By on September 2, 2017

2017 Jeep® Wrangler Unlimited Sahara - Image: Jeep

He came to watch a race, but Fiat Chrysler Automobiles CEO Sergio Marchionne took some time out from a busy Saturday at the Italian Formula One Grand Prix to squash some rumors.

You know the ones. Reports emerged last month that Chinese automakers were hanging around FCA’s door, just waiting for a chance to sweep the company off its feet. An unnamed company pitched a buyout offer, the story goes. Not high enough, FCA allegedly responded. Another company, Great Wall Motors, isn’t interested in FCA, just its lucrative and growth-poised Jeep division.

Is a Chinese-Italian-American automaker in the works? Will the buck one day stop in Beijing or Shanghai, instead of at the desks of Auburn Hills executives? Hardly, says Marchionne. No one wants to dance with FCA.

The chief executive replied, “No,” when asked whether another automaker has approached the company, or whether there’s an offer on the table, Reuters reports.

Lord knows FCA’s tried. The years-long wooing of General Motors’ Mary Barra went nowhere, and Volkswagen brushed off Marchionne’s merger advances in a typically brusque fashion. Despite claiming he has no interest in pursuing a merger with VW, the two companies are reportedly engaged in early talks for a potential van and truck partnership.

Of course, just because there’s no offer hanging in the air doesn’t mean FCA won’t find itself at the negotiating table sometime in the near future. The automaker is presently attempting to streamline (“purify,” in Sergio speak) its portfolio in anticipation of just such an opportunity.

FCA’s component’s division is an obvious target. “There are activities within the group that do not belong to a car manufacturer, for example the components businesses,” Marchionne said Saturday. “The group needs to be cleared of those things.”

One thing not in the spinoff file — at least, not yet — is the company’s Maserati and Alfa Romeo divisions. While Marchionne wants FCA’s parts division gone by the end of 2018, its two Italian luxury marques aren’t mature enough to leave the family home, he claims.

“The way we see it now, it’s almost impossible, if not impossible, to see a spin-off of Alfa Romeo/Maserati, these are two entities that are immature and in a development phase,” Marchionne said. To attract offers, interested automakers must be assured of the brands’ ability to generate profits. With Maserati going electrified in the near future and Alfa struggling to reach sales predictions (and with its new product push only just getting underway), FCA couldn’t expect top dollar for the two marques.

[Image: Fiat Chrysler Automobiles]

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27 Comments on “No One’s Kicking the Tires on Fiat Chrysler, Marchionne Says...”


  • avatar
    Vulpine

    I could see some good and some bad here. Spinning off parts, i.e. MOPAR, could be a good thing as it could specialize in parts across the entire brand spectrum and potentially offer far more capability for ALL the FCA brands or focus just on the Dodge, Jeep, RAM brands.

  • avatar
    MoDo

    Someone else could run Mopar (parts) better than they could. They use to have a 3″ thick Mopar parts catalogue – but if you tried to actually order something it usually wasn’t only not in stock, it wasn’t even made and they couldn’t tell you if it ever would be. At least for the performance side of things it’s been like that for years, if not decades.

    • 0 avatar
      Lorenzo

      Performance parts have always been a special animal at Chrysler. They’re usually limited run parts that engineers gave parts numbers to, but aren’t normally carried by Mopar.

      A friend of mine worked on a Plymouth Superbird with the 426 hemi and needed a part unique to that engine for that model. FYI he didn’t own the car, he just worked on it for the owner.

      He couldn’t get it from Mopar, but was told it could be ordered from the factory only through a dealer’s service department. He got the part, but the owner had to order it, and had to include the chassis number of the car.

      The Superbird was a very limited production race car with highly specialized parts, so it might not be quite what you mean by performance parts. But I wouldn’t be surprised if some factory performance parts never get into the Mopar system, leaving it to the aftermarket to fill the gap.

      I kind of wonder if they do that to avoid some kind of liability. Whenever I see something done strangely, I always suspect lawyers are involved.

  • avatar
    civicjohn

    I tend to think that over time, 3D printing will fill a lot of parts holes. Won’t be genuine MOPAR NOS, but probably good enough to keep that Town and Country good for a while.

    He needs to share what he’s smoking if he thinks he can hang on to Alfa and Maserati and offload the crap brands (I think we all know what they are). Surely somebody can fix the Alfa reliability issues – Job 1 could be to get it in a country that, shall we say, might want to show up a bit more and try to do some quality work. I know the history folks would consider that sacrilegious, I understand, I only get San Marzano DOP for my marinara sauce – but they don’t grow Alfas, they build them.

    I wish I really knew what Marchionne wants to do when he grows up. Maseratis continue to show up more and more in my neck of the woods, so they have to be doing something right. Even Alfas are showing up more, but there are only so many poor reviews – based solely on build quality – that any small volume company can survive. I still can’t believe he hasn’t screwed up Jeep yet!

