The Truth About Cars » sergio marchionne http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sat, 04 Jul 2015 15:51:01 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 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 » sergio marchionne http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com 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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Is Jeep Carrying The Rest of FCA? http://www.thetruthaboutcars.com/2015/06/is-jeep-carrying-the-rest-of-fca/ http://www.thetruthaboutcars.com/2015/06/is-jeep-carrying-the-rest-of-fca/#comments Mon, 29 Jun 2015 19:41:59 +0000 http://www.thetruthaboutcars.com/?p=1102393 Jeep is looking at global growth upwards of 20 percent this year to 1.2 million units and that’s before the brand truly ramps up in China. Could it be possible Jeep’s success is hiding what ails other brands at the newly-formed Fiat Chrysler Automobiles? Jeep is on track to record a best ever year in 2015 […]

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2014 Jeep Grand Cherokee SRT

Jeep is looking at global growth upwards of 20 percent this year to 1.2 million units and that’s before the brand truly ramps up in China.

Could it be possible Jeep’s success is hiding what ails other brands at the newly-formed Fiat Chrysler Automobiles?

Jeep is on track to record a best ever year in 2015 in terms of unit sales with many of the brand’s models returning higher profit margins than those at other marques under the FCA umbrella. However, there are still problems reports The Detroit Bureau, like the struggles with where to build Jeep’s next generation Wrangler.

“It’s a very important and very sensitive decision,” stated Michael Manley, president of the Jeep brand.

The utility-lifestyle brand is also running at or near capacity at their plants, just keeping up with demand, all the while being leveraged in order to prop up other brands financially. Money once meant to redesign the Grand Cherokee has been earmarked for Alfa Romeo. This seems to be true for other models at Jeep as well. On top of it all, Sergio Marchionne wants a Range Rover rivaling Jeep to conquest even greater transaction prices. If such a model existed, FCA could use even more cash to fuel development of new and redesigned models at other brands, but it seems Marchionne might be counting his chickens before they hatch as he drives Wrangler-loads of cash to Italy before such a Range Rover-ish model can come to fruition.

At some point, FCA’s Jeep gravy train is going to come to a halt, and dumping money into brands that look to only stroke the ego of FCA executives – instead of just dumping the brands themselves – will result in what Marchionne has been saying is the cardinal sin of the automotive industry: wasted capital.

Maybe the best way to save money, Mr. Marchionne, is the reduce the number of brands emblazoned on those dealer signs.

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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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Renault-Nissan’s Carlos Ghosn Banks $16M In 2014 http://www.thetruthaboutcars.com/2015/06/renault-nissans-carlos-ghosn-banks-16m-in-2014/ http://www.thetruthaboutcars.com/2015/06/renault-nissans-carlos-ghosn-banks-16m-in-2014/#comments Tue, 23 Jun 2015 16:00:52 +0000 http://www.thetruthaboutcars.com/?p=1097801 Renault-Nissan CEO Carlos Ghosn did well for himself in 2014, banking around $16 million in compensation compared to the salaries of other automotive CEOs. Breaking down the numbers, Nissan paid Ghosn ¥1.035 billion ($8.39 million USD) during 2014, Reuters says, up 4 percent from what he made in 2013. On the Renault side, Ghosn took […]

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Carlos Ghosn

Renault-Nissan CEO Carlos Ghosn did well for himself in 2014, banking around $16 million in compensation compared to the salaries of other automotive CEOs.

Breaking down the numbers, Nissan paid Ghosn ¥1.035 billion ($8.39 million USD) during 2014, Reuters says, up 4 percent from what he made in 2013. On the Renault side, Ghosn took home €7.2 million ($8.17 million), bringing total compensation to $16.56 million.

Ghosn’s combined paycheck is in line with compensation paid to two of the Detroit Three’s CEOs, where both Ford CEO Mark Fields and General Motors CEO Mary Barra made $16.8 million and $16.2 million respectively at the end of their first year helming their companies. Meanwhile, FCA CEO Sergio Marchionne’s compensation paints a complex portrait, with figures ranging between $8 million and $72 million depending on the source.

