Fiat to co-operate with chrysler

peasant

http://news.bbc.co.uk/1/hi/business/7839542.stm

Panda goes to USA !

unkel

Now that's a surprise. I can't really see how this could be beneficial to FIAT. On the other hand, getting a big share of a big company (that just received a load of cash from the US government) for nothing and with no risks attached must be a good thing?

unkel

Ah wait, weren't FIAT planning to re-introduce Alfa Romeo on the US market? That's the distro network sorted so.

alias no.9

unkel wrote: »

I can't really see how this could be beneficial to FIAT.

Access to the US market and the Chrysler dealer network. They've been planning to relaunch Alfa over there for quite a while, they may even have launched. The original plan was to sell through Maseratti dealers which won't give them much penetration outside a few very large cities. The Chrysler deal could see them selling and providing aftersales service everywhere across the US and Canada without the expense of setting up a brand new dealer network. They may even have notions of launching Lancia or even Fiat over there too.

Edit: They get this with no upfront investment or even any commitment to fund Chrysler in any way. They don't currently compete with Chrysler in any meaningful way with very little product overlap. Geographically, South America is probably the only market where they both have a significant presence.

mike65

Hmmm I trust this means FIAT are not looking for EU/Italian gov money at the moment!

peasant

The way I understand it:

Chrysler help sell Fiat group products in the US
Chrysler buy engine Technology from Fiat (diesel?)
Fiat buys 35 % of Chrysler

Everybody happy

pburns

What about the cheapish rwd platforms Chrysler could provide to the Italians?

Run_to_da_hills

F.I.A.C. Fix It Again Chrysler.

peasant

pburns wrote: »

What about the cheapish rwd platforms Chrysler could provide to the Italians?

Fiat already own IVECO and their RWD platforms would be better, I'd say

unkel

peasant wrote: »

Fiat already own IVECO and their RWD platforms would be better, I'd say

And their suspensions

L-M

For once i'm actually stumped for something to say. Going to subscribe to this until i can think of something lol.

peasant

In an attempt to revive two of the world's storied auto makers, Italy's Fiat SpA and Chrysler LLC are poised to announce a partnership as soon as today in which Fiat could take control of the U.S. company's operations, people familiar with the matter said.

Under terms of a pact that is being hammered out, Fiat is likely to take a 35% stake in Chrysler by the middle of this year. It would have the option of increasing that to as much as 55%, these people said.

Fiat, the stronger of the two, wouldn't immediately put cash into Chrysler. Instead it would obtain its stake mainly in exchange for covering the cost of retooling a Chrysler plant to produce one or more Fiat models to be sold in the U.S., these people said. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars, they said.

The deal is the latest maneuver by Fiat's chief, Sergio Marchionne, who has pulled the Italian company back from the brink collapse since taking over in 2004.

The partnership would provide each company with economies of scale and geographical reach at a time when both are struggling to compete with larger and more global rivals like Toyota Motor Corp., Volkswagen AG and the alliance of Renault SA and Nissan Motor Co

.

http://online.wsj.com/article/SB123238519459294991.html?mod=special_page_campaign2008_mostpop

L-M

It sounds like a cost effective way of spreading their business, seems a flawless plan if you ask me.

Biro

Does seem like a good idea when you read into it. Sergio must have the old noggin well screwed on!! It'd be a disaster to have let Fiat fall by the wayside.

Elvis1973

FIAT engine innovations in the past ten years have been stunning. The common rail diesel has revolutionized the industry and has been copied by all major manufacturers except VW, who have adapted the technology and with an overcomplicated fuel distribution system without achieving tangible benefits. For example, the new 1.9l JTTDm developed >190bhp, which is amazing.

The new multiair engine with pneumatic valve control has been patented recently and will transform engine design. The first 900cc 2 cylinder will develop 110bhp and c.69g/CO2 km. Nothing else in this league.

It is this technology coupled with the likes of the Panda/500 platform that Crylser need to survive. Quite simply there is no other manufacturer with anything to compare to the efficient engine/small excellent platform package offered by FIAT, period. It is this technology that has made FIAT the most profitable car maker in the world for the past few years, a fact that most people are surprised by!

Think about it Crysler get huge federal funding to develop efficient car technology and FIAT give it to them for a 35% share of the company (with an option to purchase 55% in due course). In return FIAT get to use the fuel cell/hybrid/battery technology developed by Crysler using the federal funding. It's a no brainier for FIAT and the best option for Crysler.

