By on June 29, 2018

FCA sign, Image: Fiat Chrysler Automobiles

Fiat Chrysler Automobiles won’t comment on a report claiming Hyundai Motor Group plans to launch a bid for the automaker, but that’s what sources with knowledge of the matter tell the Asia Times.

The sources claim HMG CEO Chung Mong-koo is biding his time, waiting for FCA’s stock to fall before moving forward on the potential takeover. Reportedly, Hyundai could launch the bid within months.

FCA CEO Sergio Marchionne retires in April 2019, with his successor an unknown quantity at this time. If Chung Mong-koo truly wants a takeover, he’ll act before Marchionne steps down, the sources claim.

Apparently, the driving force behind a potential merger is Paul Singer, billionaire activist shareholder and Elliott Management principal. Singer holds a $1 billion stake in Hyundai. His ties to FCA are more personal, however. Singer recently took control of Telecom Italia, naming Alfredo Altavilla, head of FCA’s Europe, Africa, and Middle East regions, as one of its board members. Altavilla’s name has been mentioned as a possible Marchionne successor.

Apparently, there’s quite a bit of disagreement between Marchionne and FCA chairman John Elkann over who should fill the CEO’s shoes. “Marchionne is pushing for [FCA CFO] Richard Palmer, while Elkann wants an industrial CEO to take over such as Altavilla or [Ram/Jeep head] Michael Manley,” one FCA source told Asia Times.

The sources allege Elkann, who also heads Exor N.V. — an investment group controlled by the Agnelli family, which holds over 29 percent of FCA’s stock — is more interested in growing a media empire than controlling FCA. A merger with Hyundai would give FCA access to the electric vehicles its truck-heavy portfolio generally lacks. (The money-losing Fiat 500 EV, FCA’s only North American EV, was famously panned by a scornful Marchionne.)

Marchionne, of course, is very fond of seeking mergers. Potential tie-ups with General Motors and Volkswagen Group never got off the ground, but sources claim the CEO used interest from China’s Great Wall Motor “as a stalking horse” to catch Hyundai’s eye and soften the Trump administration’s reaction to a future, non-Chinese takeover.

As we said, the automakers aren’t talking, so we’re left waiting to see if anything comes of this.

[Image: Fiat Chrysler Automobiles]

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135 Comments on “Hyundai’s Getting Ready to Pounce on Fiat Chrysler, Report Claims...”


  • avatar
    Sub-600

    Hellcat Elantra!

    • 0 avatar
      tankinbeans

      Reintroducing the Neon using the Elantra as a platform seems like a reasonable idea.

      I seem to recall Neon being a strong seller.

      • 0 avatar
        Vulpine

        Why the Neon? Why not bring back the Dart as a proper coupe?

        • 0 avatar
          tankinbeans

          My impression is that the Dart name is poisoned for the time being and bringing it back so soon wouldn’t net any positive benefit.

          That being said I’m not a product planner, nor do I have any background in same. I could very well be, and probably am mistaken.

          • 0 avatar
            PrincipalDan

            There’s a Fiatsler Dart in the parking lot right now. A black on black Rallye edition. The center console is already cracked and the padding is showing through.

            Not impressed.

          • 0 avatar
            Vulpine

            The Neon had a reputation as being a flimsy, if popular, model. You simply don’t see many Neons on the road any more while you were still seeing old Darts in the 80s. Or maybe they should restore the Aspen as a coupe instead and wipe out that bad taste that the not-an-SUV Aspen gave us.

          • 0 avatar
            JohnTaurus

            You were still seeing old Darts in the 80s, which was the decade immediately after their most popular years. So, they were ~10 years old.

            The most popular years of the Neon works out to about 20 years ago (mid-late 1990s/early 00s), and the newest U.S./Canadian market Neon is 13 years old now.

            I’m not arguing that they’re not disposable little junkers, but they were still a very common sight when they were ~10 years old (going by their better selling years, because by 2005, they were not selling very well).

          • 0 avatar
            Vulpine

            I was talking 60s Darts, dude. In the 70s they became the Aspen and Volaré.

        • 0 avatar
          Sigivald

          Because a market of like four people isn’t really worth the R&D?

          • 0 avatar
            Vulpine

            What R&D? Just take one of the existing Mexican Fiats and rename it. As long as it’s not based on the 500 (in appearance) nobody will know the difference.

        • 0 avatar
          Lorenzo

          The original Dart was 195 inches long with a 111 inch wheelbase – a midsized car today, a compact family hauler in the 1960s. It’s main appeal, a bulletproof drivetrain of slant-six/318 and torqueflite, would be tough for FCA or Hyundai/Kia to replicate, though the chronically weak small bits are easily within their grasp.

        • 0 avatar
          sgtjmack

          Exactly.

      • 0 avatar
        gtem

        The interesting precedent is down in Mexico where the ‘06 era Accent was sold as the Dodge Attitude, crossbar grille and everything!

    • 0 avatar
      bd2

      May be getting an Elantra-N (if not the sedan, then the i30-N fastback).

      Really can’t see Hyundai bringing back the Dart or Neon for Dodge.

      Dodge will likely become a specialty performance brand (maybe even discarding Dodge for SRT) w/ just the Challenger and Charger.

    • 0 avatar
      dantes_inferno

      FCA will change its name to FCAH. Or HFCA. Or ????

  • avatar
    DeadWeight

    Sergio The Sweater can now co-bank much more than his 100+ million USD per year that the Agnelli Family pays him, while making the Agnelli Family Dynasty much, much wealthier –

    – if the Hyoooonday price is right!

  • avatar
    PrincipalDan

    Chrysler/Dodge/Jeep/Ram with longer warranties?

    This I am in favor of.

    • 0 avatar
      thegamper

      Bingo! I think this is nothing but good news. Hyundai gets full size trucks, Jeep. Chrysler LX vehicles can finally get updated and rebadge Genesis RWD platforms. I for one would be pumped to see a Stinger/Charger rebadge.

      Sedona merges with Pacifica. Chrysler and Dodge get a few competent FWD sedans, small crossovers. Chrysler and Dodge can essentially act as additional sales outlets for rebadged Hyundai’s, finally giving them a decent sized linup. I’m sorta thinking Hundai let’s Fiat die in the US.