Among the rest of the ToHoSan Zaibatsu, Toyota’s Akio Toyoda made ¥229 million ($1.84 million) in 2014, while Honda’s Takanobu Ito brought home ¥150 million ($1.21 million).

In Germany, the Teutonic Trinity’s CEOs took home €6.57 million ($7.35 million – Audi’s Rupert Stadler), €7.25 million ($8.11 million – BMW’s Norbert Reithofer) and €9.35 ($10.5 million – Mercedes’ Dieter Zetsche).

Finally, under the remaining stripes of the Tricolore Français, PSA Peugeot Citroën CEO Carlos Tavares received €2.75 million ($3.07 million).

(Photo credit: Nissan)

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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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While You Were Sleeping: BMW M3 Touring Render, Ferrari Dino Returning and Takata’s Quality Chief Gets More Power http://www.thetruthaboutcars.com/2015/06/while-you-were-sleeping-bmw-m3-touring-render-ferrari-dino-returning-and-takatas-quality-chief-gets-more-power/ http://www.thetruthaboutcars.com/2015/06/while-you-were-sleeping-bmw-m3-touring-render-ferrari-dino-returning-and-takatas-quality-chief-gets-more-power/#comments Fri, 05 Jun 2015 13:00:08 +0000 http://www.thetruthaboutcars.com/?p=1085281 As rumors swirl about the eventual release of the BMW M3 Touring, Theophilus Chin has put a couple of renders together of Bavaria’s hot D-pillared automobile. Here’s what happened overnight (and stories we’ve missed over the last few days). BMW M3 Touring (Theophilus Chin) Knowng Theophilus’ wonderful insight, it wouldn’t surprise me if the M3 Touring […]

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BMW M3 Touring Render

As rumors swirl about the eventual release of the BMW M3 Touring, Theophilus Chin has put a couple of renders together of Bavaria’s hot D-pillared automobile.

Here’s what happened overnight (and stories we’ve missed over the last few days).

BMW M3 Touring RenderBMW M3 Touring (Theophilus Chin)
Knowng Theophilus’ wonderful insight, it wouldn’t surprise me if the M3 Touring looks exactly like this when the sheet is pulled off in Frankfurt.

Ferrari DinoFerrari might bring back the Dino, says Sergio (AutoBlog)
…but it likely won’t be marketed as a Ferrari. Instead, Sergio is keen to build a sub-brand around the idea of a resurrected Dino. So far, that’s worked in Sergio’s favor.

1Takata will give quality chief more authority with board role (Automotive News)
Takata will put their quality chief on the board of directors, effectively giving him a louder voice within the company. It only took them seven years.

pst1002-100k-1_23394248Motor Mouth: Why no one drives like a saint all the time (Driving.ca)
“There’s a good reason nobody drives like a saint all-year round: it’s not practical.”

1282948112939395876You Probably Want To Watch Chris Harris Drive The Ferrari 488 GTB (Jalopnik)
I think the 488 GTB is an ugly ducking that grew up to be an ugly duck. But whatever. Here’s Chris Harris getting it sideways.

15TDI_StarlinkKiosk002-300x204Subaru Starlink services priced, packaged (Technology Tell)
It’s kind of like OnStar, but for people who have a higher chance of driving off a cliff near Kings Canyon.

Speedhunters_Keith_Charvonia_Hilux-2Minitruckin’ All Grown Up (Speedhunters)
This is not your grandfather’s Hilux. Actually, this is your grandfather’s Hilux.

Lotus-Elise-frontJaguar Designer Planning Super Lotus Elise (GTspirit)
Jaaaaaag designer Julian Thomson, responsible for the Series 1 Elise, wants to build this “Super” Elise.

car-wash-girls-china-1a-660x546Underdressed Chinese Girls open a Car Wash in Urumqi (CarNewsChina)
Chinese auto show models have resorted to washing cars to make a living, maybe.

