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Chrysler and Fiat - Italian-American Flavor?

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  • nippononlynippononly SF Bay AreaPosts: 12,693
    Not at ALL confident. ;-)

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • fezofezo Posts: 9,383
    I'm kind of with nippon on this one. While I am sure that Fiat is quite a different company than the one that closed up shop in teh USA decades ago there is going to be a huge perception problem that will need to be addressed.

    My biggest concern is whether they will get enough time to prove themselves. If they and Cerberus are willing to put their money up on this one I'm certainly willing to see what they've got.

    I look at it as Renault likely has much better vehicles than when they left the USA. I'm sure that it's the prior perception that keeps them out now.
  • hpmctorquehpmctorque Posts: 4,227
    "Not at ALL confident" that your knowledge and perception of the current state of Fiat's reliability are accurate, or that the reliability of today's Fiats would prevent them from succeeding in the U.S.?
  • smithedsmithed Posts: 444
    "It's the U.S. crash requirements that make it hard for automakers to import their European models here, not the emissions regulations. The emissions regs only impact the diesels."

    Don't you think they will meet the requirements? Two reasons: regulation required and unsafe won't sell. People pay attention to the number of stars.
  • dtownfbdtownfb Posts: 2,915
    Somebody needs to explain to me what this whole deal is about? Based on this article, Fiat is in more debt than reported.

    Fiat debt levels soar, 2009 profits seen lower
    Speculation emerges on combination with PSA Peugeot Citroen

    January 22, 2009 - 9:00 am ET
    UPDATED: 1/22/09 1:14 p.m. EST

    MILAN (Reuters) -- Italy's Fiat SpA, poised to take a 35 percent stake in Chrysler LLC, slashed its profit outlook for 2009 by about a third and revealed a debt pile three times its own forecasts, sending shares in Europe's sixth-biggest automaker nearly 12 percent lower.
    Subscribe to Automotive News

    Industrial debt, which excludes debt from financial services, soared to 5.9 billion euros ($7.66 billion) last year, shocking investors and sending shares in the maker of cars, trucks and tractors down 11.35 percent to 3.9450 euros in afternoon trading, their lowest level in around 15 years.

    "They are burning cash ... It's awful," said one Milan broker.

    Fiat also reported a 30 percent drop in fourth quarter trading profit to 663 million euros ($858 million), which did beat analysts' average expectations.

    The company said trading profit for this year would be in excess of 1 billion euros ($1.29 billion) compared to a previous forecast for between 1.5 and 2.3 billion euros.

    Merger speculation reported

    The debt news appeared to give weight to a La Repubblica newspaper report of a possible capital increase that could be used for a potential merger with France's PSA Peugeot Citroen. But Fiat called the report groundless and made no reference to a possible merger with PSA.

    The newspaper said Fiat's founding family is weighing a capital increase of about 2 billion euros ($2.58 billion).

    The capital increase by the Agnelli family's Exor holding company would aim at keeping a significant stake in a merged company, La Repubblica said on Thursday without citing sources. The Agnellis own about 30 percent of Fiat through Exor.

    A PSA spokesman had no comment apart from saying the French car maker's priority was to come out of the crisis gripping the car industry.

    Fiat and PSA are Europe's leaders in small cars which have low carbon dioxide emissions and are suited for city traffic.

    Fiat and PSA have been working together since 1978 and have two joint ventures, making vans and multi-purpose vehicles in the north of France and central Italy. They also teamed up with Tofas for a car factory in Bursa, Turkey.

    A source told Reuters Fiat was working with banks on a credit line of up to 5 billion euros ($6.46 billion).

    The global economic crisis has led to a decimation of car sales worldwide as consumers postpone big purchases amid fears for their jobs as well as problems getting credit.

    Fiat and other automakers have been scrambling to cut the cost of mounting inventories of unsold vehicles by suspending production and laying off workers. They have also called on their governments for help.

    Fiat's no-cash bid for Chrylser -- in exchange for Fiat giving Chrysler access to its small car technology and platforms -- is contingent on Chrysler winning another $3 billion in U.S. government funding. Chrysler already has received $4 billion in such funding.

    Ratings review

    After Fiat issued the report, ratings agency Standard & Poor's said it would consider lowering the automaker's debt ratings.

