Sergio Waits by the Dream Phone After VW Boss' Remarks
Sergio’s waiting by the phone. Waiting for someone to call him up and tell him he’s not alone. (Our apologies to Soul Asylum – Ed.)
It’s not our fault Fiat Chrysler Automobiles CEO Sergio Marchionne’s corporate life resembles a game of Mystery Date. That’s just the way it is for an automaker on the prowl for a partner. After having its advances repeatedly rebuffed by General Motors, FCA has now latched onto Volkswagen as a potential suitor — but the merger dance hasn’t been a smooth one.
After some cattiness on VW’s part, it seems the eternally — and perhaps naïvely — optimistic Marchionne’s hopes are once again up. He’s anticipating a call.
“We are waiting with anticipation,” Marchionne told reporters today, according to Reuters.
It seems that Marchionne could be reading too much into comments made by Volkswagen Group CEO Matthias Müller last week. Still, stranger things have happened. Perhaps Müller is being coy with his true intentions, playing hard to get to keep up appearances. What is certain is this past month’s weird non-courtship between FCA and VW has played out in a very rocky “Becky told me something after science class” kind of way.
After telling reporters, “I have no doubt that at the relevant time VW may show up and have a chat,” Marchionne’s advance met a cold shoulder. “We have other problems,” the VW CEO said when questioned, clearly not interested in a first date, let alone a marriage.
Both automakers face a number of issues.
VW, after taking a huge financial hit from the diesel emissions scandal, is desperately seeking to flesh out its U.S. utility vehicle lineup.
FCA, on the other hand, has struggled to wrestle down longstanding debt. Some brands, like Chrysler and Dodge, are lagging, while all available cash has been funneled towards to developing new utilities vehicles and trucks. Also, there’s still no takers on FCA’s goal of partnering up to build cheap compact cars in Mexico or elsewhere.
Last week, VW was suddenly in the mood to downplay its comments. On the topic of merger talks, Müller claimed, “I have never said I would exclude it.” (Company) size doesn’t matter to him, he added. Still, the German executive voiced his wish that his would-be Italian flame not go running to the media every time he has a thought. The media trumpeted that comment as an open line to VW HQ, and not as the backhanded remark in which Müller intended it.
Still, Marchionne may just take up that invitation. After explaining he expected the phone to ring at any time, the CEO said, “I haven’t seen Müller in 6-7 months, but I will go find him at the first opportunity.”
To be a fly on the wall of that meeting…
[Image: Fiat Chrysler Automobiles]
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I think this deal will happen. VW has been weaken led by dieselgate and is not strong in the US. They also have said in the past that they want Alfa. Alfa would easily integrate into Audi and could share lots of parts. Jeep and Ram would be great catches for VW. Chrysler could rebadge most of the SEAT/ Skoda Range and enjoy enough success to make it worthwhile. That leaves Fiat which is strong in Italy and Latin America. The simple solution might be to pull Seat out of markets where Fiat is stronger and then simply make Fiat what Vauxhall is to Opel. VW is also weak in the Dacia type of market and India but I guess that's why they have just agreed a partnership with TATA Motors. Maybe they are thinking of another acquisition at a later date...
Why? So the Chrysler group can financially destroy other companies by putting out junk that nobody but patriotic lunatics want to buy? If VW were smart, they wouldn't give them a second look as they don't need any more financial burdon. Daimler kept them on life support for a decade and all it did was contribute to Mercedes-Benz's darker days, of rusty, problematic cars. If it were me, I'd close down Dodge and Chrysler, sell Jeep to GM or Ford (assuming they'd want that garbage to add to their own portfolios of horribly built cars), and sell FCA's italian arm of Fiat, Alfa Romeo, Maserati, and Ferrari, to a Chinese owner like Geely or Indian owner like TATA. Those two companies have done wonders for Volvo and Jaguar/Land Rover respectively. I swear, the Detroit auto industry is going to hell in a handbasket. First with GM pulling out of the European market, and now with FCA wanting to merge with another company. These companies are in HUGE trouble.