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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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2018 Jeep Wrangler Not Going Fully Aluminum After All http://www.thetruthaboutcars.com/2015/05/2018-jeep-wrangler-not-going-fully-aluminum-after-all/ http://www.thetruthaboutcars.com/2015/05/2018-jeep-wrangler-not-going-fully-aluminum-after-all/#comments Wed, 20 May 2015 16:00:27 +0000 http://www.thetruthaboutcars.com/?p=1071514 The 2018 Jeep Wrangler will add diesel and an eight-speed automatic to the mix, but a fully aluminum body is no longer on the agenda. FCA CEO Sergio Marchionne said the upcoming Wrangler would not go the same route as the new Ford F-150, opting instead for specific components — hood, tailgate, doors et al […]

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2015 Jeep Wrangler Unlimited Sahara rear side yellow

The 2018 Jeep Wrangler will add diesel and an eight-speed automatic to the mix, but a fully aluminum body is no longer on the agenda.

FCA CEO Sergio Marchionne said the upcoming Wrangler would not go the same route as the new Ford F-150, opting instead for specific components — hood, tailgate, doors et al — to be made from the alloy, Automotive News reports. Marchionne said the decision to move away from a fully aluminum model came down to comparison costs, and ease of production:

There will be a large portion of that vehicle that will be aluminum. It will not be all aluminum. We’ve run the numbers and we’ve simulated mileage and the impact. Because of the difference in cost — not just of the material but the actual assembly process — I think we can do almost as well without doing it all-aluminum. I think we can get very close.

Were the 2018 Wrangler to have stayed the course, the Jeep facility in Toledo, Ohio would have needed a complete overhaul to manufacture and assemble the vehicle, following a similar action by Ford with the F-150 at its Dearborn Truck Plant in Dearborn, Mich. The Blue Oval invested $843 million to retool the plant and nearby operations, a process taking 10 weeks to undergo; FCA’s new plan would eliminate the need for such action.

[Photo credit: Kamil Kaluski/The Truth About Cars]

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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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Marchionne Isn’t Finding Any Potential Dates For Marriage http://www.thetruthaboutcars.com/2015/04/marchionne-isnt-finding-potential-dates-marriage/ http://www.thetruthaboutcars.com/2015/04/marchionne-isnt-finding-potential-dates-marriage/#comments Thu, 23 Apr 2015 19:09:57 +0000 http://www.thetruthaboutcars.com/?p=1052385 Though FCA CEO Sergio Marchionne is still looking to merge his company with another automaker, no one is all that willing to tie the knot. Despite Marchionne’s quest to consolidate the industry by leading by example, he’s managed to strike out in some way with Ford, General Motors, Peugeot, Renault-Nissan and Volkswagen. Regarding GM, CEO Mary […]

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Though FCA CEO Sergio Marchionne is still looking to merge his company with another automaker, no one is all that willing to tie the knot.

Despite Marchionne’s quest to consolidate the industry by leading by example, he’s managed to strike out in some way with Ford, General Motors, Peugeot, Renault-Nissan and Volkswagen.

Regarding GM, CEO Mary Barra stated Thursday that her company already had plans of its own and that it wasn’t interested in consolidation with another automaker, according to Detroit Free Press:

We laid out a comprehensive plan that takes us through the early part of next decade. We’re already in that top tier. We have a well-articulated plan and we are not going to entertain anything that would distract us from achieving that plan.

Meanwhile, a proposed tie-up with Volkswagen came to naught, though Marchionne stated such a thing was never in the cards in the first place, despite claims by VW Group chairman Ferdinand Piëch of having met with FCA officials to discuss buying a part or all of FCA.

Though there are still other smaller automakers Marchionne could pursue in the spirit of consolidation, like Mazda and Tata, there’s the issue of his own company’s performance as of late. Already stuck with large debts, Forbes states profitability is a major issue among shareholders regarding the automaker. In the U.S. alone, the issue stems from its pursuit of sales volume over profit via aggressive incentivizing. As a result, margins remain at 4 percent and pre-tax earnings have climbed a mere $2.7 billion, even with revenues doubling by $40 billion since the start of the new decade. Thus, no company would likely consider consolidating with FCA.

