017 introduction instead of earlier in the year, the Grand Cherokee may be delayed by as much as a year from its autumn 2017 launch, and the Grand Wagoneer — which is expected to share its underpinnings with the Grand Cherokee — may not make its autumn 2018 production date.

Other models to see delays in introduction or redesign include: a Jeep compact crossover to replace the Patriot/Compass siblings (pushed back six months from spring 2016); Dodge Dart and Journey (full redesign set for 2019-2020); Chrysler 300, Dodge Charger and Challenger (new designs to now come in 2019 or later); and Chrysler full-size and mid-size crossovers (postponed/shelved from 2017 and 2018 introductions).

[Photo credit: Jeep]

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Elkann: Marchionne Emailed Barra, Others About Consolidation http://www.thetruthaboutcars.com/2015/05/elkann-marchionne-emailed-barra-others-about-consolidation/ http://www.thetruthaboutcars.com/2015/05/elkann-marchionne-emailed-barra-others-about-consolidation/#comments Fri, 29 May 2015 18:00:25 +0000 http://www.thetruthaboutcars.com/?p=1078122 FCA Chairman John Elkann confirmed CEO Sergio Marchionne did email General Motors CEO Mary Barra about consolidation, though GM wasn’t the only one. Elkann informed reporters the email wasn’t the only one sent by Marchionne, though the chairman didn’t specify who else Marchionne contacted about marriage, Reuters reports. He adds FCA could consider a hostile […]

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Fiat 500 Backside Badging

FCA Chairman John Elkann confirmed CEO Sergio Marchionne did email General Motors CEO Mary Barra about consolidation, though GM wasn’t the only one.

Elkann informed reporters the email wasn’t the only one sent by Marchionne, though the chairman didn’t specify who else Marchionne contacted about marriage, Reuters reports. He adds FCA could consider a hostile bid for GM or another automaker “if there are the prerequisites to do something that makes sense,” again opting to remain vague on details.

As far as marriage in general is concerned, Elkann supports Marchionne’s campaign for overall industry consolidation, hoping the action would spark debate. He also believes consolidation will happen, but declined to say who he thought would make the ideal partner to take FCA’s hand, adding his company had “very good prospects” for the future.

[Source: Fiat]

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Marchionne Hearing Wedding Bells By 2018, No Marriage With Opel http://www.thetruthaboutcars.com/2015/05/marchionne-hearing-wedding-bells-by-2018-no-marriage-with-opel/ http://www.thetruthaboutcars.com/2015/05/marchionne-hearing-wedding-bells-by-2018-no-marriage-with-opel/#comments Thu, 28 May 2015 16:00:31 +0000 http://www.thetruthaboutcars.com/?p=1077282 FCA CEO Sergio Marchionne believes consolidation will occur as early as 2018. Meanwhile, Opel won’t be taking FCA’s hand in marriage. Opel CEO Karl-Thomas Neumann stated a merger between his company and FCA was not going to happen, though he agreed with Marchionne in principle regarding such mergers, Reuters reports, especially in regards to volume, […]

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Fiat Cinquecento Ready For The Wedding Circa July 2011

FCA CEO Sergio Marchionne believes consolidation will occur as early as 2018. Meanwhile, Opel won’t be taking FCA’s hand in marriage.

Opel CEO Karl-Thomas Neumann stated a merger between his company and FCA was not going to happen, though he agreed with Marchionne in principle regarding such mergers, Reuters reports, especially in regards to volume, scale and utilisation.

Opel’s decision to remain within the General Motors family follows a similar rebuff by GM CEO Mary Barra, who received an email from Marchionne in March suggesting the two combine forces. When asked about the email on a recent visit to FCA’s factory in Melfi, Italy, Marchionne said he writes “lots of emails,” adding he doesn’t talk about such major decisions as consolidation via email.

Meanwhile, Marchionne is holding onto the idea of consolidation overall, believing the industry will see the first occurrence as early as 2018. He didn’t specify his company would be the one heading down the aisle in said consolidation, however.