      Interesting question….does Hyundai try to keep Genesis, Alpha Romeo and Masarati? I would think that is one too many. I could also see either the Dodge or Chrysler brand die.

      I like it. Especially with 100k warranty.

      • 0 avatar
        John

        Alfa and Maserati are redundant, one has to go, and I see Chrysler and Dodge become one, with Chrysler as the Luxury Brand with Genesis likely picking up the Imperial Name and Dodge the mainstream sporty brand, with Kia likely folded into Dodge. Fiat…Fiat what???

        • 0 avatar
          TwoBelugas

          At this point Chrysler has a very uphill battle to be a “luxury” brand when even Lincoln and Cadillac are still a shadow of their former selves after pouring untold billions into their fancy naming schemes. It’s real appeal is being a comfortable full size sedan accessible by anyone with a steady paycheck that pays more than ~20 dollars an hour.

          Go up market is a full’s errand when the market has been captured by either Germans(for those who lease) and Lexus(for those why pay cash for the ES and lease GS and LS)

        • 0 avatar
          Vulpine

          Alfa and Maserati are not redundant.
          Alfa is a luxury performance car that works more on the performance side than luxury. They’re typically smaller-bodied cars.
          Maserati is a performance luxury car that works more on the luxury side than performance. They’re typically larger-bodied cars.
          The Alfa’s trademark car is the roadster design–the 4C and 8C models that are remarkably stripped down in the effort to provide better performance and handling.
          The Maserati’s trademark car is the Quattroporte, a big luxury car with some real oomph under the hood. Yes, they both offer other models but there is little crossover between them. Someone shopping an Alfa is not likely to shop a Maserati, and vice-versa.

          • 0 avatar
            Lorenzo

            Actually, Maserati is a (relatively) poor man’s Ferrari, a supercar that should have been merged with Ferrari to achieve the volume Marchionne wanted, and keep Ferrari production limited and exclusive.

          • 0 avatar
            Vulpine

            No, the Maserati is notably larger and heavier than the Ferrari and built for luxury; I recommend you go look at one before comparing it to Ferrari. If anything, it’s the Alfa that’s the ‘poor man’s Ferrari’ as its halo model is aimed at the same kind of customer–someone wanting a sporty, 2-seat roadster that’s got some real ‘oomph’ even with the 4-cylinder version.

  • avatar
    87 Morgan

    How would this work out you think on the dealer level? Would it makes sense to have FCA be separate from the Hyundai stores? Obviously you have way more FCA stores than Hyundai, so this gets them presence in the rural markets.

    I think for FCA this is about the only merger that makes sense. I wonder if the Maserati bits and pieces would make their way underneath the genesis or vice versa?

    • 0 avatar
      TW5

      There probably isn’t a plan to make many structural changes, at least not now. All FCA mergers will necessarily revolve around combining fleets so FCA can avoid crippling penalties, and providing FCA with the hybrid systems it needs to keep Jeep alive.

      People don’t really understand how disruptive CAFE 2025 really is. It’s not just eliminating products. It’s eliminating entire companies.

    • 0 avatar
      Art Vandelay

      Jeep stays seperate, Dodge and Ram fold into Hyundai, Chrysler dealers keep the Pacifica, get a makeover, and become Genesis dealers. Done.

  • avatar
    Sub-600

    The zero down $149 a month Challengers will be nice.

  • avatar
    EquipmentJunkie

    Interesting.

    Makes me wonder about the long-term independence of Fiat’s capital goods-producing industrial CNH Industrial division, too. Those various divisions have been pre-sliced and packaged in the CNHi wrapper.

  • avatar
    Vulpine

    Personally, I don’t like the idea. Hyundai isn’t exactly noted for building popular vehicles and so far their truck idea has gone nowhere, despite the number of people clamoring for the Santa Cruz as originally shown. This could result in the total loss of the Chrysler/Dodge brands and serious damage to the Jeep brand–making an opening for Mahindra to bring in its own, more traditional Jeep underpinnings to a proper Jeep replacement.

    • 0 avatar
      aquaticko

      …You are aware the Hyundai has been the 3rd or 4th largest automaker in the world for about a decade now, right?

      • 0 avatar
        Vulpine

        Only because of the hamsters.

        And a ridiculously-long warranty that they’ve recently been forced to resume.

        • 0 avatar
          bd2

          Uhh, the only real large market for the Soul is the US.

          As for the longer warranty, how is that any different from Toyota including 2 yrs of “free” maintenance?

          In Austalia, Honda is currently offering a 7 yr warranty.

          • 0 avatar
            Vulpine

            “In Austalia, Honda is currently offering a 7 yr warranty.”
            — Shows that sales were starting to drop off, so they had to make it look like a better deal. Same for Hyundai in the US (and the only reason the Soul became popular was those hamsters.)
            https://www.youtube.com/watch?v=BNYzrmdzktk

          • 0 avatar
            bd2

            Again, the only market where the Soul really sells is the US.

            And last year, Kia had 4 models at or above the 100k sales mark – the Forte, Soul, Optima and Sorento.

            In addition, the Sportage is on track to sell 85k this year and worlwide, the Sportage is a much more popular model than the Soul.

            Automakers use longer warranties or “free” maintenance to sweeten the deal; but still, ultimately, it is the product that sells.

          • 0 avatar
            Big Al from Oz

            bd2,
            We have Souls in Australia.

          • 0 avatar
            Big Al from Oz

            Vulpine,
            Honda in Australia is not revered as the US. Mazda is strong in Australia. Honda seem to be competing with the Koreans here. Even Subaru is viewed better than Honda.

            My BT50 has retained its value better than any Toyota, except for 70 Series Landcruisers.

          • 0 avatar
            Vulpine

            Yeah, and guess what ain’t here in the States… that BT-50. Wouldn’t even bet on it after the Ranger hits the showrooms.

          • 0 avatar
            bd2

            @Big Al

            Yeah, I know, but the Soul doesn’t sell particularly well in Oz; neither does it in its own domestic market of SK.

