Editorial: Chrysler Suicide Watch 45: By Executive Fiat
C’mon. This whole Fiat and Chrysler hook-up is a joke, right? I mean, what could possibly motivate an Italian car company that got its ass kicked seven ways to Sunday in the US market for peddling sorry-ass rust buckets and [almost] providing some of the worst dealer service in the history of four-wheeled transportation to re-enter the fray under the Chrysler banner? That’s like Kodak teaming-up with Polaroid to make high end digital cameras for the Japanese. Like Cambridge’s instant photo folk, ChryCo’s business model is so busted all they’ve got left is an iconic brand name (Jeep). And there are still plenty of Americans who know that Fiat stands for “Fix It Again Tony.” So what’s it all about Alfetta?
Explanatory theories are floating through the autoblogosphere. The Fiat – Chrysler plan is an Italian head-fake. They’re having a peek at what they can buy when pennies from C11 heaven start to fall. Or Fiat’s “rescue” plan is a cunning ploy to use U.S. taxpayer money to fund Fiat’s American aspirations. After all, they got $2b from GM for not merging with GM. With inflation, that’s got to be worth at least $8b in today’s freshly-printed dollars. And then there’s a far more likely motivation for all this Mopar madness: ego.
The US car industry is a “yeah, too quiet” kinda place these days. The Presidential Task Force on Automobiles (PTFOA) has done the cappo si tutti cappo thing at GM: silencing Car Czar Bob Lutz and cashing ex-CEO Rick Wagoner’s bankruptcy-proof pension check. Wagoner’s clone, an overpaid caretaker who goes by the name of Fritz Henderson, has all the charisma of four-day old cod fish.
Ford CEO Alan Mulally is the same again, only fresher and more swordfish-like (if you know what I mean). And having learned that discretion is the better part of a $240m severance package, Chrysler CEO Bob Nardelli has sent out a memo saying, “Him! Let him run the company! Or them!”
In short, the American automotive industry doesn’t have a single charismatic spokesman at this, its hour of need. Which no doubt suits PTFOA chairman Steve “Chooch” Rattner. But it doesn’t alter an immutable fact: the auto industry is an ego-driven business.
Remember when we were discussing the strategy of Kirk “The Lion of Las Vegas” Kerkorian (ready to chill with Walt Disney), as his major domo (arrigato) Jerry York joined GM’s board and told them to sell something, anything, before the lights went out? Or the going, going, Ghosn GM – Renault merger?
That was then, and this is now. Now we have Sergio Marchionne. The Italian auto exec’s stolen the spotlight. He’s busy holding court—I mean chairing meetings. Issuing pronouncements. Making ultimatums. Flying hither and yon in Fiat’s private jets (yes, they still have them). Scheming. Dreaming. Coveting ChryCo’s CEOship. And putting on a show for Fiat’s shareholders.
To wit, the Wall Street Journal reports that “Italian carmaker Fiat SpA (F.MI) shares surged over 10% in Milan Friday, as investors expect a deal between the Torino-based company and Chrysler to be finalized by the end of April.”
How a ChryCo hook-up will help Fiat’s CEO achieve his profit target ($1.3b for 2009) in this moribund market is anybody’s guess. But the limelight does wonders for Marchionne’s rep in his native Italy, insulating him from the sales disaster waiting for Fiat’s politically-fixed sales incentives to expire.
Lest we forget, Sergio is, like Wagoner and Henderson, an accountant by training. Who started his career as a tax specialist. In other words, Marchionne’s a man whose craves attention not to say adulation. Which motivates the Canadian – Italian to rush in where any sensible corporation fears to tread. No, really.
“Canada was a mixture of pain and pleasure for the Italian teenager,” Canada’s Globe and Mail reported in a Marchionne profile. ‘Trying to get friendly with girls with whom you cannot communicate was a problem,’ he said.”
Surely this isn’t all about appearances, is it? Don’t call Sergio Shirley.
“The [Fiat] board room has a frescoed ceiling that would not look out of place in the Vatican Museum,” the Globe reports in a more recent article. “Coffee is served in fine china on a silver tray. The employees make sure the place is well stocked with Murattis.”
And so, here we aren’t. Chrysler’s private equity owners tried to dump the failed American automaker on China’s Chery (Hornet much?). Cerberus then tried to off-load their automotive non-fortunes onto Nissan (Hornet that, Titan this). And now they’re trying to palm off the whole schmeer on Fiat. Well, the U.S. government really. With the help of an egomaniacal Italian who either knows better and doesn’t care, or should.
Of course, you could say that the same thing about all parties concerned with this, Chrysler’s final fling, before it slinks off into that long goodnight.
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- Fred The bigger issue is what happens to the other systems as demand dwindles? Will thet convert or will they just just shut down?
- Roger hopkins Why do they all have to be 4 door??? Why not a "cab & a half" and a bit longer box. This is just another station wagon of the 21st century. Maybe they should put fake woodgrain on the side lol...
- Greg Add me to the list: 2017 Sorento EX AWD w/2.0 Turbo GDI 68K miles. Changed oil religiously with only synthetic. Checked oil level before a rare long road trip and Ievel was at least 2 quarts down. That was less than 6 months after the last oil change. I'm now adding a quart of oil every 1000 miles and checking every 500 miles because I read reports that the oil usage gets worse. Too bad, really like the 2023 Tuscon. But I have not seen Hyundai/Kia doing anything new in terms of engine development. Therefore, I have to suspect that I will ony become a victim of a fatally flawed engine development program if I were to a purchase another Kia/Hyundai.
- Craiger 1970s Battlestar Galactica Cylon face.
- Master Baiter "...but the driver must be ready to step in and take control. The system is authorized for use during the day but at speeds lower than 40 mph..."Translation: It's basically useless, and likely more stressful than piloting the car ones's self.
Really, Fiat will be able to pick and choose which parts of Chrysler they want and easily dispose of those they don't? They will be free of any of the liabilites that normally come with acquiring a company? The 50 different states that control franchise law will easily let them simply close dealerships and waive the liabilities that normally hit companies without a CH11 restructuring? I don't see why allowing interested dealers to apply for and build new dealerships will take longer than culling the existing over-large Chrysler, Dodge, and Jeep dealers to a sustainable number. That said, I think Fiat leadership has shown themselves to be very savvy businesspeople... and in the case of GM, 2 billion examples of such. They must know more about this deal than we do. Then again, there was that Mercedes merger of equals...