Gran Hermano

I was under the impression that GM had a stake in Fiat in the late 90s
and there was even talk at the time of them buying a bigger part.
I'm guessing that GM since sold off their investment or is this a case of
GM indirectly bailing out Chrysler?

unkel

Elvis1973 wrote: »

The common rail diesel has revolutionized the industry and has been copied by all major manufacturers except VW

Even VW now use CR (they've dumped their own PD system) and pay FIAT royalties like everyone else

Gran Hermano wrote: »

I was under the impression that GM had a stake in Fiat in the late 90s
and there was even talk at the time of them buying a bigger part.
I'm guessing that GM since sold off their investment or is this a case of
GM indirectly bailing out Chrysler?

It's a bit more complicated. GM bought a share and part of the deal was a put option for FIAT. This meant that FIAT could get GM to buy them completely for a set price at a set point in the future. When the expiry date came, GM refused to buy them out and as a consequence they had to pay FIAT a huge compensation (billions iirc)

Bluefoam

Fiat are not buying a stake in Chrysler - they are receiving 35% of the company in return for sharing their technology - particularly their small platforms and eco engines - Chrysler need to fast track the development of small cars in the next two years.

Fiat are not handing over any money and do not intend to put money into Chrysler in the future (so no risk to them).

Fiat intend to sell Alfa Romeo & Fiat 500 in the US in 2010 - this will now be done through the extensive Chrysler dealership.

Fiat have been looking for a manufacturing partner in the US to allow for the Alfa & 500 production - will now be using Chrysler unused factorys.

The only country with more difficult union than the Americans are the Italians - dealing with the American unions will be like a walk in the park for them...

Elvis1973

Whatever way the GM/FIAT partnership deal was drafted, GM had to pay FIAT €2Bn to get out of the partnership in c. 2004? Since then FIAT's Canadian CEO Sergio Marchionne has transformed the company and the profits/share price has gone throught the roof. GM must regret their actions/incompitence now.

McSpud

Although I would not buy a Fiat Marchionne is doing a good job. Give them close to 10 years & they will compete with other Euro manufacturers.

Good deal for Fiat as they get yank dealers to sell their motors. Setting up dealer network from scratch would be impossible.

Bluefoam

McSpud wrote: »

Give them close to 10 years & they will compete with other Euro manufacturers.

Fiat are the most successful manufacturer in Europe at the moment. They are cash rich and are developing technology supirior to their competition. They are class leaders for small cars (fiat); sports cars (ferrari) and their prestige sports cars(maseratti) are some of the most profitable....

unkel

Elvis1973 wrote: »

Whatever way the GM/FIAT partnership deal was drafted, GM had to pay FIAT €2Bn to get out of the partnership in c. 2004? Since then FIAT's Canadian CEO Sergio Marchionne has transformed the company and the profits/share price has gone throught the roof. GM must regret their actions/incompitence now.

Indeed. Marchionne has done an incredible job in turning FIAT around. And a company that sells mainly cheap, low emissions, low tax cars can only be expected to do well compared to the competition during a recession, surely?

Welcome to boards BTW, Elvis1973

galwaytt

...time for FIAT to get buy the slogan belongs to you-know-who: " The car in front is (probably).. a FIAT"

certainly for diesels....

Fiat
Alfa
Lancia
GM
Saab
Chrysler

Crumbs........Who'd have thought it ?

Rowley Birkin QC

23 posts and not a single mention of someones aunts boyfriends sisters uncles cats Alfa blowing up, this has to be a record. :pac:

Seems like a fantastic deal for FIAT. Remember reading in an old TG magazine that they were desperate to bring Alfa back to the States and wanted to use the GT as their launch car.

Biro

galwaytt wrote: »

...time for FIAT to get buy the slogan belongs to you-know-who: " The car in front is (probably).. a FIAT"

certainly for diesels....

Fiat
Alfa
Lancia
GM
Saab
Chrysler

Crumbs........Who'd have thought it ?

Or "Fiat Power", or even the familiar "Fiat inside" on many cars!
As I said, it's great to see them doing well. Their innovation and design flair is all they had for a long time. Now that they'll get money and hopefully build quality and reliability (electrics wise) to match then they'll be a force to be reckoned with. Put it this way, which would you rather, given that both had the same build quality, depreciation and reliability, an Auris or a Bravo? I know which one I'd have in that group!!
Why do people spell Fiat with all capitals though? Always baffled me!

peasant

Biro wrote: »

Why do people spell Fiat with all capitals though? Always baffled me!

because it's actually an abbreviation

A = automobili
T= Torino

you'll have to google the rest, I'm busy