As for why Marchionne is banging the drum of consolidation, especially as far as his company is concerned, it comes down to survival in the face of competition from outsiders like Google and Apple. The arrival of non-traditional companies like the two tech giants could force automakers to keep up with the pace of change such companies would set the further the latter group digs into the former.

For now, though, the FCA CEO laments the difficulty in finding a partner, going as far as to provide Bloomberg with a metaphor about the search earlier this month:

One of the most difficult things to do is to get the turkey to invite himself to Thanksgiving dinner.

[Photo credit: FCA]

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Marchionne: Fiat Will Never Again Be ‘A General Brand’ In Europe http://www.thetruthaboutcars.com/2015/03/marchionne-fiat-will-never-general-brand-europe/ http://www.thetruthaboutcars.com/2015/03/marchionne-fiat-will-never-general-brand-europe/#comments Thu, 05 Mar 2015 14:00:01 +0000 http://www.thetruthaboutcars.com/?p=1015962 Once a mass-market player in Europe, FCA CEO Sergio Marchionne says Fiat will never again be as such. According to Automotive News Europe, Marchionne made the proclamation during this year’s Geneva Auto Show: In terms of the scope of a mass producer of vehicles, Fiat (brand) no longer offers — and it never intends to […]

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Once a mass-market player in Europe, FCA CEO Sergio Marchionne says Fiat will never again be as such.

According to Automotive News Europe, Marchionne made the proclamation during this year’s Geneva Auto Show:

In terms of the scope of a mass producer of vehicles, Fiat (brand) no longer offers — and it never intends to have — a full range of product of the kind mass brands have. Fiat will lose its appeal as a general brand and it will focus on what it does best.

He adds that “the economics are not there” to keep Fiat in the mass-market arena as far as investments are concerned, and has no plans to claw back lost market share in Europe. As such, Marchionne has refocused the brand’s European lineup toward smaller cars like the 500 range, the Panda, and upcoming replacements for the Bravo and Punto.

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FCA CEO Ordered To Give Deposition In Jeep-Related Lawsuit http://www.thetruthaboutcars.com/2014/11/fca-ceo-ordered-give-deposition-jeep-related-lawsuit/ http://www.thetruthaboutcars.com/2014/11/fca-ceo-ordered-give-deposition-jeep-related-lawsuit/#comments Mon, 17 Nov 2014 13:00:18 +0000 http://www.thetruthaboutcars.com/?p=946210 Fiat Chrysler Automobiles CEO Sergio Marchionne has been ordered by a Georgia judge to give a deposition as part of a lawsuit made against his company by a family whose son was killed in a rear-end crash involving a Jeep. Bloomberg reports the Walden family is suing FCA, stating the fiery accident that took the […]

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Fiat Chrysler Automobiles CEO Sergio Marchionne has been ordered by a Georgia judge to give a deposition as part of a lawsuit made against his company by a family whose son was killed in a rear-end crash involving a Jeep.

Bloomberg reports the Walden family is suing FCA, stating the fiery accident that took the life of their four-year-old son, Remington Cole, was the result of a safety hazard involving the placement of the fuel tank in their 1999 Jeep Grand Cherokee. The judge asked the automaker to make its CEO available for a videotape deposition at a time agreed upon by both involved parties, per a decision on the case made last month.

FCA’s Chrysler Group stated said Jeep wasn’t defective, and that it met or exceeded safety standards that were in place when the vehicle left the assembly line. The automaker did offer its sympathy to the family, however:

Chrysler Group expresses its most profound sympathy to those affected by this tragedy, which resulted from a collision with a pickup truck driven in a manner police described as “erratic, reckless, careless (and) negligent.”

The statement follows a similar response made to the National Highway Traffic Safety Administration in June 2013, when the agency requested the automaker recall 2.7 million Grand Cherokees and Libertys over the vehicles’ fuel tanks, which posed a fire risk due to their location between the rear bumper and axle. FCA later applied a fix for 1.56 million affected units — the installation or repair of a trailer hitch to help minimize the effects of a low-speed crash — but not for the 1999 Grand Cherokee like the one cited in the lawsuit.

