By on April 5, 2017

Toledo Ð August 23, 2010 Ð Chrysler Group LLC CEO Sergio Marchionne, center, Complex Manager Mauro Pino, right, and more than 800 UAW-represented employees welcomed Vice President Joe Biden, left, to Chrysler's Toledo Assembly Complex, home of the new 2011 Jeep¨ Wrangler, Image: FCA

About half a decade ago, FCA honcho Sergio Marchionne welcomed then-Vice President Joe “Lunch Bucket” Biden to the Jeep Toledo plant to celebrate all things Jeep. It was rather warm August day outside, but even hotter in the assembly plant where everybody’s favorite “uncle,” hair plugs and all, was decked out in a suit and tie. Marchionne, on the other hand, was “sporting” his signature blue wool sweater.

I was writing a politics blog for the Detroit News at the time, and I urged Mr. Marchionne to give his sweater shtick a rest. Why? Well, when the “Number Two” for the United States shows up in a suit, you look disrespectful in a sweater … even if it is from Nordstrom. Worse yet, I pointed out, it had to be hotter than hell in a wool sweater in an assembly plant humming with new vehicle production.

Up to that point, I was duly impressed with the Canadian-Italian and his rescue of my former employer. He was smart, funny and all-too-quotable. Most importantly, he had asked his Chrysler colleagues to work their butts off to save the company, and his minions quickly saw nobody worked harder than Sergio as he chain-smoked his magic on the often down-and-out company.

Marchionne did what former CEO Bob Nardelli couldn’t do in the former Home-Depot-throw-off’s two-year “Reign of Error.” Marchionne didn’t just lead the members of his team. He got in the trenches and inspired them.

Fast forward to late 2016 through today, and I’m asking myself: Is Marchionne a “loon” or a “boon” for FCA’s future?

Out-of-the-blue months ago, Marchionne was the lead cheerleader in the need for further consolidation of the global auto industry, and was seemingly driving around General Motors HQ in Detroit with a bullhorn announcing a potential tie-up with the Motown behemoth. In fact, he seemed more like a Girl Scout selling cookies (Samoans, love them) outside your local grocery store. It was as if he would not take “No” for an answer, although “No” was uttered loud, clear, and often from General Motors CEO Mary Barra.

This looney courting gave many of the folks inside FCA an uneasy feeling; that the company might be headed for the dirt farm — again. You must realize some long-timers who are still at the company-formerly-known-as-Chrysler have faced corporate bankruptcy four times in their careers. For many, it was like a scene out of Poltergeist: “They’re here!”

The consolidation pitch made a lot of media and analysts scratch their heads and, of course, it led to all kinds of dire speculation and nasty criticism of Marchionne’s methods in screaming from the mountain top.

Still, Marchionne isn’t the first CEO to very publicly call for a consolidation between two auto companies.

Kicking the tires
Sure, the “Merger of Non-Equals” between Daimler and Chrysler in 1998 was a secret, behind-the-scenes deal that took the automotive world by storm. That storm would later engulf the two companies, leading to Chrysler being given to Cerberus Capital Management — a deal that ultimately proved the private equity guys are not always the smartest guys or gals in the room.

But back in 1999, good ol’ DaimlerChrysler was considering the purchase of bankrupt Nissan Motor Company. If fact, it forced Nissan to pull up its kimono and let it see everything regarding the state of the Japanese company. It wasn’t pretty. At the 11th hour, DaimlerChrysler pulled out of the deal and Nissan was left at the altar — pregnant and without hope.

As Obi Wan said to Yoda: “There is another.” That “another” was Carlos Ghosn and Renault. Renault had been hugely public in its desire to take control of Nissan should the Germans pull out prematurely. Ahem.

The rest is history.

Renault/Nissan went on to, as Borat would say, Great Success! DaimlerChrysler crumbled. The Germans, in less than a decade, lost faith in Chrysler and threw the Americans to the curb. After a bankruptcy, Chrysler was “given” to Fiat as part of the U.S. government bailout of Chrysler and GM. Enter Sergio and his infusion of blood, sweat, tears, smokes, and — contrary to popular belief — a lot of money to right the ship.