    • 0 avatar
      28-Cars-Later

      “I still can’t believe he hasn’t screwed up Jeep yet!”

      What Jeep have you been looking at?

      • 0 avatar
        civicjohn

        Not saying the current crop on the lot are wonderful vehicles, my 15-year old daughter has her eyes set on a Wrangler with the “Dual Top Group”. She’s 15 and will drive it 3 miles to her high school. No problem.

        Moving forward, give them time with the current management, accountants, bondholders, and shareholders, and Jeep might find they are in deep do-do with some of those good old boys.

        Flame on – Jeep does not work as a single entity with no one else having input.

    • 0 avatar
      JDG1980

      Alfa and Maserati (and Fiat) *are* the crap brands.

      • 0 avatar
        civicjohn

        But they could make a profit if built properly! I can’t understand why that is so hard to understand!

        I would consider an Alfa, I’ve had my share of Lexus and BMWs, always want to be pleased by a new experience!

    • 0 avatar
      dmoan

      Sergio has screwed up Jeep badly it’s just that people have nostalgia with that brand and tend not to see it.

      Cherokee, Renegade and GC are all bottom of reliability charts and I went to drop my Cherokee to dealer for 10th time for repair and I already see new Compass being brought in for warranty repairs. Some things never change.

  • avatar
    28-Cars-Later

    The real issue is any foreign firm which buys a controlling stake or purchases outright will inherit a sh*tshow complete with only one real global brand, UAW/Italian unions, a mismanaged model lineup, and whatever debt the Agnelli’s have piled on to it. The main reasons to own this company are the rights to Fiat, Ferrari, Jeep, and to a lesser extent the light duty and commercial truck lines. Everything else is just a headache and if a foreign firm were to buy FCA to dismantle it, be ready for an angry Presidential tweetstorm if not US gov’t action preventing it. FCA is a poisoned chalice and if there are suitors out there willing to deal with it, I suspect they are waiting for the company to implode first.

    • 0 avatar
      JDG1980

      Ferrari has already been spun off, and Fiat is essentially a worthless brand. Jeep and Ram are the real prizes.

      What a lot of people don’t realize is that, despite FCA’s pretensions as a global automaker, they’re getting pretty much all their profits from North America. Here is the Q2 2017 breakdown: 1,350 million euros in profits in North America; 60 million euros in profits in the Latin America region; 44 million euros in profits in the APAC region; and 200 million euros in profits in the EMEA region. This means that over *80 percent* of FCA’s profits are in North America. And in turn, it means that since the Italian brands are essentially a non-entity in North America, Fiat, Alfa Romeo, and Maserati could all be dropped without substantially impacting FCA’s overall profitability.

      And the UAW isn’t really a problem here. The worst UAW legacy costs were ditched as part of the Chrysler bankruptcy.

      • 0 avatar
        Manic

        Right you are, but one should also remember that €300m, 20% of Q2 profits which are non-NA, must be from something else than selling US-vehicles. As AR and Maser are very niche it has to be FIAT brand which brings in that money. Ok, they sold nearly 140k locally made Jeeps in China (2016) via 50/50 JV, but not many US trucks or cars anywhere else in the world.

    • 0 avatar
      civicjohn

      +1

  • avatar
    Oberkanone

    Jeep and Ram will be the only North American brands with tires to kick unless FCA invests in product for Dodge and Chrysler.

  • avatar
    SCE to AUX

    You can’t sell or spin off losers anymore.

    GM simply closed Pontiac, Oldsmobile, Saturn, Hummer, and Saab.

    Toyota killed off Scion.

    Chrysler killed off Plymouth.

    Ford killed off Mercury.

    One exception: Volvo was lucky to get picked up by Geely.

    I suspect if FCA wants a partner, that mythical partner will have to take the bad with the good, and then kill off the bad. FCA won’t be able to shed the bad stuff first.

    • 0 avatar
      CarDesigner

      You do NOT know what you’re talking about. Pontiac outsold Buick 3:1, Saturn was turning around after being starved for product, & Olds was so poorly marketed, it became a joke, despite good product like the Aurora and Bravada. FYI, the Fed Car Czar killed those brands because the y wanted to steer & control the market to “green” and econoboxes.

      Scion sucked and was insulting to it’s demographic.

      Plymouth was a low priced competitor and planning geniuses had been trying to kill it for years. When they finally did, the brand cost Chrysler 400,000+ lost sales. Showed them!

      Mercury was killed for the same kind of thinking and Ford sales did NOT recover from that loss. Mercury was not allowed to develop, or be marketed well.

      Hummer was not PC for the GM PR department. It could have been their Jeep brand since they stole the Jeep face for $75,000. Only an idiot, not a savant, would see any fit with the bloated GM product line.