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Ferrari To Pay $2.8B For Its Freedom From FCA http://www.thetruthaboutcars.com/2014/11/ferrari-pay-2-8b-freedom-fca/ http://www.thetruthaboutcars.com/2014/11/ferrari-pay-2-8b-freedom-fca/#comments Fri, 14 Nov 2014 14:00:08 +0000 http://www.thetruthaboutcars.com/?p=945081 Set to be its own master within a year’s time, Ferrari must first pay its dues before freedom calls, all to the tune of €2.25 billion ($2.8 billion USD). Automotive News Europe reports the payment will come from a sorting of affairs between the brand and parent company Fiat Chrysler Automobiles, consisting of “distributions and […]

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Set to be its own master within a year’s time, Ferrari must first pay its dues before freedom calls, all to the tune of €2.25 billion ($2.8 billion USD).

Automotive News Europe reports the payment will come from a sorting of affairs between the brand and parent company Fiat Chrysler Automobiles, consisting of “distributions and transfers of cash from Ferrari” among other transactions prior to the October 2015 separation.

CEO and Ferrari chairman Sergio Marchionne says 10 percent of the sports car brand will be made to the public between Q2 and Q3 of 2015, while 80 percent will be given to FCA’s investors; brand vice chairman Piero Ferrari will hold onto the remaining 10 percent.

The spinoff is part of an overall capital raising plan, which includes a $2.5 billion convertible bond set to mature in 2016, and underwritten by JPMorgan Chase, Goldman Sachs, Barclays and UBS. The plan will net FCA approximately €4 billion ($5 billion).

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UAW, Political Leaders Uniting To Keep Wrangler In Ohio http://www.thetruthaboutcars.com/2014/10/uaw-political-leaders-uniting-keep-wrangler-ohio/ http://www.thetruthaboutcars.com/2014/10/uaw-political-leaders-uniting-keep-wrangler-ohio/#comments Mon, 20 Oct 2014 14:00:55 +0000 http://www.thetruthaboutcars.com/?p=933842 With the possibility of an aluminum Jeep Wrangler being built elsewhere, the United Auto Workers and political leaders are coming together to convince Fiat Chrysler Automobiles to keep the icon in Toledo, Ohio. Automotive News reports the gathering will occur Monday at the UAW Local 12, with U.S. Senator Sherrod Brown, U.S. Representative Marcy Kaptur, […]

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With the possibility of an aluminum Jeep Wrangler being built elsewhere, the United Auto Workers and political leaders are coming together to convince Fiat Chrysler Automobiles to keep the icon in Toledo, Ohio.

Automotive News reports the gathering will occur Monday at the UAW Local 12, with U.S. Senator Sherrod Brown, U.S. Representative Marcy Kaptur, and Toledo mayor D. Michael Collins joining the group of workers, local leaders and members of the community to launch a campaign to keep the Wrangler at the Chrysler Assembly Plant, where 1,700 (out of a total of over 6,000) help assemble the icon with the help of 800 employed by neighborhood suppliers.

The campaign is set to begin as FCA CEO Sergio Marchionne warned that should the next-generation Wrangler be based upon an aluminum unibody, it would be built elsewhere:

If the solution is aluminum, then I think unfortunately that Toledo is the wrong place, the wrong setup to try and build a Wrangler, because it requires a complete reconfiguring of the assets that would be cost-prohibitive. It would be so outrageously expensive that it would be impossible to try and work out of that facility.

UAW Local 12 president Bruce Baumhower invited 40 elected officials and local businessmen to the gathering, with the intent of establishing a task force set to address the issues that would take the Wrangler out of Toledo.

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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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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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European Auto Execs Warn Too Stringent CO2 Regs Could Kill Local Industry http://www.thetruthaboutcars.com/2014/10/european-auto-execs-warn-stringent-co2-regs-kill-local-industry/ http://www.thetruthaboutcars.com/2014/10/european-auto-execs-warn-stringent-co2-regs-kill-local-industry/#comments Wed, 08 Oct 2014 11:00:56 +0000 http://www.thetruthaboutcars.com/?p=927626 While hot hatches and hypercar hybrids caught the attention of everyone at the 2014 Paris Auto Show, senior executives for some of Europe’s major automakers warned all who would listen that potentially stronger greenhouse-gas regs could prove “fatal” to the European auto industry. The Detroit Bureau reports European Union legislatures are considering issuing targets of […]

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While hot hatches and hypercar hybrids caught the attention of everyone at the 2014 Paris Auto Show, senior executives for some of Europe’s major automakers warned all who would listen that potentially stronger greenhouse-gas regs could prove “fatal” to the European auto industry.