So, Marchionne may not be that looney in his desire for consolidation, after all. Or is he?

Let’s be friends
Just a few weeks ago, he threw out the possibility of a deal with VW, which was quickly dismissed by the folks in Wolfsburg. VW? Really? Had some engineer implanted a “defeat device” in Marchionne’s brain? Why would you publicly talk about joining forces — at this time — with the poster boys for cheating in the auto industry? Maybe in a year or two, but now? At least wait until VW comes up with a fix for its serial deception, which should come sometime in the next decade. Geez.

Marchionne’s talk of working with VW wasn’t necessary looney, but the timing was weird considering General Barra’s rebuff. If you’re keeping score regarding consolidation with GM or VW, Marchionne is not necessarily a “loon,” but he might be screwing with everyone.

Debt-free or bust?
Marchionne says he remains as committed in 2017 as he was in 2014 to the achievement of FCA’s 2018 targets, and “this remains the single largest objective that the FCA management team has in front of it because completion of the ’18 plan would do two things.” FCA would make significantly more money than it’s making now, and — here’s something the folks at “Chrysler” may have not heard in a long time — it actually renders FCA debt-free.

As Marchionne put it succinctly, “We have gone a long way in the last ten years but the ability to effectively extinguish all of our debts is something which remains a key objective.”

Has he given up on that consolidation thingy?

“The better way to run this business is by consolidating forces, keeping a multi-brand environment that faces the customer and that effectively shares all the essential elements of design and manufacture of cars on a commissioned basis as much as is possible,” he recently said.

In almost the same sentence, Marchionne continues, “I’m pursuing nobody. I haven’t gone out to chase anybody.” Um, OK, whatever.

Some on Wall Street are getting back on the Marchionne bandwagon. Said analyst Max Warburton of Bernstein Research, “We are initiating coverage on FCA with a market-perform rating. FCA has made far greater progress than we anticipated a few years ago. We accept we need to eat another slice of humble pie given the achievements of 2016. But will we need to eat the whole pie — and even our hat — come 2018? Marchionne continues to insist he will deliver his financial target. Increasingly, the market seems to believe it’s going to happen — and perhaps we need to accept it too.”

Perhaps analyst George Galliers of Evercore ISI said it best: “Have we gone ‘mad’? To follow in the footsteps of FCA CEO Marchionne and reference Lewis Carroll, we don’t want to go among mad people, and we’re sure ‘the best people’ usually aren’t mad. However, the day has come to upgrade FCA from sell to buy.”

Jason Vines is a former automotive industry PR professional who’s worked for Chrysler (twice), Nissan, and Ford — during the Firestone tire crisis. He went on to work for Compuware in Detroit, before diving into the complex world of Bible publishing. He’s the author of “What Did Jesus Drive?: Crisis PR in Cars, Computers, and Christianity” and co-author of “The Last American CEO,” a behind-the-scenes account of Chrysler’s purchase of American Motors. He currently resides in North Carolina.

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55 Comments on “That’s Off-The-Record: Is Marchionne Trying to Pull the Wool (Sweater) Over Chrysler’s Eyes?...”


  • avatar
    FreedMike

    “However, the day has come to upgrade FCA from sell to buy.”

    This on the heels of FCA’s weird market position indicates…they think someone’s gonna buy the company.

  • avatar
    dukeisduke

    Are you over here now, Jason? Are you going to be a regular? I remember when you were over at Ford.

  • avatar
    dukeisduke

    Jason, when it comes to Marchionne, are you of the same mind as Peter De Lorenzo? By the way, he’s got a great Rant this week about the sorry state of car advertising.