[Source: neekoh.fl/Flickr/CC BY 2.0]

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Marchionne May Marry FCA To Apple, Google If No Automaker Will http://www.thetruthaboutcars.com/2015/04/marchionne-may-marry-fca-apple-google-no-automaker-will/ http://www.thetruthaboutcars.com/2015/04/marchionne-may-marry-fca-apple-google-no-automaker-will/#comments Thu, 30 Apr 2015 16:00:11 +0000 http://www.thetruthaboutcars.com/?p=1056962 FCA CEO Sergio Marchionne’s search for a consolidation partner may take him to Silicon Valley if the automakers won’t give him the time of day. While making his pitch for consolidation during Wednesday’s Q1 2015 earnings call, Marchionne said dialogue about a possible partnership with Apple or Google if he couldn’t pair FCA off with […]

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Apple Logo Circa 2005

FCA CEO Sergio Marchionne’s search for a consolidation partner may take him to Silicon Valley if the automakers won’t give him the time of day.

While making his pitch for consolidation during Wednesday’s Q1 2015 earnings call, Marchionne said dialogue about a possible partnership with Apple or Google if he couldn’t pair FCA off with another automaker should be encouraged, Bloomberg reports.

His reasoning?

I’ve always been intrigued by the notion of having technology disruptors show up in the marketplace and change the paradigm. If they show up and they are truly successful, with their cash piles and know-how, they could fundamentally hurt this industry.

At present, FCA already has an established relationship with Apple, with the tech giant’s Internet software and services boss Eddy Cue having a seat on Ferrari’s board, and CFO Luca Maestri having several years of experience in the automotive industry, including helming General Motors’ relationship with Fiat between 2000 and 2005.

On the other end, Apple is hard at work on an EV, with production set for 2020 unless the execs aren’t happy with progress. The company’s shareholders also would like Apple to pair-off with Tesla — the most recent urging occurring last month — though CEO Tim Cook only stated that the Californian automaker would use his company’s CarPlay connected-vehicle system.

As far as FCA and Apple heading down to the chapel is concerned, no one at the latter offered any comment to Marchionne’s proposal. With the company having just purchased Beats for $3 billion last year and divesting itself of in-house production of its physical offerings, a deal between it and any automaker, let alone FCA, isn’t likely at this time.

[Photo credit: Christopher Aloi/Flickr/CC BY-SA 2.0]

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Marchionne Makes Case For Consolidation With 25-Page PowerPoint http://www.thetruthaboutcars.com/2015/04/marchionne-makes-case-consolidation-powerpoint-presentation/ http://www.thetruthaboutcars.com/2015/04/marchionne-makes-case-consolidation-powerpoint-presentation/#comments Wed, 29 Apr 2015 17:00:31 +0000 http://www.thetruthaboutcars.com/?p=1056346 Not one to give up on corporate marriage, FCA CEO Sergio Marchionne posted a merger thesis on his company’s website prior to FCA’s Q1 2015 earnings call. The 25-page PowerPoint presentation – titled “Confessions of a capital junkie” – makes the case for consolidation by outlining several key issues all automakers are facing, and the savings that […]

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Sergio Marchionne at the Italian Embassy in DC Circa February 2012

Not one to give up on corporate marriage, FCA CEO Sergio Marchionne posted a merger thesis on his company’s website prior to FCA’s Q1 2015 earnings call.

The 25-page PowerPoint presentation – titled “Confessions of a capital junkie” – makes the case for consolidation by outlining several key issues all automakers are facing, and the savings that could be garnered only through consolidation, Detroit Free Press reports.

Despite being blown off by General Motors, Ford, Peugeot and a handful of others over the past few weeks, Marchionne states the presentation doesn’t let his company off the hook as far as its current position “in the automotive food chain” goes, nor is it an attempt to sell FCA, a revision of his five-year plan, or his “final big deal.” Instead, he goes into the need to consolidate companies to better handle increasing capital investment costs as far as rapid technological development, climbing regulatory costs, and tightening emissions standards go.

According to Marchionne, consolidation would not only reduce the aforementioned costs, but better optimization of industrial allocations and “an exceptional value creation opportunity for shareholders” while leaving jobs, distribution and brands untouched.

[Photo credit: Italian Embassy/Flickr/CC BY-ND 2.0]

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German Automakers Rally In Support of US-EU Trade Agreement http://www.thetruthaboutcars.com/2015/01/german-automakers-rally-support-us-eu-trade-agreement/ http://www.thetruthaboutcars.com/2015/01/german-automakers-rally-support-us-eu-trade-agreement/#comments Wed, 28 Jan 2015 15:00:17 +0000 http://www.thetruthaboutcars.com/?p=989578 Leaders from Germany’s automotive sector held a rally Wednesday in Berlin to lend support to a transatlantic trade agreement heavily facing opposition. Automotive News reports the agreement between the European Union and the United States, which is supported by the likes of Daimler AG’s Dieter Zetsche, Volkswagen AG’s Martin Winterkorn, and even Germany’s chancellor Angela […]

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Leaders from Germany’s automotive sector held a rally Wednesday in Berlin to lend support to a transatlantic trade agreement heavily facing opposition.