The Detroit Bureau reports European Union legislatures are considering issuing targets of 65 grams of carbon dioxide per kilometer driven by 2025, a 30-gram drop from the target of 95 grams/km in 2021. The drop would be the equivalent of a vehicle in the United States netting 84 mpg, nearly 30 miles per gallon more than the CAFE target of 54.5 mpg set for the U.S. market at the same time as the 65-gram/km mandate would go into effect.

To make this a possibility, senior execs, like Volkswagen’s Martin Winterkorn and Fiat Chrysler Automobile’s Sergio Marchionne, claim significant investments would need to be made to meet the mandate. Winterkorn specifically stated that for every gram of CO2 cut to meet the target, his company must spend €100 million ($140 million USD) “without knowing when these investments pay off.” Observers also claim that while bigger automakers can handle the investment, smaller ones would likely be crippled if not die-off in doing the same.

On the other side, critics proclaim that automakers have been obsessed with the apocalypse of their industry since the 1970s, when the first clear air bills became law. Every time, the industry has been able to meet the challenges before it, and continue to do so today with the use of turbos, direct injection and advanced transmissions.

Marchionne acknowledged those statements, but added that it would ultimately be put on the backs and wallets of the consumers who want the latest and greatest, emphasizing that it would be delusional to think otherwise.

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Next-Gen Chrysler Town & Country PHEV Debuting A Year Early http://www.thetruthaboutcars.com/2014/10/next-gen-chrysler-town-country-phev-debuting-year-early/ http://www.thetruthaboutcars.com/2014/10/next-gen-chrysler-town-country-phev-debuting-year-early/#comments Tue, 07 Oct 2014 10:00:50 +0000 http://www.thetruthaboutcars.com/?p=927345 Minivan shoppers will have a new option to consider in 2015, as Fiat Chrysler Automobiles CEO Sergio Marchionne revealed plans to introduce a PHEV variant of the Chrysler Town & Country late into the coming year. Automotive News reports the PHEV will be based on the next-generation Town & Country, originally scheduled for arrival in […]

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2014 Chrysler Town & Country

Minivan shoppers will have a new option to consider in 2015, as Fiat Chrysler Automobiles CEO Sergio Marchionne revealed plans to introduce a PHEV variant of the Chrysler Town & Country late into the coming year.

Automotive News reports the PHEV will be based on the next-generation Town & Country, originally scheduled for arrival in 2016 as stated by Marchionne during FCA’s investor day back in May. Other PHEVs are also in the works, including a full-size crossover for Chrysler. That said, Marchionne warns that electrification can’t fix everything:

I think you need to be very, very careful if you think that electrification, given its inherent limitations on range, especially in markets like the U.S., will effectively displace combustion. It will never provide the travel distance that you require, especially based on what we know today about the storage capabilities of batteries.

I keep on running into this fundamental economic obstacle of overcoming the cost equation of electrification. You can’t. You can’t unless there is a wholesale change and a fundamental shift in the pricing structure of cars.

The new PHEV, powered by a gasoline/battery pack combo, might outgun the Toyota Prius in the fuel economy game, according to Chrysler brand chief Al Gardner. The ur-hybrid in PHEV form for 2015 nets 95 mpg in electric-only mode, and 50 mpg combined in hybrid mode.