            Pretty much the only market where it sells well is the US.

          • 0 avatar
            Big Al from Oz

            bd2,
            The Soul is not viewed as a competitive product. They might only sell 500 a year or so here.

            It looks cute and quirky but even to me we have better alternatives.

          • 0 avatar
            Vulpine

            @Big Al: Cute and quirky is what works for some people, that’s why I drive a Renegade; it’s visuals are an approximate throwback to the old 90s Cherokee as compared to the newer version being more… generic in appearance. I’m not a conformist; I choose what I choose for what they can do for me and offer some sense of individuality. That is why even my otherwise bone-stock ’97 Ranger has additional pin-striped graphics on it rather than the stark Oxford White with factory striping at the shoulder line, down its length.

            Other people do similar things, buying something different BECAUSE it’s different, then finding ways to make it more unique. The Soul has replaced the Nissan Cube as the cute box and is moderately popular here in the States.

    • 0 avatar
      Art Vandelay

      Ive put about 140,000 miles between 2 (2007 Tucson, 110k, 2017 Santa Fe, 30k) and I have not once had to use the warranty on any of them. Brakes, Timing Belts/Water Pump, and belts/hoses hoses around 70k. Heck the 07 had the original battery still when we traded it and it did 4 winters at Fort Drum. Yes they are appliances, but at least they are good appliances.

    • 0 avatar
      Art Vandelay

      And with respect to “The number of people clamouring” for the Sabta Cruz…I guess technically 7 is a number.

      • 0 avatar
        redapple

        KAI HYUNDAI make crap.

        IN Every category, there is a better vehicle from a competitor with a lower TOTAL cost ownership.

        Very poor driving dynamics, bad bounce / rebound, calibration,bad controls, tap up/down turn signals that ‘dong’ for FIVE tones and on and on.

        Near Honda prices for much less car. Resale values like a POS from Guadalajara Motors.

        Just say no to their crap.

        Dont tell me the stinger is a great car. For that price. NO>

  • avatar
    Jerome10

    I’m gonna laugh when this deal includes RAM and Jeep, and the rest of it gets left behind.

    That would really turn Sergio’s stomach. His dear Alfa, tossed to the curb with the carcass of Chrysler and Dodge.

    I don’t really see a future for C or D. Somewhat sad to see go, but like Pontiac or Oldsmobile, there is more in the past than there is now. Time to say goodbye unfortunately.

    And probably unfortunately to any future LX-type cars. This will be the biggest loss.

    Otherwise, what does Hyundai need besides RAM and Jeep?

    I’d personally rather see GM or Ford snag Jeep. Its meaningless in todays business world, but Jeep seems like it should at least stay “American” (yes I know FCA isn’t technically, but you know the leg lifting has all been done in Auburn Hills)

  • avatar
    DeadWeight

    At the rate inflation (real world) is running, along with added kicker of tariff-TALK (alone, yet to be action) that’s giving excuse to producers to raise prices, economy’s about to crash anyways.

    When you see pickup truck and SUV sales fall by near or double-digit percentages on YoY basis, just like in 2009-2010-2011, and incentives ramp up, it will be red flag.

    The pickup truck index is a simple yet remarkably accurate indicator of economic downturns in North America.

    • 0 avatar
      TW5

      Perhaps, but this isn’t grandpappy’s car market. The manufacturers have adopted the university model of pricing. Tuition = $100,000. Scholarship = $80,000. Net cost = $20,000. Wow, I’m getting a $100,000 education for only $20,000. What a deal!! Fake value proposition.

      Manufacturers are doing the same thing with these $50,000 trucks which all have $10,000 on the hood every holiday weekend. Incentives alone are not a strong enough corollary anymore.

      • 0 avatar
        DeadWeight

        Much to my chagrin, an acquaintance just bought a current gen (new) Silverado Z71 with a MSRP of $48,xxx for $38,xxx OTD.

        That OTD includes sales tax (6%), destination, etc.

        So that was closer to 13k off MSRP.

        Even then, it was $10,000 more than a comparably equipped 2010 Silverado Z71 (that one lacked a few electronics that weren’t available then, but roughly equivalent) that he sold private party.

        So, even with the stacked discounts off the monroney sticker, 10k more for nearly the same truck 8 years later is REAL INFLATION that is about to get worse absent a significant downturn similar to 2009.

        And that’s nothing compared to building/construction materials and labor inflation, which is a major problem for the construction industry right now.

        For those in this area, real, actual inflation has not been running this hot since the early 80s.

        Wait until interest rates really catch up.

        • 0 avatar
          redapple

          DW the sage is correct.

          The next recession will be more like 1929. Maybe 1861 once you add is the hyperbolic acceleration of the Call to arms, take the resistance to a higher level one political party is fomenting.

          $21 TRILL US Debt
          $81 Trill QE Debt.
          $300 TRIL unfunded national and local obligations.

          Math is math.

          USA is screwed. .
          Europe- you on you own sukka. We cant bail you out again.

        • 0 avatar
          Jerome10

          I’m gonna agree with DW as well.

          Live in a fairly rapidly growing part of Idaho, and have a good friend been in contracting for decades.

          He say’s he’s getting basic skills construction guys (not skilled trades etc) demanding pay raises from something like $25 up to $40 an hour, and if they don’t get it they find someone who will. Then on top of that he says many of them are out buying $50-$60k pickups.

          He says the number of holes in the ground for housing starts, lack of laborers for framing and such, ramp in material prices, the wage demands, the general insanity right now is EXACTLY what happened before the entire thing blew up in 2008. He’s bracing for the bomb any day.

          Car market softening. Housing prices are back to [email protected] (i mean absolute crapholes going for insane money for such garbage). Stocks flying high. And still running trillion dollar deficits while healthcare and education also go parabolic.

          Yeah, it is coming.

          • 0 avatar
            TW5

            @ Jerome10

            60% pay raises for unskilled hourly employees were not a precursor to the Great Recession.

            If we close the trade deficit, aggregate price will rise. That’s the point. We’re not paying for a bunch of people to sit on welfare so we can buy a Walmart sofa for an artificially cheap Chinese price. We’re paying prices that are akin to the equilibrium market price.

