Weekend Head Scratcher: Should Fiat-Chrysler Be An Italian or American Company?

Edward Niedermeyer
by Edward Niedermeyer
weekend head scratcher should fiat chrysler be an italian or american company

Though the the impact of nationality on the auto industry may be fading, the issue couldn’t be more central for Sergio Marchionne and his Fiat-Chrysler Empire. Having accepted aid from both the Italian and American governments, the future merging of Fiat and Chrysler raises a delicate question: will a merged Fiat/Chrysler be an Italian or American firm? When Marchionne suggested that the Fiat-Chrysler alliance could be headquartered in Detroit, Italy erupted in recriminations. The Italian government called Marchionne onto the carpet to explain himself, even as critics lashed out saying

The government is moving too late, but better late than never. Marchionne is more oriented strategically toward the U.S. than Europe

And sure enough: Fiat restated its commitment to investing some $27b into Italian production, but as AFP reports

the question of whether Fiat would remain based in its birthplace of Turin remained unclear, with local officials saying it had been put off for three years and would depend on the company’s performance.

But, while American and Italian stakeholders bicker over the “national character” of a merged Fiat-Chrysler, the proposal establishing four headquarters in Turin, Detroit, Brazil and “somewhere in Asia” points to the real issue: Fiat-Chrysler must orient itself around its markets, not any national corporate character. The longer the divide between Italy and the US is played up, the more Fiat-Chrysler runs the risk of developing a dysfunctional corporate culture like the DaimlerChrysler “marriage of equals.” It’s just too bad that, by tying itself up with the governments of the USA and Italy, Fiat allows the “national character” question to take such prominence.

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6 of 24 comments
  • 340-4 340-4 on Feb 12, 2011

    I don't care, really, as long as they keep doing what they are doing. Put a stick in the Charger SRT-8 and I'll pay them to do whatever they wish.

  • Jaje Jaje on Feb 12, 2011

    I really don't care - Chrysler pretty much only sells cars in N. America and Fiat in ROW. Customers are not dumb and will know if that Fiat with a Dodge badge on it is, well a Fiat (and vice versa). Keep them separated and don't badge engineer cars across the brands.

  • Djn Djn on Feb 12, 2011

    I'll wager that all of this is a part of Sergio's struggle to make Fiat's Italian manufacturing rational and his battle of the Communist controlled Italian unions.

  • Trend-Shifter Trend-Shifter on Feb 12, 2011

    Chrysler, a subsidiary of the Fiat holding corporation, headquarters USA. Fiat, a subsidiary of the Fiat holding corporation, headquarters Italy Alfa Romeo, a subsidiary of the fiat holding corporation, headquarters Italy Fiat-Chrysler China, a subsidiary of the Fiat holding company, headquarters China Etc..... Confuse the heck out of everyone, but have them run as separate business units. Have transparent accounting so that it is clear where the profits are generated. Assign a head to each subsidiary reporting to Mr. M...... Each business unit manager will need to put the best business model together using the resources of all the groups. Mr. M..... to orchestrate. Dealers around the world should sell all 3 brands. Import/export the mix based on currency, manufacturing, and market conditions.

    • See 1 previous
    • Bobman Bobman on Feb 13, 2011

      Agreed…and, of course, the same would apply to Brazil. I think it would be hard to think of Chrysler to be anything but American. The use of some Fiat platforms and power trains are just additional options available to the American Chrysler engineers. It seems that his is where Sergio has been guiding the relationship so far. There are strengths from each of the four that could combine to make a very competitive multinational that could allow Sergio to achieve his goal of his six million units a year. I think they can do it. Good luck.