    • 0 avatar
      Jason Vines

      I used to hate Sweet Peter D. We have a huge internet fight in 2006. (Ah, he was wrong, usually.) However, somehow we became and ARE great friends. He is correct about 95 percent of the time. When he is wrong, he is so, so, wrong. Kind of like me. I think his brutality towards Marchionne is wrong. Chrysler, coming out of bankruptcy was once again on death’s door. I like the fact he got rid of segments the company has NEVER been competitive in. Having sad that, if, big if, we have another oil shock, Chrysler is dead — in part to Sergio’s Jeep/Ram strategy. Oh, and as I mentioned in my piece, I think the Alfa Romeo play is dumb.

  • avatar
    nguyenvuminh

    I must admit, I tried to follow the article but can’t quite understanding the conclusion.

    • 0 avatar
      OldManPants

      Yeah, referencing Lewis Carroll was strangely appropriate to my rabbit-hole feeling as I tried to maintain interest.

      But then it’s just about FCA and I’m reading it at work.

    • 0 avatar
      Jason Vines

      Sorry I failed in making a coherent point for you. My bad. Here it is: Sergio is highly criticized for the consolidation cry. He should probably do this behind the scenes, but, in the end, he’s probably right. In the meantime, he has served Chrysler well.

      • 0 avatar
        JimZ

        even before the Daimler days, it was inevitable that Chrysler was going to have to partner/merge/sell to someone.

        Pity that they stumbled into probably the worst possible deal.

        • 0 avatar
          Vulpine

          Worst possible deal: Daimler

          Best recovery deal: Fiat.

        • 0 avatar
          Lorenzo

          That wasn’t inevitable at all. In 1997, Chrysler’s worldwide sales were nearly 3 million vehicles, and it had a net profit of nearly $3 billion, with a cash hoard of almost $7 billion, and its pension was fully funded.

          It had a partnership with its suppliers who saved the company billions, and its design teams adopted the American Motors system which nearly duplicated the efficient Japanese system.

          Lee Iacocca himself said his worst mistake was choosing GM lifer Bob Eaton over Maximum Bob Lutz as his successor. Eaton sold out the company to Daimler and and all the talent Iacocca and Lutz had acquired left the company, unable to work with their imperious German overlords. The rest, as they say, is history.

          • 0 avatar
            ect

            +1, Lorenzo. I was a C-suite executive in a Tier 1 supplier at the time. Chrysler’s Supplier Cost Reduction Effort was absolute genius compared to the arbitrary abuse that GM doled out.

            When our sales reps called on GM and Ford in the late 80s-very early 90s, the fact that we had business with Chrysler was almost a negative. By 1993, the same GM and Ford folks were pumping our guys for info on what was going on at Chrysler. And at about that time, Chrysler became significantly more profitable than GM and Ford – even while it was completely renewing its product line.

            During the years prior to the sale to Daimler, Chrysler was widely regarded as significantly the best managed of the Big 3. And justly so.

            As we see time after time, it takes a lot of people working hard and smart to make a business successful, but one guy in the right position can do enormous damage. Eaton was that guy.

        • 0 avatar
          Jason Vines

          Without Daimler, Chrysler would have gone bankrupt in 2002, alone. Bye-bye.

          • 0 avatar
            ect

            “Without Daimler, Chrysler would have gone bankrupt in 2002, alone”

            Huh? What data supports that assertion, Jason?

            Chrysler became increasingly profitable every year after 1991 and became the most profitable of the Big 3 as early as 1992 – a position it maintained until the acquisition by Daimler.

            How would that have changed in only 4 years?

  • avatar
    heavy handle

    Two factors at play here.

    Chrysler is the perennial #3 in the US market; they are always outnumbered when the conversation is run by “Ford vs. Chev” types. I’ll bet we’ll see lots of evidence of that here.

    Sergio talks a lot, but he also gets things done once in a while. People tend to assume that he’s just a big talker with little substance (like most leaders who exhibit this trait). He knows his fundamentals: profit, debt, running costs, market share.

  • avatar
    hreardon

    Sergio is right to want to merge, and though the press may call his actions ‘hamfisted’, I think we’re selling Sergio a bit short.

    Frankly, the logical mashup here really is with Volkswagen: they need a heavy truck presence in North America, and let’s be frank: Jeep and RAM are the jewels.