            If things are getting too expensive due to labor costs, it’s time to talk about healthcare reform, not recession.

          • 0 avatar
            bd2

            The undermining cause for the Great Recession was inflated prices for housing (tho, some markets never saw inflated prices and others like in AZ, CA, FL, NV, etc. were the most inflated) due to Wall St. inflating the demand for mortgages on the secondary market and large banks and mortgage-lender all to willing to sell their paper (and often engaging in fraud to give out larger loan amounts than what the borrower could handle financially).

        • 0 avatar
          TW5

          @ Deadweight

          Your remarks about prices may also be true, but they are not related to the notion of excessive incentives. In fact these issues are essentially the inverse of one another.

          I’m as outraged as you are by the fake value propositions and the absurd transactions prices for new vehicles, but America’s willingness to be robbed blind at dealerships, while making budgetary sacrifices elsewhere, is not the sign of an impending economic crisis. If people start skipping their mortgage payments or under withholding for federal income tax, we can start to panic.

        • 0 avatar
          28-Cars-Later

          DW, where will rates land? Somehow I feel like five percent is the new sixteen percent a la Volcker.

          • 0 avatar
            DeadWeight

            The 10 year t-bill will be something to watch and awe at post-midterm elections.

            I’ve never made this call but will now with real world inflation running white smokin’ hot in materials and labor, all governments massively deficit spending,,and just U.S. Publicly traded corporations carrying 6 trillion USD of often highly leveraged (and exposed to share price turn down) debt on their books –

            10 year U.S. t-notes will be yielding 3.5% by December, and possibly even October. That’s nearly 80 basis points (and 30%) higher than today, and a leveraged bond trader could make 200% returns or more, if this comes to pass (it will have to; inflation is already on a full head of steam and could break
            out further given global trade spats).

            But the real money that will be made in bonds will be on U.S. and weaker EU (and British if post-Brexit) bonds in the 20 to 30 year maturity range; the bind market has been either inverted or so close to inversion for so long, as well as truly bizarro world (with Spanish and Italian and Greek and Portugese bonds t0yielding mere pips more than U.S. bonds of similar maturation dates, due to some expected,’permanent ECB put) that it could be a repeat of the 1980s Mexican almost default scenario, whereby many traders made 8x their money on long dated Mexican bonds guessing correctly that the Mexican Gov’t would be bailed out and front-running that.

          • 0 avatar
            TW5

            @ DW

            Do you think the trade deficit is going to narrow substantially later this year?

          • 0 avatar
            DeadWeight

            As always with difficult, many variable-dependent scenarios, it depends.

            The short answer and my best projection is that we will have large trade deficits with those nations that we’ve had large trade deficits with for many years (i.e. China, Mexico, Japan, Germany) because a full-blown trade war and ratcheting up of tariffs will crush equity markets, wreck bond markets, and accelerate interest rate hikes at a blistering pace.

            These are the trade-offs Trump would have to be willing to accept in order to be committed to significantly narrowing said trade imbalances (the pain would flow both ways, also, and it’s complicated to predict China’s response – with China having the largest trade surplus, by far – if Trump is willing to up this ante and follow through, because China is much more export reliant,and because China is much weaker financially and economically (domestic market is very ill with slowing consumption, massive industrial overcapacity, and rampant speculation, along with toxic regional bank loan portfolios), and he’d have to be willing to play this poker with China before midterms.

            We’re going to have higher interest rates, a very real potential for equity market declines of significant magnitude and steep losses in bonds (see interest rate dot plot whereby fed reserve has little ability to reverse course for many reasons, and may have to hike more frequently and aggressively due to information and in prep for next recession, to have monetary tools/ammo again) over intermediate term anyways, but even moderate trade war with China will put serious hurt on both economies and their respective equity and bond markets.

            So, the simple question becomes his willing and far is Trump really going to go in his stated position to chop China’s trade surplus, given these corollary risks, and how willing is China willing to go to not yield to this pressure, let alone not retaliate through things such as dumping its U.S. Treasury holdings, pivoting further towards non-USD denominated trading with other resource rich nations, etc.

            Who can predict these things re Trump, who hates to lose face, as two camps of Navarro-Ross and Mnuchin-Kudlow fight for Trump’s confidence, and China resists buckling to what it sees as a real threat to its precarious economic and financial woes (as well as losing face).

            We have not seen this sort of volatile, unpredictable situation in a long time.

            If I had to guess, at the end of the day, both sides will compromise and declare victory, with no significant (i.e. 20% or more) real decline in that particular trade imbalance. But who knows.

          • 0 avatar
            Big Al from Oz

            TW5,
            The US trade deficit from the impact of Trump will take a few years to have full effect.

            What will have a larger impact is Trump’s uncontrolled borrowing and less revenue from tax cuts.

            Wait a few years and what will your xenophobic remarks be? You will still blame all because the US is performing poorly.

            The US is currently performong okay due to nearly a decade of economic and financial manipulation by previous US governments. Not Trump.

          • 0 avatar
            DeadWeight

            Big Al – The Trump/GOP tax cut goosed the U.S. economy by a likely .85% to 1.2% GDP bump over what it would have been under prior calculus, but it will be sugar high bump that fades as increased deficit and higher inflationary throughput ultimately act in concert to force higher interest rates at faster clip than would have otherwise been the case.

            There is no having of the cake and eating it too when such diametrically opposed forces clash.

          • 0 avatar
            TW5

            @ DW

            I don’t foresee a substantial decline in the short run either, and that’s why I’m uncertain about the potential for rising interest rates. The tectonic shift from the beginning of this millennium and the current date has been a five-fold increase in the current account deficit. Supposedly interest rates would hold because demand for money was virtually unlimited in the United States. Consumers always had room on their personal balance sheets for bigger mortgages and more consumer debt.

            The assertion was dubious then, and it’s still somewhat dubious today. I suppose there is some room on the upside, but not a lot.

          • 0 avatar
            28-Cars-Later

            DW is Alan Greenspan, it all comes together now.

