Bailout Watch 532: ChryCo Merger Promising For Fiat Suppliers

Edward Niedermeyer
by Edward Niedermeyer

American-owned supplier firms, not so much. Automotive News [sub] reports that Fiat’s plans to replace Chrysler’s entire “car lineup” with its own models creates an opportunity for Italian supplier firms to steal business from their American competitors. You know, the ones which would have created a “death ripple” in the American economy if Detroit were not bailed out way back in December. Chrysler’s last merger was “a catalyst to bring more German suppliers to North America,” says Michele Vannini, North American head of Italian engine maker VM Motori S.p.A. “The same thing can happen for Italian suppliers with Fiat and Chrysler.”

Fiat subsidiary suppliers Magneti Marelli, Teksid and Comau are considered to be among the best positioned Italian firms. All three are established in North America, and could compete with American supplier giants like Visteon and ArvinMeritor. Of course, given Chrysler’s abysmal supplier record (the Plastech debacle leaps to mind), competing for Chrysler business is a little like fighting over the last piece of pork tartare: at the end of the day, winning only nets you a parasite. Meanwhile, an engineering firm competing for homologation work reveals that “nobody at Chrysler or Fiat knows yet which products will be built, or when. The company does not expect firm answers until autumn.” Which means the “18 month homologation” clock still hasn’t even started ticking yet.

Edward Niedermeyer
Edward Niedermeyer

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  • Autojunkie Autojunkie on May 18, 2009

    As a matter of fact, I do remember "the Plastech debacle". None of that was Chrysler's fault as your comment states. Plastech made inferior products that were returned from the assembly plants on a regular basis and they couldn't manage the financial side of the business even when they were bailed out by Chrysler during a boom period. Plastech couldn't figure out how to pay it's own suppliers on time, which caused late deliveries to a just-in-time manufacturing world. Plastech was the ONLY parasite in that "debacle".

  • Akear Akear on May 18, 2009

    Well, the US auto industry has pretty much hit rock bottom. Even the Italians reign supreme. Question of the day. Can the US remain the world's remaining super power without a decent domestic auto industry?

  • Lw Lw on May 18, 2009

    Odd that people expected something different. It would take billions of dollars from Fiat just to maintain the current dismal sales that Chrysler has / had. To truly "fix" Chrysler and make it self sufficient would require Fiat to invent a brand new segment and control the price of it for years. On the scale of the original minivan. Neither is going to happen.. Fiat doesn't have the money nor the desire to do either. They want plants that can produce Fiats, dealers that can sell Fiats and suppliers that can deliver Fiat parts to Fiat plants. I bet they sell Jeep to Ford shortly after the deal completes to raise cash.

  • Robert Schwartz Robert Schwartz on May 18, 2009

    “nobody at Chrysler or Fiat knows yet which products will be built, or when." I thinkt the smart money is on the under.

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