      Mergeronni has never had a succession plan. Just milk the Chrysler cow dry and kill it. The lying High Command out of Stuttfart, did that for 9 years! De-branding storied 70-90 year old marques shows all you need to know about FCA1

      • 0 avatar
        civicjohn

        Ha!

        What, Buick didn’t have a Firebird with a freaking eagle on the dash? My best friend got a Trans-Am as a senior year present and he walked on water with all of the cheerleaders!

        Saturn Turnaround?!! Since the “owner’s parties” were just down the road, I went to a few, felt like Woodstock without the drugs…

        Yeah, everybody lusted over a cool Plymouth…

        Whaat in the heck did Mercury bring to the party – wait, I’ll answer that – nothing.

        Hummer should have done a co-marketing plan with Viagra. Yet, they could have built some awesome stuff if they would have just figured out that it can’t occupy more than 1.25 of a standard 2-lane highway.

        I’d like to know what in the heck is left to milk from Chrysler – Corinthian Leather?

        Regarding branding, um, when did the Tesla name come into play? Certainly not 70-90 years ago! And I’m not anywhere close to being a fan-boy of Tesla.

        Excuse me, I need to get back to my Atari 2600 computer, I’ve got work to do.

      • 0 avatar
        Vulpine

        You know, CD, you started out great and I was agreeing with everything you said. Then you had to add that last paragraph and you ruined it all. Marccione has done more for the Jeep brand, Alfa and even Maserati than almost anybody else in the last 30 years.

  • avatar
    geozinger

    The Agnellis and Marchionne have put FCA in a precarious position, it seems unlikely a white knight will emerge and clean up this mess. I don’t know enough about FCA’s operations to comment intelligently on the sale of the parts divisions, but it seems like they’re selling off more chunks of business that I would think would be essential to running a global manufacturing effort. Even after the bailouts, GM managed to bring back some of the former Delphi operations in to the flock.

    During the dark days of the GFC, there was talk about Magna making a bid for Chrysler. I have to wonder if all of this flailing around by FCA hasn’t attracted Mr. Stronach’s attention again. Of course, I’m sure the MBAs surrounding him have analyzed any takeover attempt as an exercise in reducing a large fortune to a small fortune.

    But, that is one organization that I think could take on the global scope of FCA. It’s not like Magna doesn’t already make components for just about everybody and everything, and they have a familiarity with Chrysler products, having assembled Euro-spec Chryslers in the 80’s and 90’s.

    Sadly, I predict a long, slow, tortuous death for FCA. I’d better get my 500 Abarth while I can…

    • 0 avatar
      87 Morgan

      Depends on how you define slow and tortuous.

      I think the demise will happen relatively quick. Fiat/Alpha dealership owners will give the signs back and re-allocate the space to a venture, any venture, that actually generates traffic and profit. Once this starts, others in their 20 groups will follow suit.

      FCA will quickly get back to what they once were in the US: C/J/D/RAM (I still get irritated with the RAM, fold that back in with Dodge), which is a salable entity to someone.

      • 0 avatar
        Vulpine

        Personally, I think FCA was screwed when they were forced to re-instate hundreds of dealerships they’d pulled their license from when they took over the Chrysler brands. Many, if not most, of those dealerships had poor sales for a reason; they tended to be highly abusive to their customers and their OEM. I’ve witnessed this activity for myself with one of the larger FCA dealerships near my home (yet others at least seem to be treating their customers right, if not the OEM.) The problem seems big enough that a brand-new FCA dealership opened within easy miles of two other dealerships and so far is doing pretty well for itself, pulling business away from the others simply by its presence and no noticeable direct challenges to the others in advertising.

    • 0 avatar
      CarDesigner

      The non-Mopar businesses are overpriced in value and product.
      Mopar has been a good profit source, but are forced to return really high margins, so for a product like a name brand belt, they are 50% higher for the exact part!

      The killing of dealerships was political, NOT economic. We saw several good Detroit area stores closed, because they didn’t support 44. The entire GM & Chrysler bankruptcy was caused by the Fed’s intransigence with bogus mortgage, banking, and insurance scams, that no one went to jail for. When ALL bank loans dried up, no consumer or corporate loans were available, then bam! A crash not seen since 1929!

    • 0 avatar
      civicjohn

      Yeah, that 500 Abarth is a keeper. Drain the fluids, put it on blocks, and now THERE is a retirement strategy!

  • avatar
    el scotto

    Will the 4cyl turbo Alfa compete with leased BMW’s? Maserati is still exotic for most peopple. Both have few dealers. The 500 is a fun little car to hoon but it’s still a little car. Grand Caravans and Rams will steadily and quietly sell. 300’s, Chargers and Challengers will still sell, just not at the pace FCA wants them to sell. Remember the Avneger or 200? Neither do most people. FCA needs an Accord/Camry /Focus fighter. The Compass? Competing fiercely with Mitsubishi.

  • avatar
    Tosh

    Sergio must be a dingeling to think the race was on Saturday?

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