    The move "reflects our view that the tough scenario for the auto and truck sector in 2009 will pressure the ratings on Fiat given the higher-than-expected, sharp increase in the group's financial debt, the ensuing reduction of the group's liquidity position, and the harsh financial market conditions" that Fiat faces, credit analyst Barbara Castellano said in a written report.

    Standard & Poor's said it would further review the proposed deal with Chrysler.

    "We do not see any immediate benefit for Fiat from the announced deal with Chrysler," the report said. "But in the future the 35 percent stake that the group would own if the transaction closes could be advantageous for the group.

    "However, although there will be no cash outflow over the next few months, Fiat may engage in technical aspects of the transfer of knowledge and technologies to Chrysler, requiring some effort on the part of the group."

    Inventories pile up

    In reference to its soaring debt, Fiat said capital spending had risen 36 percent during 2008 while working capital climbed to 3.6 billion euro as unsold vehicles piled up.

    Fiat will also have to provide financing to its agricultural equipment unit, CNH Global NV, because the U.S.-based operation was not able to get funding from the asset-backed securities market. This market has virtually shut down as a result of the crisis, a source close to the group told Reuters.

    Fiat, whose CEO Sergio Marchionne had prided himself on meeting his targets, said in a statement it had suspended its share repurchase program. It will not pay a dividend except for savings shares in a move to preserve cash.

    At the end of 2008, it had 3.9 billion euros ($5.04 billion) of liquidity.

    For 2009, Fiat expected net industrial cash in excess of 1 billion euros with net industrial debt falling below the 5 billion euro mark.

    Since Fiat was the first European car maker to report results, its numbers gave the market an idea of what to expect from its peers.

    "We are going to be shocked by the state of balance sheets by the end of 2009," Bernstein analyst Max Warburton said.

    Shares in France's PSA were down 3.17 percent and those of Renault off 6.25 percent.
  • kernickkernick Posts: 4,072
    http://www.usatoday.com/money/autos/2009-01-22-chrysler-fiat-merger-deal_N.htm

    I'll also petition my congressmen to get Chrysler?cerberus to return the loan money.
  • faroutfarout Posts: 1,609
    I have been driving Chrysler products for 20 years now. I fail to understand how Fiat, that is deeply in deb,t could be a good combination working with Chrysler. Chrysler, thanks to Daimler, moved to producing low quality materials inside the Chrysler vehicles. Hard plastic cheap looking, and poor fit and finish was the order of the day. Fiat is not noted for quality and well built vehicles from when they last were imported to the USA.

    Is Chrysler, owned by Cerberus, so desperate they would jump at any old company they could find? Why not look at the old Yugo company?

    Cerberus can unite with BMW, but until the quality of the cabin matches the quality of the engines and transmissions Chrysler will drop more in sales to the point no one would even consider uniting with them. Fiat is not a good match as I see it.

    What has happened that Fiat looks like a good company to GIVE 35% of Chrysler to, for not one dime? This seems unbelievable!

    farout
  • dtownfbdtownfb Posts: 2,915
    "Is Chrysler, owned by Cerberus, so desperate they would jump at any old company they could find? Why not look at the old Yugo company? "

    Yes, Cerebus is that desparate. Chrysler has absolutely no chance of survival without the help of another company. Fiat is probably the only company that is will to partner with Chrysler. Fiat is looking to get back into the US market, Chrysler needs small cars. Up until this morning, it looked like a good deal.
  • kernickkernick Posts: 4,072
    Up until this morning, it looked like a good deal.

    Well yeah maybe for those who were going to benefit, keeping their jobs or stock based on the backing of everyone else's money.

    The fact is there are too many manufacturers with too many models producing too many vehicles around the world. This was true before the economic crisis, and is more so now. Some manufacturers, plants and workers need to be removed from the system.

    Think about it - how many different vehicle models are actually needed in the world -100? Why GM alone makes them many with their 12 world-wide divisions. Do you know what that means? A lot of effort put into engineering, designing, and building all these variations.

    So I say let the weak manufacturers - companies with bad product or mismanagement - go out of business.
  • steverstever Viva Las CrucesPosts: 41,252
    "Still digesting the possibilities and likelihood of the proposed alliance between Chrysler LLC and Fiat S.p.A? Add French automaker PSA Peugeot-Citroen to the mix.

    Now, it appears the two companies could, for no investment, place Fiat, Renault and Peugeot cars in Chrysler showrooms and potentially shoulder out the vehicles of the fading Chrysler, nurturing only the still-attractive Jeep brand and possibly Chrysler's pickups."