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Ferrari’s Annual Output To Increase Under Marchionne http://www.thetruthaboutcars.com/2014/09/ferraris-annual-output-increase-marchionne/ http://www.thetruthaboutcars.com/2014/09/ferraris-annual-output-increase-marchionne/#comments Fri, 12 Sep 2014 12:00:14 +0000 http://www.thetruthaboutcars.com/?p=911081 With the departure of Luca Cordero di Montezemolo from Ferrari, Fiat Chrysler Automobiles CEO Sergio Marchionne will become the premium brand’s chair next month, with the first order of business being to increase output to satisfy more demand. Bloomberg reports Marchionne will gradually increase annual output from 7,000 to a potential 10,000 units, proclaiming that […]

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With the departure of Luca Cordero di Montezemolo from Ferrari, Fiat Chrysler Automobiles CEO Sergio Marchionne will become the premium brand’s chair next month, with the first order of business being to increase output to satisfy more demand.

Bloomberg reports Marchionne will gradually increase annual output from 7,000 to a potential 10,000 units, proclaiming that by doing so, they would be able to match pace with the desires of Ferrari’s customer base, lest its waiting list grows too long “and people get tired.” For this year, deliveries are expected to rise 5 percent.

On the same day Marchionne becomes Ferrari’s new chair, FCA will begin trading in New York. While Ferrari is linked to the company — and is considered a defining brand for FCA — he says it won’t be a key brand over the long term.

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Ferrari Boss Steps Down As Marchionne Takes Control http://www.thetruthaboutcars.com/2014/09/ferrari-boss-steps-marchionne-takes-control/ http://www.thetruthaboutcars.com/2014/09/ferrari-boss-steps-marchionne-takes-control/#comments Wed, 10 Sep 2014 15:30:29 +0000 http://www.thetruthaboutcars.com/?p=910106 Luca di Montezemolo, who has headed up Ferrari for over two decades and presided over record profits, has stepped down amid in-fighting with Fiat head Sergio Marchionne. After joining Ferrari in the early 1990’s, di Montezemolo led a campaign to revitalize Ferrari, bringing in a lineup of vastly improved products and putting their Formula 1 […]

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Luca di Montezemolo, who has headed up Ferrari for over two decades and presided over record profits, has stepped down amid in-fighting with Fiat head Sergio Marchionne.

After joining Ferrari in the early 1990’s, di Montezemolo led a campaign to revitalize Ferrari, bringing in a lineup of vastly improved products and putting their Formula 1 team back on the road to success. Under his stewardship, Ferrari dominated the latter half of the 1990’s and early 2000’s, with Michael Schumacher, Ross Brawn, Rory Byrne and other motorsports all-stars working as one of the most dominant Formula 1 outfits in history.

In addition to their on-track success, Ferrari also found great financial success in the now ubiquitous merchandise licensing deals that were spearheaded by di Montezemolo, which has allowed Ferrari to maintain a lucrative revenue stream despite capping production of the cars at 7,000 units annually.

But that wasn’t enough for Marchionne, who publicly criticized di Montezemolo’s performance in Formula 1 this past week. Speculation is rife that Marchionne wants to expand Ferrari’s production volumes to help it compete with Lamborghini, which many fear would dilute the brand’s exclusivity.

On the other hand, the departure of di Montezemolo, who is credited with introducing milestone vehicles like the 355 (which replaced the dreadful 348), is being seen as a turning point in the brand’s history. Marchionne has never had experience running any premium brands, and Ferrari is one of FCA’s few profit centers. But many fear that this delicate balance will be permanently disrupted.

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Marchionne: Alfa Romeo Still Not For Sale http://www.thetruthaboutcars.com/2014/07/jaguar-reveals-face-2016-xe/ http://www.thetruthaboutcars.com/2014/07/jaguar-reveals-face-2016-xe/#comments Thu, 31 Jul 2014 12:00:53 +0000 http://www.thetruthaboutcars.com/?p=876841 Fiat Chrysler Automobiles CEO Sergio Marchionne is open to forming new alliance with other automakers as far as cost-savings are concerned, but he maintains that Alfa Romeo is not for sale. Automotive News Europe reports Marchionne said as much during a conference call regarding Fiat’s Q2 2014 earnings, reaffirming the parent company’s commitment to Alfa […]

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Fiat Chrysler Automobiles CEO Sergio Marchionne is open to forming new alliance with other automakers as far as cost-savings are concerned, but he maintains that Alfa Romeo is not for sale.