Automotive News reports the agreement between the European Union and the United States, which is supported by the likes of Daimler AG’s Dieter Zetsche, Volkswagen AG’s Martin Winterkorn, and even Germany’s chancellor Angela Merkel, would be the largest such agreement put into play when signed. The deal would deliver a gain of €119 billion ($135 billion USD) for the EU and $131 billion for the U.S. by 2027, which equals an average of €545 ($620) and $910 for a family of four in their respective locations. Eighty percent of the gains would be the result of eliminating duplication costs linked to maintenance of two different bureaucracies and regulations.

However, German union IG Metall and various consumer groups take issue with key parts of the agreement, if not the entire agreement itself. For the union, the investor-to-state dispute settlement mechanism — which grants corporations the right to sue the government if revenue is lost due to government policy — is unacceptable, as are the threats of softening environmental and consumer protections, and hollowed workers’ rights. Other groups fear U.S. companies could force European legislators to draft policies in the former’s favor, and “harmonize safety or product standards downward.”

As for why the German automakers are rallying, the aforementioned harmonization would allow all automakers to focus on one set of safety and emission standards, thus allowing for the possibility of buying a new car from a different market without waiting 25 years first. That said, the agreement could collapse without majority support from all 28 members of the European Parliament.

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Marchionne: New No. 1 Manufacturer Could Arise From Mergers http://www.thetruthaboutcars.com/2014/10/marchionne-new-1-manufacturer-arise-mergers/ http://www.thetruthaboutcars.com/2014/10/marchionne-new-1-manufacturer-arise-mergers/#comments Thu, 09 Oct 2014 14:00:34 +0000 http://www.thetruthaboutcars.com/?p=928018 Fiat Chrysler Automobiles CEO Sergio Marchionne — who will be retiring from the company after the next five-year plan runs its course after 2018 — believes mergers between automakers will one day result in a new No. 1 automaker. According to Bloomberg, the driving factor in creating an automaker above Toyota on the global manufacturer […]

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Sergio Marchionne - FCA

Fiat Chrysler Automobiles CEO Sergio Marchionne — who will be retiring from the company after the next five-year plan runs its course after 2018 — believes mergers between automakers will one day result in a new No. 1 automaker.

According to Bloomberg, the driving factor in creating an automaker above Toyota on the global manufacturer podium will come down to money and competition, as automakers will likely need more of the former to develop and produce new vehicles while also fending off all comers, merging with potential partners as needed.

As far as FCA is concerned, chair John Elkann says the company would be ready to consolidate resources with another within the next five to 10 years “if it makes sense” to do so. The company would look outside of Europe for a partner if and when the time comes.

For now, FCA plans to take sixth place by expanding sales on the strength of new models, such as the upcoming Jeep Renegade and the reintroduction of Alfa Romeo to the United States market. The automaker aims to deliver 7 million units in 2018, compared with 4.4 million in 2013.

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Buffett Enters Dealership Business With Van Tuyl Group Purchase http://www.thetruthaboutcars.com/2014/10/buffett-enters-dealership-business-van-tuyl-group-purchase/ http://www.thetruthaboutcars.com/2014/10/buffett-enters-dealership-business-van-tuyl-group-purchase/#comments Mon, 06 Oct 2014 12:00:46 +0000 http://www.thetruthaboutcars.com/?p=926441 Warren Buffett — no relation to Jimmy — is a lot of things: investor extraordinaire, railroad magnate, newspaper mogul, hip-hop enthusiast et al. As of last Thursday, however, he picked up a new title: master auto dealer. Bloomberg reports Buffett’s Berkshire Hathaway purchased Arizona-based Van Tuyl Group, the largest privately owned auto dealership group in […]

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Grand Re-Opening Of Jay-Z's 40/40 Club - Inside

Warren Buffett — no relation to Jimmy — is a lot of things: investor extraordinaire, railroad magnate, newspaper mogul, hip-hop enthusiast et al. As of last Thursday, however, he picked up a new title: master auto dealer.