          • 0 avatar
            Sub-600

            “DW is Alan Greenspan”…Andrea Mitchell has the largest head in America. It’s like an apple resting upon a toothpick. How does she hold it up?

          • 0 avatar
            28-Cars-Later

            “1980s Mexican almost default scenario”

            I read a book excerpt which claimed the real reason for the Volcker shock was too many TBTF were long in South American bonds and were insolvent and by raising rates they were able to replenish their cash by collecting monies on some sort of middle-man mortgage percent fee. The Fed exists for its member banksters, not you or I.

          • 0 avatar
            TW5

            “The Fed exists for its member banksters, not you or I.”

            And that could be what moves rates as DW describes. US policymakers generally believe forex investment in USD by our trading partners is dangerously high. China and Japan central banks both hold over $1T in US treasuries.

            The Fed could use interest rates to drive down bond prices, and sort of force the central banks around the world to reduce their holdings of US public debt. The banksters would swoop in under orders of the Fed and start buying to prevent a dollar collapse. If this happens, look for rates to ease in the aftermath so the banks can make big profits on their US treasuries.

            The strategy would be difficult to implement and control, and there is no compelling economic strategy behind such a plan (it would be geopolitical), but I still think it could happen.

        • 0 avatar
          Lou_BC

          “And that’s nothing compared to building/construction materials and labor inflation, which is a major problem for the construction industry right now.”

          Part of that “building/construction materials” inflation is due to the recent tariffs of Canadian softwood lumber. It adds at least $9,000 USD to the cost of a new home.

          Tariffs have not hurt, let alone slowed down production at local mills due to strong demand. Canadian producers can get virtually any price they want since USA producers don’t have the capacity to meet their domestic consumption.

  • avatar
    TW5

    Paul Singer is noteworthy for more dubious reasons, but I’m glad they were not mentioned.

    Anyway, Hyundai seems like a decent merger. Hyundai has no truck division and no offroad credentials. Neither RAM nor Jeep interfere. Hyundai have no performance sub-brand so Dodge won’t get in the way. Hyundai don’t have much of a luxury brand so Maserati won’t cause many problems. Chrysler will probably be eliminated.

    Hard to say what’s going on big picture though. If you’re Hyundai, you really don’t want this news to come out. If you’re FCA, you want to leak as many rumors as possible to drive up stock price and avoid a hostile takeover. Brinksmanship.

    • 0 avatar
      James2

      “If you’re FCA, you want to leak as many rumors as possible to drive up stock price and avoid a hostile takeover.”

      In theory, yes, but how many other car companies out there want to buy this dying carcass? I can think of only VW as willing to add still more brands to its portfolio. And they might want to haggle since they are paying out the wazoo for Dieselgate.

    • 0 avatar
      bd2

      Hyundai has a truck division, just not in NA.

      RAM and Jeep would definitely be the prize if such an acquisition goes thru (Jeep having the better growth potential for overseas markets).

      Hyundai has a performance sub-brand, but wouldn’t interfere w/ the Charger and Challenger (can see the Dodge brand going away and being replaced by a specialty SRT brand consisting of the Charger and Challenger).

      Hyundai has a luxury brand, of which Alfa Romeo would be a direct competitor (Maserati is on a higher level of luxury, more on par w/ Aston than the mainstream lux brands like BMW).

      Genesis and Alfa would be redundant (not to mention Kia’s RWD offerings) as both are either new or re-entering and are in the early stages of fleshing out their respective lineups.

      But at the same time, there would be costs savings in sharing the development load when it comes to platforms and powertrains, but selling off the Alfa brand (as well as Maserati) would be a real possibility.

      Don’t see much of a future for Chrysler. What happens to the Pacifica would be interesting.

      Fiat has become a niche brand, like Mini – basically selling various body-styles of 1-2 models.

      Overall, such an acquisition would be risky for Hyundai, but Singer is putting pressure on Hyundai and there are some potential benefits.

      • 0 avatar
        Big Al from Oz

        bd2,
        I also see an opportinity for FCA in product improvement.

        FCA has more to gain from a merger with Hyundai than the other way around.

        • 0 avatar
          Art Vandelay

          I don’t know Al. Hyundai would love to become a Major player in the US Full-sized Truck market I’m sure. What is the profit margin on a Ram compared to the rest of Hyundai’s lineup? It’s a good fit for NA if they are willing to trim the dead wood. Keep Jeep and Ram.

          • 0 avatar
            Big Al from Oz

            Art,
            I see it this way. Trump might fnck things up so much that the US could lose the chicken tax. This is needed, but it will take a couple of decades to change the Big 3.

            Trump, when he is removed from office might leave the US in a position of less influence, leaving whatever government that replaces him to make “deals” to appease an angry world.

            I’m not stating this will happen, but it’s worth keeping in the back of your mind.

    • 0 avatar
      Big Al from Oz

      Trumpbot5,
      What will you say when more imported product comes from those National Security threatening Koreans. The use America.

      Do you realise your comment doesn’t sit well with the nonsense you produce on trade?

      • 0 avatar
        "scarey"

        BiGalFromOz— I AM ISSUING A CHALLENGE TO YOU. LETS SEE IF YOU WILL PUT YOUR MONEY WHERE YOUR MOUTH IS—
        If Trump is impeached and removed from office BEFORE either Hillary Clinton, Bill Clinton, or Barak Obama ARE FOUND GUILTY OF A FELONY or KILL THEMSELVES,
        I will leave this forum and never come back.
        In return, I want you to pledge that if either Hilllary Clinton, Bill Clinton, or Barak Obama is found guilty of a felony OR kills themselves before Donald Trump is impeached and removed from office, YOU WILL LEAVE THIS FORUM and not come back.

        DO WE HAVE A WAGER ?

        • 0 avatar
          Vulpine

          What if Trump is merely voted out of office before those other supposed events? What will you do, then?

          • 0 avatar
            "scarey"

            In the unlikely event that Trump runs for re-election and is defeated, I will likewise never darken these portals again. How is that ?