    The issue, of course, is overcapacity and scale. Volkswagen has no need for Italian factories, nor Chrysler’s automobiles. FCA would never just sell off Jeep and RAM since they contribute almost all of the profits to the company, regardless of the dollar figure such a sale could garner.

    If I were Herr Mueller in Wolfsburg, I’d be looking for ways to write a deal that replaced Fiat platforms with MQB product and figuring out how to negotiate the political and regulatory bologna that they’ll face in Italy.

    • 0 avatar
      bullnuke

      Volkswagen may have already begun efforts toward a “truck presence” in the US. Late last year they purchased 16.6% of Navistar, a company that is building not only its own brand but GM trucks under contract as well.

    • 0 avatar
      FreedMike

      I’d say a more logical approach would be product sharing, versus a merger. Both VW and FCA have a large number of dealerships in this country. A lot of their dealers would have to be bought out and closed. I’d imagine the same is true (and might be even more relevant) in Europe, where both Fiat and VW are far more popular.

      Then again, they’ve tried the “sell rebadged FCA products as VWs” approach before, haven’t they?

      https://en.wikipedia.org/wiki/Volkswagen_Routan

      Not such a big success, as I recall. VW’s customer base isn’t going to have much interest in Ram pickups, either.

      I suppose FCA could rework VW compact/medium size car platforms, but what sense does that make when they already have their own platforms?

      Prediction: Chrysler and Dodge die, and Ram/Jeep survives, to be bought out by a Chinese company.

    • 0 avatar
      Jason Vines

      hreardon: My point? Sergio, work behind the scenes to pull this off and stop advertising your intentions. It smells of unnecessary desperation.

  • avatar
    arj9084

    I assume FCA has basically decided to throw away Chrysler at this point. Dodge, I’m not sure of what they want to do beyond producing ancient Daimler based cars with huge engines. What I can’t figure out is how they have elected to pour untold funds into the Alfa brand domestically (based on 2 niche models competing basically with Audi), while essentially letting the Chrysler/Dodge brands rot. Are there any actual new products slated for Dodge in the next few years/ever?

    My assumption is that they don’t care and just want 2 main global brands to ‘merge’ into another automaker’s operations somehow; Jeep and Alfa (I don’t get or care about Fiat, but whatever. I guess the mazda-spider/mini-suv thing might work if they ever stay out of the shop for 60 or more days). Ram is easy enough to keep going with trucks/vans (or spin off and let them also sell SUV’s or something like that).

    • 0 avatar
      bikegoesbaa

      I suspect that for much of the American buying public the Chrysler/Dodge brands are so tainted and fundamentally undesirable that it’s either impossible to rehabilitate them or not cost-effective to do so.

    • 0 avatar
      heavy handle

      Your comment makes little sense in the 21st Century. Platforms are shared now, brands are no more than that (branding).

      There is no such thing as Chrysler vs. Dodge vs. Alfa. That’s a distraction to keep the punters happy. They are all variations on the same platforms. That’s the only way to make money in the mass-market car business, and everybody does it (not just FCA).

      You may think that the Impala, Regal, and XTS are different cars, but they are the same car as far as GM is concerned. The only difference is how much people will pay, like First, Business, and Econony class on a flight. Same thing with Alfa/Chrysler/Dodge, once the FCA product plan works it way through the system.

    • 0 avatar
      LXbuilder

      “producing ancient Daimler based cars with huge engines.”

      As in the two best selling large sedans in America in spite of their age? And their 3.6 V6 is as efficient as anything else in it’s class.

    • 0 avatar
      Jason Vines

      Chrysler brand is all-but gone. But, that’s OK. There was no American Motors brand. (Sorry for the crappy analogy.) I thought Chrysler was super stupid to pull Ram away from Dodge. Wrong! It was like Arthur Anderson creating Accenture. The latter survived the accounting industry meltdown. Sergio is rightly focusing on Jeep and Ram…and maybe the (Chrysler) Pacifica, which is a terrific vehicle. Where this will end? I don’t know. But, I would not bet against Sergio, except on the pasta brand, Alfa.