Bloomberg reports Buffett’s Berkshire Hathaway purchased Arizona-based Van Tuyl Group, the largest privately owned auto dealership group in the United States, for an undisclosed sum. Namesake Larry Van Tuyl will continue to run the show, especially with Buffett’s plans to scale operations significantly.

The purchase is a bet on the consolidation of the dealership industry overall, as a handful of groups — like AutoNation, Group 1 and Penske — come into more dealerships; Van Tuyl operates 78 in 10 states, including Arizona, Texas and Nebraska.

Once the paperwork is sorted in Q1 2015, the group will be renamed Berkshire Hathaway Automotive. The group has over $8 billion in revenue.

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Volvo Restructuring To Three Families, Configurations By 2019 http://www.thetruthaboutcars.com/2014/08/volvo-restructuring-three-families-configurations-2019/ http://www.thetruthaboutcars.com/2014/08/volvo-restructuring-three-families-configurations-2019/#comments Fri, 29 Aug 2014 10:00:44 +0000 http://www.thetruthaboutcars.com/?p=903194 By 2019, the face of Volvo will change as the Sino-Swedish automaker begins restructuring its offerings, with the new XC90 leading the way. Autoblog reports Volvo will align its lineup portfolio around three families (40, 60, 90) and three designations/configurations (S sedan, V wagon, XC crossover). In turn, the 40 family will share a platform […]

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Volvo-XC90-2015-119

By 2019, the face of Volvo will change as the Sino-Swedish automaker begins restructuring its offerings, with the new XC90 leading the way.

Autoblog reports Volvo will align its lineup portfolio around three families (40, 60, 90) and three designations/configurations (S sedan, V wagon, XC crossover). In turn, the 40 family will share a platform with parent company Geely’s offerings, while the 60 and 90 families will use Volvo’s SPA modular platform.

Additionally, the V40/V60/V90 wagons will have a Cross Country variant, matching up with Audi’s and Subaru’s offroad formula for their respective non-rugged base offerings. Meanwhile, R-Design and Polestar will apply their magic performance touches to a few of the new vehicles, going up against similar efforts from BMW, Mercedes and Audi.

All of the above are expected to come online within the next four years, but no coupes or convertibles are in the plans, citing a lack of a case for either at this time. Volvo will instead focus on boosting its volume, with a goal of 800,000 units for 2014 alone.

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Fiat Sets Date Of Shareholder Meeting For August 1 http://www.thetruthaboutcars.com/2014/07/fiat-sets-date-of-shareholder-meeting-for-august-1/ http://www.thetruthaboutcars.com/2014/07/fiat-sets-date-of-shareholder-meeting-for-august-1/#comments Fri, 04 Jul 2014 13:00:38 +0000 http://www.thetruthaboutcars.com/?p=858633 Own any shares in Fiat S.p.A.? The automaker just announced it will hold its next general assembly of all shareholders August 1, where the topic of discussion will be the approval of the merger of Fiat with Chrysler Group to become Fiat Chrysler Automobiles N.V. Reuters reports shareholders will also be asked to approve the […]

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A new Fiat Chrysler Automobiles sign is pictured after being unveiled at Chrysler Group World Headquarters in Auburn Hills, Michigan

Own any shares in Fiat S.p.A.? The automaker just announced it will hold its next general assembly of all shareholders August 1, where the topic of discussion will be the approval of the merger of Fiat with Chrysler Group to become Fiat Chrysler Automobiles N.V.

Reuters reports shareholders will also be asked to approve the merger of Fiat with its wholly owned subsidiary Netherlands Fiat Investments N.V. prior to the FCA vote. The meeting would allow CEO Sergio Marchionne to list FCA on the New York Stock Exchange by October at the earliest.

Those who approve FCA’s existence will receive one FCA common share for every Fiat share they hold, while those against will have the right of withdrawal for the next 15 days, with the redemption price set to €7.727 ($10.51 USD) per Fiat share.