    Chrysler-Fiat Alliance Gets More Interesting With PSA Presence (AutoObserver)

    Threesome: Fiat Looks To Link With Peugeot as Well as Chrysler, Reports Say (AutoObserver)

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  • hpmctorquehpmctorque Posts: 4,227
    Indeed, it does get more interesting, and maybe more viable too, while at the same time more complex. Whew!
  • needing a more favorable direction, something could very well combine here from the three of them. Interesting proposition going here, can't wait to see the outcome.

    2011 Kia Soul Sport 5-speed

  • faroutfarout Posts: 1,609
    Financing for customers remains a key problem. No matter who unites, or joins in with Chrysler, it makes no difference if the joint vehicles were the very best in the world without financing Chrysler is still dead in the water.

    Banks have been given money to help main street, but there is no evidence of any trickle down of funds. The taxpayer has once again been screwed by the rich CEO"s who still got their bonus, and give it to others as well.

    We live in a time when greed runs the wealthy to become more greedy. There is a time coming when the workers of America will say enough! Think about it 500,000 lost jobs in December! In California those without jobs are now at 10%. Jobs once thought that no one would want, now have lines of good people willing to take poor paying jobs.

    Will Chrysler make it? I once thought so, now I am not so positive, maybe not as we know Chrysler now.

    farout
  • nippononlynippononly SF Bay AreaPosts: 12,693
    From the article you linked...

    Corker, a member of the Senate Banking Committee, lashed Detroit auto executives with tough questions about their survival plans when they asked for financial help late last year.

    Still, he wonders about the alternative: "I think there's no chance that Chrysler can pay the money back to taxpayers as a stand-alone. None. I want taxpayers to get their money back. The stronger the company is, the better the chance."


    If there's no chance they could pay back the loan, then why the H-E-double-toothpicks did you loan it to them in the first place? Chrysler should NEVER have received a penny.

    This whole Fiat-Chrysler thing is just another piece of craziness hatched by executives anxious to keep the ship afloat five minutes longer so they can get their million dollar parachutes in order in time. :sick:

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • faroutfarout Posts: 1,609
    nippononly: The US auto makers loan came with more restrictions than any other loan made to anyone else. This is not the first time to government has loaned out money. In 1978 Chrysler got a loan and paid it back early. Many were saying Chrysler would not be able to pay it back. But they did and the US got good interest too.

    If you are really worries then consider Bank of America or AIG. These loans are huge compared to GM & Chrysler loans. AIG paid out bonuses, and has very lavish trips tp a California resort, Bof A boss re modled his office for more than $ 1,000,000. The new carpet cost $ 87,000. a couch was more than $ 160,000. and B of A paid out bonuses as well. Freddy and Fanny have misused the loans as well. NOT ONE DIME has yet to help anyone in foreclosure!

    Crocker who is a southern Senator wants to protect his states assembly of foriegn autos. I personally think helping those who make parts in America, and and work putting together American vehicle deserve more than Senator Crockers workers. But, the point is all Americian workers need a even playing field. The Asianvehicle makers are substasized by their governments, and inturm we have to pay a import fee to send out vehicles to these asian countries, That is not a equal playing field.

    This getting loans to spend the US out of a financial crisis is not likely to work. We are passing a debt that future generations will never be able to pay. China is and will demand payment, and what then? Maybe China will take California to cancel the debt?.

    When our President says we are in desperate times I don't think we have any idea how bad it is. There is no way to get back to even close to where we were even in 6 years. Friend we are in a depression, when next december we are told we have lost 6,000,000 jobs in 2009 then it might hit home. In December 2008 500,000 lost their jobs.

    To change to course to turn arround a small boat it might take 60 feet, an Aircraft carrier takes several miles. The US is much bigger than an Aircraft carrier. We have yet to choose which direction to turn arround, left or right. We have yet to see the new Captian get behind the helm. Look out!! Ice a head!!!

    farout
  • faroutfarout Posts: 1,609
    nippononly: The US auto makers loan came with more restrictions than any other loan made to anyone else. This is not the first time to government has loaned out money. In 1978 Chrysler got a loan and paid it back early. Many were saying Chrysler would not be able to pay it back. But they did and the US got good interest too.