  • avatar
    Vulpine

    Despite what many believe, Marccione has proven he can move cars; just not necessarily the ones people think he’s trying to move. We’ve seen FCA create two different Jeep models now that are remarkably popular and effectively dominating sales for the brand and their class. A third one has just hit the market (first sale of the new Compass in the US a couple days ago) and another is due later this year (the redesign of the Wrangler.) Additionally, Jeep is making strong inroads in the European market and showing at least some movement in the Asian market.

    Meanwhile, despite the reported reliability issues, Maserati and Alfa showed a surprising surge this last month that seems to go counter to their long-held reputation for poor quality. While I expect the massive surge for Alfa to be short-lived (huge percentages fall rapidly as raw numbers increase) it does demonstrate a demand for real style in the automotive market as well as performance. To be blunt, American and Japanese sedans carry a mix of ugly and/or boring.

    Unfortunately, I’m still not a fan of the majority of FCA’s dealerships; they’re abusive to both their customers and their OEM when operated by a franchise conglomerate. Mom & Pop dealerships and more specialized (single brand) operations seem more friendly and accommodating, resulting in better sales by comparison.

    • 0 avatar
      FreedMike

      Maserati and Alfa’s “surprising surge” can be summed up thusly:

      Alfa: they finally have something to sell that’s not a $90,000 two-seat “exotic” with a plastic interior and switchgear that feels like it came off one of these electric powered mini-Escalades that you get at Toys ‘R Us. Too bad it seems to have reliability problems. Say it ain’t so.

      Maserati: OMG, WE HAVE A CUV NOW!

      And when the market catches on that both cars are good-looking, poor-running crap – and they are – the surge will be over.

      • 0 avatar
        Vulpine

        I’m not so sure about the “poor running”, they seem to be pretty strong cars–both brands. I’ve also not heard that many complaints about the Maserati’s reliability and they’ve been in-country for over five years now. The Alfas have yet to generate any •new• reputation in the States, though with two review sites complaining about garage queens while the other three give it superior performance marks, we’ll have to wait and see how they develop.

  • avatar
    pmirp1

    Sergio is still leagues better than Bob “I only care about myself” Nardelli (The GE culture).

    But he and the family running Fiat are not in it for the long run. Why else spend all this money on Alfas when they are pretty much irrelevant. I can say the same about Maserati. Or trying to push Fiats here. What’s the point?

    Instead we are still waiting for high end Jeeps, there are no replacements or real refreshes for the 300 and Charger and Challenger, no small or mid-size truck for RAM, and both Chrysler and Dodge are on death beds.

    Sergio should stop selling Alfas and Fiats here. He should consolidate Chrysler and Dodge into one brand (Dodge is what makes sense), and every time Jeep makes an SUV, make a equivalent for Dodge, and build that mid size and small truck. Make it the Jeep-Dodge brands. Consolidate RAM into Dodge. Time to consolidate and save on marketing, branding, and the various parts/staffing that have to be created for the different brands other than Jeep and Dodge.

    • 0 avatar
      FreedMike

      Sergio should not stop selling Fiats and Alfas here. He should start selling Fiats and Alfas that are up-to-snuff quality wise instead. If he can do that, then he’s got something. Otherwise, both brands will skulk back to Italy, like they did the first time.

    • 0 avatar
      TwoBelugas

      “Instead we are still waiting for high end Jeeps, there are no replacements or real refreshes for the 300 and Charger and Challenger, no small or mid-size truck for RAM, and both Chrysler and Dodge are on death beds.”

      A high end Jeep is a fool’s errand. You are not going to pry Escalade buyers away based on merit.

      For 300/Charger/Challenger, what can be done to refresh them? Perhaps a more fuel efficient drive-train but at 19/31 they are pretty efficient and even Toyota can’t get more than 21/30 on the highway without going to hybrids. They do weight 4-500 lbs more than Avalons but RWD weighs more.