Automotive News Europe reports Marchionne said as much during a conference call regarding Fiat’s Q2 2014 earnings, reaffirming the parent company’s commitment to Alfa Romeo and proclaiming his company is not “in the business of brand-trading.”

Said commitment includes a €5 billion ($6.7 billion USD) investment to help the premium brand become a sought-after global brand of eight new models — underpinned by the upcoming Giorgio RWD/AWD platform — with annual sales of 400,000 by 2018, up from 74,000 in 2013.

As for alliances, Marchionne is open to the idea, though nothing is on the table as of this writing.

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Lancia Languishing On Life Support, Down To One Model http://www.thetruthaboutcars.com/2014/05/lancia-languishing-on-life-support-one-model/ http://www.thetruthaboutcars.com/2014/05/lancia-languishing-on-life-support-one-model/#comments Fri, 23 May 2014 16:15:47 +0000 http://www.thetruthaboutcars.com/?p=829538 Notably absent from FCA’s 5-year plan was Lancia. The Italian brand known for iconic models like the Aurelia, Fulvia and Delta Integrale will be pared down to one model that will be sold in Italy only. Lancia currently offers the Ypsilon subcompact, the Delta hatchback, the Thema (based on the Chrysler 300), and the Voyager […]

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Notably absent from FCA’s 5-year plan was Lancia. The Italian brand known for iconic models like the Aurelia, Fulvia and Delta Integrale will be pared down to one model that will be sold in Italy only.

Lancia currently offers the Ypsilon subcompact, the Delta hatchback, the Thema (based on the Chrysler 300), and the Voyager (based on the Chrysler fans). A report by Bloomberg confirms that after this year, only the Ypsilon will remain. Lack of demand, a weak car market in Europe and intense competition from a record number of brands all conspired to bring about Lancia’s downfall – not to mention an odd, ill-defined lineup that failed to establish a rock solid identity or any semblance of a value proposition.

That identity has so far kept Alfa Romeo from the same fate as Lancia – even though they arguably suffer from the same external forces. But that’s allowed Alfa Romeo to establish a tenuous foothold in global markets, while Lancia’s appeal is confined only to its home country.

 

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QOTD: Skin In The Game http://www.thetruthaboutcars.com/2014/05/qotd-skin-in-the-game/ http://www.thetruthaboutcars.com/2014/05/qotd-skin-in-the-game/#comments Thu, 22 May 2014 14:07:07 +0000 http://www.thetruthaboutcars.com/?p=828754 With negotiations between the UAW and the Big Three set to open next year, FCA head Sergio Marchionne has already fired the first shots, calling for an end to the two-tier wage system and a new pay structure, tied to profit-sharing. Speaking to Reuters, Marchionne discussed his plan to eliminate the two-tier structure, replacing it […]

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With negotiations between the UAW and the Big Three set to open next year, FCA head Sergio Marchionne has already fired the first shots, calling for an end to the two-tier wage system and a new pay structure, tied to profit-sharing.

Speaking to Reuters, Marchionne discussed his plan to eliminate the two-tier structure, replacing it with a yet-untested system

“The way you do this is you grandfather the Tier 1s,” Marchionne said of the veteran workers. “You make them a dying class and you build a Tier 2 structure that sets the wage mechanism for the next generation.

“When you have a bumper year, you pay them as much as a Tier 1 would make if not more,” he added of the lower-tier wage scale. “But if I’m in the toilet because the markets are down or GM is successful, or Ford, and then we go down in earnings, then I think at the end of the day you share the pain with the company.”

While the UAW did not comment on Marchionne’s proposal, the UAW has historically been against two-tier wages as well. In my view, Marchionne’s proposal is interesting, in that it lets the hourly workers have some “skin in the game” when it comes to their own financial success, as well as a feeling of pride and accomplishment when FCA succeeds. Given that FCA’s American units like Jeep and Ram are practically carrying the company, the intangible elements would be a strong motivator – of course, it also leaves workers exposed to managerial incompetence, the prospect of other business units dragging down overall performance or both. Let us know what you think in the comments.

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