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Endless GM Recall Parade Sign Of Industry-Wide Action To Come http://www.thetruthaboutcars.com/2014/05/endless-gm-recall-parade-sign-of-industry-wide-action-to-come/ http://www.thetruthaboutcars.com/2014/05/endless-gm-recall-parade-sign-of-industry-wide-action-to-come/#comments Thu, 22 May 2014 10:00:56 +0000 http://www.thetruthaboutcars.com/?p=828562 Detroit Free Press posits the endless recall parade General Motors has been leading since late February 2014 may be doing more harm than good for public perception or its bottom line. Though spokesman Greg Martin claimed the recalls were an effort to make his employer “a first-class safety organization” by focusing hard upon the consumer, […]

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GM RenCen Storm Clouds

Detroit Free Press posits the endless recall parade General Motors has been leading since late February 2014 may be doing more harm than good for public perception or its bottom line. Though spokesman Greg Martin claimed the recalls were an effort to make his employer “a first-class safety organization” by focusing hard upon the consumer, a survey by AutoTrader found 51 percent of auto consumers were less confident in the industry’s overall safety record as a result of the actions by GM, up from 44 percent who thought the same five days’ earlier. In addition, the automaker will take a $400 million charge in Q2 2014 for the recalls since April 1 as of this writing, while its current stock price of $33.07 per share is a few cents above its IPO price from November 2010.

Autoblog continues on this thread, proclaiming what GM is doing is the beginning of an industry-wide shift toward issuing full recalls for any flaw in a given product, all under heightened scrutiny from the public and government regulators. For the first months of this year alone, all automakers have recalled a total of 22.4 million vehicles, the bulk of which belong to GM. Kelly Blue Book analyst Akshay Anand says the parade is a double-edge sword, particularly for the General; while such recalls are a sign automakers are being proactive in ensuring their products are as safe as they can be, consumers may perceive the effort as a sign automakers are failing to do their job well in the first place.

Automotive News follows with Fiat Chrysler Automobiles CEO Sergio Marchionne, who stated in a panel discussion at the Brookings Institute this week what else might occur when the GM-led parade becomes a permanent fixture in the industry:

If effectively this frequency of recalls becomes a norm, if everybody starts doing this, then I think you will see this cost being shifted to the consumer. It will transfer itself over onto the selling price of the vehicle.

Marchionne adds automakers, in turn, will act more sensibly in handling potential defects in product, noting punitive actions — such as paying $35 million in fines to the National Highway Traffic Safety Administration — will have little in the way of such handling when reputation is the bigger issue for the industry as a whole.

Speaking of the main parade itself, Autoblog reports 218,000 2004 through 2008 Chevrolet Aveos have been recalled due to the daytime running light module in the instrument panel possibly overheating, melting and setting the vehicle ablaze. According to spokesman Alan Adler, the automaker is “aware of some fires” so far, and is working on a fix for the module. Adler adds that while he doesn’t know when the fix will come, GM will send a second notice to owners when the time comes to schedule repair work.

Detroit Free Press concludes by explaining why GM continues to issue recalls as it combs through its records to avoid another decade-long delay in taking such action:

  • The government has ordered the automaker to meet with the NHTSA monthly on investigations and recalls as part of the former’s $35 million settlement with the latter
  • GM CEO Mary Barra’s appointment of Jeff Boyer to global quality chief — with the mandate to report directly to her if necessary — means anything deemed dangerous or otherwise unknown, including previously unreported defects — are up for attention
  • The automaker’s investors prefer to get the bad news out of the way and accept whatever potential pain awaits in as few quarters as possible, even if no one is happy about swallowing such medicine in the first place

The Freep also provided a list of every recall from January through this week, minus the latest recall issued Wednesday; total recall to date is 18,666,842.

GM

On the sales front, Automotive News reports dealers won’t be able to sell any of the 2009 through 2014 Chevrolet Traverse, Buick Enclave and GMC Acadia crossovers thanks to a stop-sale order issued in a recall involving the front seat belt cable in the vehicles. The order comes during one of the biggest sales weekends of the year, putting a damper on potential Memorial Day promotions. Though dealers could still close on sales without actually allowing the vehicle to leave the lot, no test drives can be carried out in affected demonstrators, making such sales more difficult. GM is offering an end-of-month incentive to maintain May sales momentum, but that may not be enough to offset the extra floorplanning costs if few vehicles can be sold until the affected units are repaired.

Back in the Beltway, Barra met with U.S. Senator Claire McCaskill of Missouri and other members of Congress to discuss recent findings in the February 2014 ignition switch recall. Though spokesman Greg Martin confirmed the meetings did take place, he did not give details on all that was said between Congress and the CEO.