      • 0 avatar
        Whatnext

        A high end Jeep seemed to work just fine with the Grand Wagoneer for years, indeed still does, for those who pay north of $50k for a restored one.

      • 0 avatar
        MLS

        Jeep already sells $60K+ versions of the Grand Cherokee. They won’t have any trouble selling higher priced Grand Wagoneers.

        300/Charger/Challenger are fully class competitive in every regard but (small front overlap) crash worthiness. The fuel economy, technology, powertrains, refinement, etc. are all there.

    • 0 avatar
      AoLetsGo

      “pmirp1” I am with you about “Bob” he was a total blank, blank de blank. My main objection to this article was refering to Bob as Home Depot. His reign at HD was thankfully short, as you say he was part of the GE culture.

  • avatar
    -Nate

    So much Monday morning quarterbacking .
    .
    I’m keen to see how the FCA thing shakes out ~ they’ve been staggering along since 1957 that I remember, always managing to totter on a little bit longer .
    .
    I have zero ideas what they should do, I just don’t want them to fail and go away forever .
    .
    -Nate

  • avatar
    arj9084

    I don’t see why my post was taken to demagogue platform sharing as a concept. Chrysler and Dodge haven’t gotten any new product since the Daimler divorce, other than stunted/discontinued 200 and Dart efforts. Eventually, it’s about product. The Alfa Q5 and Gulia are great looking cars they’re spending a small fortune to promote in the US for what are, ultimately, tiny sales.

    The Fiat based Jeeps are great products for them, including the Cherokee. Maybe Dodge/Chrysler were just value-less and worth letting atrophy to death, but they started off throwing money at them instead of the Alfa launches…making one assume a change was made a year or two ago.

    Their only consistency is that ALL of their new product launches seem heavily plagued by reliability/quality issues.

    • 0 avatar
      heavy handle

      Arj,

      There’s a new minivan too, on top of the 200 and Dart. People also forget that FCA dealers have a lot of new Jeep models to sell under the same roof.

      The brand names are just signifiers. Dodge means entry-level/working class value. Chrysler means premium (compared to Dodge), Jeep means SUV/CUV, RAM means truck. Not sure what Fiat means now, it used to mean urban-sophisticate, but they blew that one big time.
      All of those “brands” are sold in the same shops and made in the same factories.

      My point is that there’s a product plan happening. It took a long time because the previous owners had nothing ready to go.
      People can talk all they want about “money spent on Alfa,” but those same RWD platforms will be sold as Dodge, Jeep, and probably Chrysler. It won’t happen overnight, nothing does in the auto industry.

      • 0 avatar
        FreedMike

        The problem with Dodge and Chrysler is that they’ve had two key products – a compact and midsize sedan – introduced in that time, both based on Fiat products, and they both bombed horribly. That’s why those brands are dying.

        I don’t see how that gets blamed on “the last administration.”

        • 0 avatar
          heavy handle

          The Dart was rushed into production because they made a commitment to release a 40MPG car within a specified timeline when they took over Chrysler. It was already dead by the time they got the engines and transmissions that actual buyers would have wanted.
          The 200 is one of the few market mis-reads they’ve made. It’s a decent car in a shrinking segment where Chrysler doesn’t have much brand equity (unlike the minivan segment, for instance). Its only saving grace is that the Cherokee is a huge hit, so much of the R&D will be paid back.

          If you think that FCA is the only brand to ever mis-read the market, have a look at US-market Cadillac and Buick sedans over the past 10 years. The XTS did OK (because the R&D was paid-for by Opel and Saab), but everything else was an unmitigated flop.

          • 0 avatar
            FreedMike

            So…OK, the Dart bombed because they had to make one that averaged 40 mpg. Fair argument. But at the same time, they never bothered to make one the market would actually want, despite having all the parts in the bin to do so at the time the car came out (i.e., the 2.4 Tigershark with the six-speed automatic).

            So, no, I don’t buy the “blame CAFE for the Dart failure” argument. That problem could have been avoided.