        • 0 avatar
          Sub-600

          Bubba has already been impeached, nothing else will ever happen to him. “Madame President” is bulletproof even though she should have hanged for Benghazi. The Kenyan is off limits, liberals worship that ponce like a God. Trump could still screw up. BAFO could easily win the wager even though a draw is likely.

  • avatar
    Sub-600

    The Jeep Wrangler 38th Parallel Edition will be a hit.

  • avatar
    "scarey"

    Oh, I HOPE not./Jose Jimenez voice/
    I don’t want to see Jeep owned by KIA. I don’t like them owned by Fiat.

    • 0 avatar
      Big Al from Oz

      Well it seems Hyundai-Kia have done a great job and produce higher quality vehicles than FCA.

      Korea is a free country, a good country.

      • 0 avatar
        Lockstops

        What do you base that on? FCA has massively brilliant engineers, they have made some of the most perfect cars in the world through the brands of Ferrari and now Alfa Giulia and Stelvio (though reliability of the latter is yet to be seen, but design wise they are astoundingly good). Fiat’s engine tech is absolutely top (remember that they originally brought us DI gasoline engines though they sold that to Bosch early on), and they not only make them technically good but great in character too.

        I have little own experience with Hyundai/Kia and apparently they’re good in reliability but most of their strength is actually the warranty according to the people I know who bought Kias and found them to be very unreliable.

        FCA’s problem has been _wanting_ to make top of the line cars. They can when they want, Ferraris, new Alfas, Fiat 500s are proof of that. The problem in the past has been too much cost cutting and a severe lack of investment. It’s easy to see the attitude of the owners of the company. Now that they’ve put in a reasonable amount of investment they’re making just as brilliant vehicles as they are pushing for: for example they left out a few things in the Maseratis and they are exactly as one would think will result from that. They are brilliant in many ways and in a few areas they decided not to go for maximum effort/investment and there they are only so-so. Look at the Levante: it’s a brilliant vehicle (for those who are too afraid or illogical to drive proper cars and instead choose stupid SUVs).

    • 0 avatar
      barksdale

      HAHAHAHA – Jose Jimenez. If you’re going to continue to pretend to be an American from Nebraska, keep working on your references. Don’t use a character from an old TV show that most people don’t even know about at this point. C’mon, scarey – you can do it! Is TTAC the testbed before you graduate to full facebook trolling?

  • avatar
    aquaticko

    I’m honestly not sure what Hyundai gets out of this. Sure, Jeep and trucks, but the biggest truck market in the world is the U.S., and the U.S. market for them–is saturated, and everyone is (probably correctly) smelling an economic downturn/crisis within a decade, which means trucks will slump again.

    Meanwhile, what incentive does Hyundai have to maintain the competition for its crossovers that Jeep provides? Why would they invest in Maserati or Alfa Romeo and provide Genesis with competition there? Chrysler is quit clearly, and unfortunately, dead, and the idea of Dodge as a performance mark is still mostly laughable, a few low-volume tiresmokers aside.

    FCA’s motivations for this are obvious, as it can be said almost without reservation at this point that Hyundai is the superior automaker. I’m just not sure what Hyundai gains from it.

    • 0 avatar
      Robbie

      +1

    • 0 avatar
      Big Al from Oz

      Its a misconception and fallacy thinking the US is the biggest global market.

      1. The Chinese market is far larger and expanding rapidly.

      2. From a regulatory/design perspective the US is the smallest market globally. For the US to gain more influence in the global market it needs to become a signatory of UNECE vehicle regs. The US can then have greater input into global vehicle safety and design and have greater ease of exports, which would help the US.

      • 0 avatar
        aquaticko

        Hence, “for trucks, the biggest market…” Nowhere in Europe, nor China or India, buys anywhere near as large a number or as profitable a variety as the U.S.

        • 0 avatar
          Vulpine

          Variety? We have a Variety of trucks in the US? HAH! Variety means you have trucks of all sizes, not all trucks of ONE size! Let me know when we have a Model T-sized truck again, ok?

        • 0 avatar
          Big Al from Oz

          aqua. We have 15 brands of pickups not counting US pickups.

          The EU has more.

          WTF planet do you live on?

          • 0 avatar
            Vulpine

            @Big Al: Because those other pickups are not as visible here in the US (I wonder why?) many Americans have no concept of how many pickup brands, sizes or ‘types’ are available elsewhere. As such, their conceit suggests that the US has to be the biggest user of pickup trucks in the world; an argument marginally supported by one American’s former work truck seen carrying a bed-mounted machine gun in SW Asia for a terrorist organization.

      • 0 avatar
        John

        Smallest???, what planet are you on. In 2017, 17.5 million new vehicles were sold in the USA, 15,631,687 in the EU, and 24.72 million China. But the US market is still the world’s largest by Value.

        • 0 avatar
          Big Al from Oz

          Not really John, don’t think of markets by country but free trading blocks.

          Most all UNECE Vehicle Harmonised nations are free trading and that is by far the largest market financially.

          Because of this type of trade will make Trump’s plan to disrupt global trade more challenging.

  • avatar
    Fred

    I can’t really think of how this will benifit FCA. Unless you are fine with Fiat becoming Hyundai/Kia clones. I’d imagine the Chrysler products to be cleared out and yes, good bye Hellcats. Of course Jeep and Ram will live on. Also Singer will get what he wants, because he is kind of dick about getting paid. Sergio will retire with a nice bonus to Ferrari. Of course I’m not a fan of FCA or their cars, so I’m just being pessimist and mean.

  • avatar
    "scarey"

    “Oh, did GM just give KIA two billion dollars ?”.

  • avatar
    V16

    An all new Chrysler 300C riding on a Genesis platform, would be welcome.
    A merger, may be the ONLY chance of Chrysler or Dodge competing in the sedan category.

    • 0 avatar
      bd2

      If Hyundai ends up keeping both Alfa and Maserati, they, along w/ the Charger and Challenger will all eventually share the same basic RWD family platforms (w/ some variations).

      Would be hard pressed to find a future for the 300, much less Chrysler as a whole.

