Will Fiat-Chrysler Become An American Firm?

will fiat chrysler become an american firm

CEO Sergio Marchionne certainly suggested as much in a speech at the NADA convention over the weekend, in which he said

Who knows? In the next two or three years, we could be looking at one entity. It could be based here

From the perspective of the American taxpayer, this would certainly be the favorable outcome. After all, Fiat didn’t put a single Euro into the restructured Chrysler, and national bailouts don’t usually result in the expatriation of the bailed-out firm. But the US Treasury department isn’t the only master Fiat has to serve, and Marchionne’s suggestion that the Fiat-Chrysler alliance has touched off something of a “firestorm.” The Financial Times reports that

Pierluigi Bersani, leader of the [Italian] opposition Democratic party, demanding an explanation from Mr Marchionne said it was unacceptable for “Turin and the country to become a suburb of Detroit”.

Industry Minister Paolo Romani adds [via the Montreal Gazette]

The head of the carmaker must remain in Turin

And with Italian backlash against a possible Detroit headquartering of the Fiat-Chrysler alliance building, Marchionne is backpedaling furiously.

Italy, after all, has a much stronger traition of government involvement in industry. Most of Italy’s largest multinationals are at least partly owned by the government, as indeed Fiat once was. Fiat-Chrysler’s response: to tell Italian politicians that the Alliance is actually looking at

regional headquarters in Turin, Detroit, Brazil and possibly Asia.

And that approach seems to have softened at least some of the opposition in Italy, as Labor Minister Maurizio Sacconi tells the WSJ

If there is a merger between Fiat and Chrysler, I think the group will inevitably have one headquarters in the U.S. and one in Ital. What matters insofar as Fiat’s roots in this country, is that it carries out its planned investments, because these represent choices that can’t be reversed for a long time

Practically speaking, Chrysler’s stakeholders have some time to hash all of these disputes out: Marchionne says a full alliance could be several years away. Still, as Fiat and Chrysler move closer together, Marchionne will have his hands full trying to balance the competing interests of his government partners and national constituents. After all, as much as Americans want to see Chrysler become part of a US-based alliance, Italians have only one national mass-market automaker… and they won’t be happy if Fiat is no longer an explicitly Italian automaker. We’ll be watching closely as Sergio Marchionne takes on those concerns when he addresses the Italian parliament on the 15th of this month.

Join the conversation
  • Philosophil Philosophil on Feb 07, 2011

    Sorry, I'd like to write something but I can't stop laughing at the picture....

    • See 1 previous
    • Thebeelzebubtrigger Thebeelzebubtrigger on Feb 07, 2011

      Someone's having a blast with photoshop. Pretty funny results, too.:) As to the question of Fiat-Chrysler becoming an "American company", hey why not? Aren't at least half the "American" companies functioning today actually foreign investment vehicles that work by taking US assets out of the US?

  • Mr Carpenter Mr Carpenter on Feb 07, 2011

    Setting up a conglomerate Corporation based in Nevada would not necessarily be a stupid idea, given the low taxation there. The "HQ" could be there (with a few lawyers and accountants), while the "North American Engineering and Automotive Management Group" could be in Auburn Hills, Michigan, and the "European Engineering and Automotive Management Group" could be in Turin. The Automotive Admin HQ (ie the real HQ) could be in WINDSOR, ONTARIO... which would make it possible for Marchionne to live there w/o any hassles from Uncle Sugar.

  • Bryan Raab Davis I actually did use the P of D trope, but it was only gentle chiding, for I love old British cars of every sort.
  • ScarecrowRepair The 1907 Panic had several causes of increased demand for money:[list][*]The semi-annual shift of money between farms and cities (to buy for planting and selling harvests)[/*][*]Britain and Germany borrowing for their naval arms race[/*][*]San Francisco reconstruction borrowing after the 1906 earthquake and fire[/*][/list]Two things made it worse:[list][*]Idiotic bans on branch banking, which prevented urban, rural, and other state branches from shifting funds to match demands. This same problem made the Great Depression far worse. Canada, which allowed branch banking, had no bank failures; the US had 9000 failures.[/*][*]Idiotic reserve requirements left over from the Civil War which prevented banks from loaning money; they eventually started honoring IOUs illegally and started the recovery.[/*][/list]Been a while since I read up on it, so I may have some of the details wrong. But it was an amazing clusterfart which could have been avoided or at least tamed sooner if states and the feds hadn't been so ham handed.
  • FreedMike Maybe this explains all the “Idiots wrecking exotic cars” YouTube videos.
  • FreedMike Good article! And I salute the author for not using the classic “Lucas - prince of darkness” trope, well earned as it may be. We all know the rap on BL cars, but on the flip side, they’re apparently pretty easy to work on (at least that’s the impression I’ve picked up). On the other hand, check the panel fits on the driver’s and passenger’s doors. Clearly, BL wasn’t much concerned with things like structural integrity when it chopped the roof off a car designed as a coupe.
  • Mongo312 Had an 89SE, 92SE and an 03SE all with stick. The 03 took almost 3 months to find because there were so few produced with a manual transmission and dealers didn't want to give them up. Ended up buying one from a dealership in San Antonio and having it shipped here to St Louis.