            The real reason the Dart died? The compact segment is ruthlessly competitive, and the Dart never measured up. I drove one last fall, and it’s not bad, but given Dodge’s bad rep in this segment, the Dart needed to be brilliant. It wasn’t. Ditto for the 200.

            Again…FCA has no one to blame but itself for the Dart and 200 dying, and without those two cars, Dodge and Chrysler are basically zombie brands (well, maybe the Pacifica shows some hope for Chrysler, but with no other new product coming, what’s the future there?).

          • 0 avatar
            Vulpine

            “So…OK, the Dart bombed because they had to make one that averaged 40 mpg. Fair argument. But at the same time, they never bothered to make one the market would actually want, despite having all the parts in the bin to do so at the time the car came out (i.e., the 2.4 Tigershark with the six-speed automatic).”

            I would disagree. The problem lies almost solely with the fact that the reviews of the MPG model stick to ALL Dart models, whereas people who bought one (not MPG) not knowing about the review loved them and had no complaints about performance. But remember, it wasn’t CAFE that demanded the 40mpg model first; it was the active administration at the time trying to put barriers in the way of FCA buying Chrysler with a seemingly impossible task. (That was before Obama took office.)

          • 0 avatar
            heavy handle

            It wasn’t a CAFE thing, it was a condition of sale. Fiat had to commit to some milestones in order to satisfy the car czars (or whatever they were called).

            I’m sure that they would have offered the 2.4/torque converter combo at launch if it was ready. All they had for the first few months was the 1.4T and manual, then 1.4T with dual clutch auto, then the gutless 2.0.
            The 2.4 only showed-up much later, when the car was already a flop.

            That’s all water under the bridge now. FCA has had a bunch of hits in its short history, and they’ve shown a willingness to cut their losses on their misses.

  • avatar
    LS1Fan

    Here’s the problem: FCA cannot invest in improved product and pay off debt at the same time.So he can either make the company a more appealing merge prospect. Or he can improve the product-but not both.

    Cutting costs by eliminating duplicate capital resources between the US and Euro sides of the house won’t work either, not if the UAW can help it.He can’t just end the American divisions either for the same reason-any financial gain from shuttering Dodge or Chrysler would be burnt up in advanced litigation from our favorite auto workers’ union.

    So the next approach is broaden the scale. Acquire another car company and use their resources to improve the FCA mothership. While the resulting company would still have the systemic issues of the current firm,it does make an appealing short term stock investment .

    • 0 avatar
      FreedMike

      …”any financial gain from shuttering Dodge or Chrysler would be burnt up in advanced litigation from our favorite auto workers’ union.”

      If that happens, then all the union will be able to do is fret about it. They can’t sue to keep it in business or some such nonsense.

  • avatar
    Chocolatedeath

    Man Jason , I haven’t read anything from you since your Autoline days…used to love you on the night showing.

  • avatar
    rpol35

    “Marchionne, on the other hand, was “sporting” his signature blue wool sweater.”

    I thought they were black? Yes I do agree, inappropriate attire in some circumstances, regardless of color. He pulled the same stunt earlier in the year at a White House meeting.

  • avatar
    stars9texashockey

    Speculation on whether the sweater is brilliant or an idiot is a waste of time. In every survey of quality/reliability, virtually all of FCA’s products are in last place. This isn’t a new phenomenom. They’ve had ample time under various owners to fix this.

    As far as brand equity, Ram still has it, but Jeep is quickly losing it. Dodge, Chrysler, Fiat and Alfa Romeo are irrelevant.

    • 0 avatar
      Jack Denver

      Maybe the reason that they haven’t fixed it is because it isn’t fixable with the resources that they have available to them. Whichever company was at the bottom end of the US auto industry always had either (a) quality problems or (b) was selling obsolete product or both. It’s hard to say which is the cause and which is the effect – it runs both ways.

  • avatar
    Ol Shel

    I’m glad we’re finally free of hair-insecurity in the executive branch…

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