  • avatar
    thejohnnycanuck

    Why is Marchionne still pushing this agenda? Isn’t FCA now in the black? After the Dart/200 debacle they certainly have their act together. The Pacifica, JL Wrangler and new Ram pickup are fantastic vehicles. If only Sergio didn’t have this obsession with Alfa and Maserati I’m sure they’d be even farther ahead.

    I just don’t see how a merger or acquisition is in any way the best move for FCA at this point in time.

    • 0 avatar
      28-Cars-Later

      FCA needs greater economies of scale and better access to technology in order to survive long term. Add in the fact the Agnelli’s are rumored to want out of the auto business and you have a situation in play which almost guarantees a merger or strategic alliance.

      • 0 avatar
        thejohnnycanuck

        Do they? They can build an electric car. Sergio said he was losing money on it but not once did I hear that the 500 was a bad EV. They can build a hybrid and didn’t Waymo just order over 60,000 of those Pacificas?

        I’ve been a Chrysler guy since the 60’s. Just for once I’d like to see them make a go of it without being passed around like the community joint.

        • 0 avatar
          28-Cars-Later

          Sergio and Carlos Ghosn have both spoken about economies of scale and the need for industry consolidation. I too root for the underdog but I don’t see Chrysler as a dominant player in a merger.

    • 0 avatar
      Big Al from Oz

      John,
      Its not just about being profitable, its about the future as well.

      Hyundai/FCA having a larger global footprint is better for all and offers more security.

  • avatar
    Trucky McTruckface

    Sounds like a near-perfect marriage, especially if Hyundai can negotiate Fiat and Alfa out of the deal. Hyundai sucks at SUVs and trucks, while FCA sucks at everything else.

    If they have to keep selling Chrysler-branded minivans and Dodge-branded RWD mullet-mobiles to avoid buying off the dealers, that’s not exactly the worst thing in the world for anyone.

    • 0 avatar
      Lockstops

      So many messages here have the misconception that FCA, and more specifically FCA thanks to Fiat wouldn’t have high level of tech, engineering & production? Where are you getting this, from stereotypes of some 90’s Fiat models?

      Fiat is right at the top with BMW in engines. Remember it was their brilliant engineers that developed DI gasoline engines, they just sold it to Bosch before it was ready for market (they still got the honor of having the first DI engined car on sale). These are the guys that made the excellent MultiAir engines for Alfa and Fiat, and the guys over on the posh side make some of the very best engines in the world for Ferrari and Maserati.

      Chassis design? Look at Ferraris and Alfa Giulia (and Stelvio if you can call SUVs good at anything, at least in comparison to other SUVs they are at the very top of the game).

      Actually the only problem Fiat has had is underinvestment. It’s clear that the owners had no vision or interest, only focused on reducing costs. But that has changed now, though having _all_ of their brands ‘firing on all cylinders’ will take some time. They’ve completely revamped their dealership system in Europe which is a big thing. They’ve invested much, and very wisely (the jury is out on how good their strategy for Maserati has been though…), and their new production facilities and revamped old ones will benefit them in the long run.

      They have unbelievably strong brands to use, and they have extremely talented people plus they’re a desirable employer so they’ll have no problem recruiting more of the brightest in the future. That is one of the most valuable things and hardest for anyone else to replicate in less than several decades, if not half a century.

      I’m not that familiar with FCA’s American side but everyone knows (or should know) how valuable Jeep is, though actually it’s such a gem that I don’t think it’s easy even for industry experts to wrap their heads around how incredibly valuable it is! RAM seems to be doing well, and actually Dodge/Chrysler does have a massive opportunity for synergy with the Italian companies, if only someone comes up with a new and working strategy for Dodge and especially Chrysler.

      I really don’t understand why Sergio is so panicky about selling (something in it for him personally?) since the FCA has room to more than quadruple investments into every brand (except Jeep and RAM since they’re already doing well, and not quite quadruple with Chrysler and Dodge until they have a ‘story’ to push and a good strategy). Fiat, Alfa, Maserati at least have room to multiply investment: each one has room for so many new models and their brand and platform potential is strong enough to easily bring great returns for whatever amount they decide to put in. Maserati has room for not only a sports car and several GT cars but especially room for two to three SUVs and at least one new sedan/coupe. Easily. Alfa now basically only has one sedan/SUV pairing, they’d have room for at least one pair more plus at least one or two more compact models plus a few ‘coupé’-SUVs of some sort. Fiat has room for most investment: new world class compact cars, small to large wagons, minivans, vans…sure they have some of that already but not nearly enough and all that they invest they will get returns for.

      So what FCA needs is a proper strategy (their own version of a BMW-style lineup that works for their brand story, and a less cynical and boring plus more value-added platform sharing strategy in the model of VW/Skoda/Seat/Audi sharing), then new rounds of funding and they can grow to a good enough size to achieve what Sergio wants all by themselves and without opening themselves up to the government-corporate system of South Korean Hyundai. What we don’t need is another European or American brand sold to the East just to cash in. We need to invest in our future, not sell it for a bit of fast cash.

  • avatar
    thegamper

    Some interesting facts. Just a quick internet search puts FCA’s market cap at a surprising $28 billion. That seems really hefty although I can see Jeep and ram alone accounting for the bulk of that price.

    Also, the combined sales of Hyundai/Kia and FCA would make the combined company “HKFCA” the world’s largest automaker, surpassing VW by more that 1.5 million units. That is also surprising and I’m sure quite enticing.

    If you are like Sergio….a believer in synergies that volume brings, this does make sense on many levels. Personally, I think Sergio is right. There is so much redundancy in auto, in R&D alone, more mergers will likely follow.

    • 0 avatar
      RHD

      It would be a shorter corporate name – Kia Fiat Chrysler, or for short, KFC.

    • 0 avatar
      Lockstops

      …or they could just pour money into the company and grow it. They have the most rock solid foundations imaginable, it’s sad to see the owners uninterested in building on that with enthusiasm. Thankfully Sergio breathed a lot of life into the company, hopefully the great results (for such a short time period) will encourage them to get some proper growth strategies in place to bring their underused brands to life. Lord knows they have the engineers, the style and the heart to make the most appealing and exciting cars in every segment from Fiat 500 to Giulia to RAM. And then there’s Jeep…

  • avatar
    suspekt

    This makes a lot of sense.