Meanwhile, members of the Obama administration who helped assemble the rescue packages for both Chrysler and GM said they knew nothing about the out-of-spec switch at the heart of the recall maelstrom when said packages were crafted between them and the automaker’s senior execs. One member, Harry Wilson, stated that even if the task force asked GM point-blank about the switch, he doubted they would ever get a straight answer. Lead adviser Steven Rattner added that as far as he knew, the execs before him then didn’t know about the problem; therefore, neither could his task force.

Over in Texas, Bloomberg both GM and supplier Delphi have asked the Texas Supreme Court to combine four suits linked to the switch into one state case. The claim is fighting each one separately would cost the duo time and money, while combining the four and rolling subsequent cases going forward into a single case would “eliminate duplicative discovery, void conflicting pretrial rulings, conserve judicial resources, be more convenient for the parties and witnesses and otherwise promote a more just and efficient conduct of this litigation.” The cases mention involve wrongful injury and death.

With GM’s cadre of lawyers coming under the gun now, Detroit Free Press reports the automaker’s general counsel Michael Millikin has named attorney Lucy Clark Doughtery to advise Boyer and product development chief Mark Reuss. Millikin is also working with independent lawyer Anton Valukas on the internal investigation into why GM handled the recall the way it had. The general counsel’s own future with the company has been called into question, though GM claims Millikin has no “current plans to retire” at this time.

In financial news, Automotive News says GM Financial is preparing to go under its own test of scrutiny of loans originated by its dealership network in an effort to avoid punitive action by the Consumer Financial Protection Bureau based on allegations of discrimination in lending rates among minority consumers. The lender’s chief compliance officer, Dan Bickmore, says his role is to help reorganize the company into compliance with the CFPB, going as far as to establish a new compliance department and boosting the lender’s complaint management process and fair lending areas. He also aims to help educate dealerships on appropriate lending policies to prevent discrimination of protected classes when drafting a loan or lease contract.

On the design front, global design chief Ed Welburn says that with GM’s line of vehicles sharing the same technology and functionality with each other, styling will be needed to help differentiate each unit. He goes on to say the automaker has committed a few design sins in the past, favoring functionality over style and charm, as well as decontenting interiors when a product was overbudget. Welburn concludes that the new guard leading GM “really cares about interiors now, and it shows,” such as the interiors in the 2014 Chevrolet Corvette and Cadillac ELR.

Finally, The Detroit News says the 2015 GMC Sierra All Terrain HD will go on sale this summer. The pickup will be available in 2500 and 3500 weight classes with double and crew cab options, with trim lines to include SLE, SLT and Z71. Power is expected to come from a standard 6-liter gasoline engine, with a twin-turbo Duramax diesel on the options list.

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Fiat Chrysler Automobiles’ London Headquarters To Focus On Corporate Finance http://www.thetruthaboutcars.com/2014/05/fiat-chrysler-automobiles-london-headquarters-to-focus-on-corporate-finance/ http://www.thetruthaboutcars.com/2014/05/fiat-chrysler-automobiles-london-headquarters-to-focus-on-corporate-finance/#comments Wed, 21 May 2014 11:00:08 +0000 http://www.thetruthaboutcars.com/?p=827618 Fiat Chrysler Automobiles’ new headquarters in London, England will be as small as many Silicon Valley startups, with a staff of 50 mostly focused on finance. Automotive News Europe reports FCA CEO Sergio Marchionne and Fiat Group chairman John Elkann will have a home in London, with FCA COO Richard Palmer possibly having a place […]

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Fiat 500 in London

Fiat Chrysler Automobiles’ new headquarters in London, England will be as small as many Silicon Valley startups, with a staff of 50 mostly focused on finance.

Automotive News Europe reports FCA CEO Sergio Marchionne and Fiat Group chairman John Elkann will have a home in London, with FCA COO Richard Palmer possibly having a place there as well. Though no new hiring is planned, the automaker hopes to pull more finance employees from its Asia Pacific and Latin American regions to its headquarters, where most of the work will involve treasury operations.

The move to London also means tax savings for FCA; whereas Fiat paid 31.4 percent in corporate taxes to Italy while Chrysler paid 35 percent to the United States, the Italo-American company will pay only 20 percent for its part of filling the Queen’s coffers. This strategy has come under fire from both sides of the Atlantic, with feelings of betrayal on the part of Italians due to history, and on Americans due to tax dollars used to rescue Chrysler in 2009.

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