    Ram, Jeep, Genesis, Challenger, Kia, etc

    This combination will be synergistic

  • avatar

    This the fake news story of the month.

    • 0 avatar
      DeadWeight

      Agreed.

      Sergio has tried to fetch many buyers for so long that he’s probably promoting this latest rumor of a hook-up.

      Also, this is not a conducive environment, politically speaking, for such z merger, to say the least.

  • avatar
    Big Al from Oz

    Hyundai already does work for FCA. The Wrangler body, panels, etc is knocked up by Hyundai.

    Hyundai influence of quality would also help FCA.

    I could see some of FCA’s outdated platforms using Hyundai platforms and Hyundai would have access to some light commercials and SUVs.

    This should occur.

    • 0 avatar
      John

      Hyundai Motor Company does not directly have anything to do with the Wrangler, its MOBIS North America (Hyundai Precision & Industries Corp), LLC Formerly Ohio Module Manufacturing Company (OMMC), this company in 2007 won the contract to produce the complete rolling chassis for the Wrangler.

      The MOBIS plant is located at the Toledo Supplier Park, part of the Toledo Complex that contains Toledo North, Toledo South, Stickney and Parkway.

    • 0 avatar
      Vulpine

      FCA’s quality is already far better than its ‘reputation’ would have you believe. People are stuck on a 40-year-old Fiat reputation, believing that Fiat couldn’t have changed.

      People driving FCA (and specifically Fiat) cars today are praising their quality, even when their cars are used rather harshly.

      So the only benefit they’d get from Hyundai is a longer warranty period and a “reputation” that has been slipping lately. (Kia Sedona recall affecting every one since 2006, I believe?)

      • 0 avatar
        deanst

        I’ve seen no evidence anywhere that FCA quality is competitive – any surveys you can cite to support your acertions?

        This merger makes a lot of sense, with the only stumbling block being FCAs inflated share price.

        • 0 avatar
          Vulpine

          @deanst: General public commentary expresses quality and satisfaction well above the more limited views of most reviewing sites that rely on subscriber polls. This becomes especially true when said sites have such a small polling base for brands like Fiat in the first place. I’ve now purchased two different Fiat products despite commercial opinion polls like CR and JD Power and have had no problems with them that would deserve the ratings both of those polling organizations deliver. People by the tens of thousands are buying one of those models on a monthly basis–most of them ignorant of those polls, especially since that second product carries a Jeep name and yet is essentially identical (with one exception) to the Fiat 500X.

          You want proof that Fiat’s quality isn’t as bad as its reputation? Then ask yourself, how many Jeep Renegades have been sold since 2015? Why aren’t people complaining about its quality?

        • 0 avatar
          Sub-600

          I have a 2013 AWD Charger R/T and I’ve had a broken window button and an alternator replaced (covered by recall). That’s it for problems. CR and JD Power can take a suck.

        • 0 avatar
          ajla

          They are fun cars, but the build quality on my Charger has been disappointing. I’ve had lots of electrical and fit/finish issues. Plus, this week I noticed my engine (at 37k miles) is seeping oil from several places.

          • 0 avatar
            Dave M.

            I so want a Jeep Grand Cherokee, but my brother’s experience with his three Dodges over the past 15 years leads me away towards my Toyota dealer.

            Lifes too short to piss away my money on inferior products.

      • 0 avatar
        Lockstops

        Vulpine: so true.

        I dislike generalisations of reliability but I have to face the fact that the German brands I’ve lately been a consumer of have had inexcusable spectres of massively expensive faults over their heads. My Porsche I sold because I couldn’t take the stress of potential engine failure anymore. Then turns out BMW had catastrophic engine failures as a not-distant-enough possibility as well, with several models in a row! Only in one of my BMWs the engine did pop, and they took care of all costs even when out of warranty, but still. No ‘luxury brand’ seems to be clear of potential bank-breaking problems. And it’s especially in the expensively breaking stuff that I trust FCA the most. I’ve also kept hearing good things about Fiat guys’ stuff, even Alfa despite a few gremlins on some Giulias. They don’t seem to be grenading engines, especially the ‘cheap Fiats’! No gearboxes like the VW Group DSG which makes the car lose all value and even VW Group brand dealerships will tell you it’s junk and they won’t pay what you’d expect for it at trade-in.

  • avatar

    This merger won’t happen in the trump era.

  • avatar
    CKNSLS Sierra SLT

    Having just traveled though out the Baltic Region of Europe-Fiats were every where. While I don’t have first hand knowledge of their quality-or lack there of, I don’t know if you would see as many on the road as I did if they were THAT BAD!

    • 0 avatar
      sgtjmack

      When you only have a selection of three vehicles for a set price point, then you take what you are offered.

      Just because you see a lot around does not mean they are quality vehicles. Just look at Hyundai/Kia or Mitsubishi or back in the day, Suzuki. Are there a lot of those vehicles on the roads? Of course there are, because they are more affordable than other vehicles. But they don’t have a great reliability/longevity as compared to Toyota/Honda/GM etc.

  • avatar
    Carroll Prescott

    Acquire FCA – prune Chrysler, keep FIAT in Europe, keep Jeep and Ram since those are areas Hyundai is weak. Dodge is really not remarkable, but the Charger has some value. Develop the next Charger so that the next Stinger will have platform sharing opportunities – they don’t compete now as positioned. And may turn Chrysler’s minivans into Dodges or Kias.

    • 0 avatar
      sgtjmack

      Except the Stinger is a little smaller than the 300/Charger. The Stinger is also front wheel drive as opposed to the 300/Charger being rear wheel drive, but both are available in AWD. That being said, I don’t understand how they would make the two vehicles on the same platform.

      Dodge still makes the Caravan, and just started selling them again relatively recently, so I don’t understand what you mean by turning the Chrysler Pacifica (T&C) into Dodge.

  • avatar
    sgtjmack

    Junk building junk. Man, the guys at Chrysler can’t get together with a truly quality brand to save their hind ends. Even Daimler-Benze couldn’t stay with their crap products until the end of their contract.

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