    If you are really worries then consider Bank of America or AIG. These loans are huge compared to GM & Chrysler loans. AIG paid out bonuses, and has very lavish trips tp a California resort, Bof A boss re modled his office for more than $ 1,000,000. The new carpet cost $ 87,000. a couch was more than $ 160,000. and B of A paid out bonuses as well. Freddy and Fanny have misused the loans as well. NOT ONE DIME has yet to help anyone in foreclosure!

    Crocker who is a southern Senator wants to protect his states assembly of foriegn autos. I personally think helping those who make parts in America, and and work putting together American vehicle deserve more than Senator Crockers workers. But, the point is all Americian workers need a even playing field. The Asianvehicle makers are substasized by their governments, and inturm we have to pay a import fee to send out vehicles to these asian countries, That is not a equal playing field.

    This getting loans to spend the US out of a financial crisis is not likely to work. We are passing a debt that future generations will never be able to pay. China is and will demand payment, and what then? Maybe China will take California to cancel the debt?.

    When our President says we are in desperate times I don't think we have any idea how bad it is. There is no way to get back to even close to where we were even in 6 years. Friend we are in a depression, when next december we are told we have lost 6,000,000 jobs in 2009 then it might hit home. In December 2008 500,000 lost their jobs.

    To change to course to turn arround a small boat it might take 60 feet, an Aircraft carrier takes several miles. The US is much bigger than an Aircraft carrier. We have yet to choose which direction to turn arround, left or right. We have yet to see the new Captian get behind the helm. Look out!! Ice a head!!!

    farout
  • steverstever Viva Las CrucesPosts: 41,252
    an Aircraft carrier takes several miles

    A carrier can just about turn on a dime with enough tugs.

    Send some money (tugs) to Chrysler (and have Italy do the same for Fiat) and maybe you can turn the ship around and bail it out at the same time?

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  • nippononlynippononly SF Bay AreaPosts: 12,693
    I'm not accusing Chrysler of misusing the money, I am saying it is a company with no future, and is therefore WORTHLESS collateral for a loan. Bank of America and AIG are not.

    If we could snap our fingers and Fiat platforms could be underneath Chryslers tomorrow, and Fiats in Chrysler showrooms, it would be worth seeing if this thing had a shot. But neither company has the five years of waiting time that is needed before this deal bears any fruit.

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  • kernickkernick Posts: 4,072
    Two points

    1) Before considering loans to Chrysler, I would ask for proof that the parent Cerberus, is broke. I would first want to know if any money could be diverted from the companies under Cerberus. Also maybe Cerberus could sell 1 or 2 of its other businesses, and take whatever it gets to put towards Chrysler. Sort of like selling you boat and camper to keep paying for your house.

    2) There are simply too many auto manufacturers with too many plants in the world. Why shouldn't the natural process of letting the weakest fail be allowed? To me subsidizing unneeded or inefficient companies only makes the economy worse, by not allowing resources to go to the healthy companies.
  • the Fiat and PSA Companies want the inroads in to showrooms, plants and lot space in America. A shot to sell their fuel-efficient, small, foreign-built cars in the U.S. Why not, Toyota, Nissan, Mitsubishi, Mazda, etc. are doing it!

    Besides, some of their engineers might actually think their cars are better than the Japanese cars. Or some of the Japanese cars, ones that, before this big one hit, actually appealed to and were bought by Americans.

    They see the dice rolling, stopping and showing the right numbers facing up. What do they have to lose, eh?

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  • kernickkernick Posts: 4,072
    What do they have to lose, eh?

    Nothing since they didn't put any money down! Why should we taxpayers who are now part owners of Chrysler and Chrysler financial agree to that? Why do you want the owners of Cerberus?

    Look here's what should happen with Chrysler. Cerberus should announce it's for sale, and say all bids are to be in by Feb 28, and they will take the top bid. The Chrysler situation is as simple as that. It doesn't need U.S. taxpayer $ with a private owner, and an Italian partner.

    Cerberus needs to pay back the U.S. Then if they don't want Chrysler they sell it, and accept the fact they made a big, lousy investment. I am not into playing Cerberus's game to somehow make others pay for for their bad investment.

    If Fiat, or Porsche, or GE, or Catepillar want Chrysler then let them buy it and deal with it.
  • nippononlynippononly SF Bay AreaPosts: 12,693
    4 Chryslers, under Fiat's new plan:

    Chrysler LLC and Fiat S.p.A. will bring seven new vehicles to North America under their alliance--four with Chrysler brands and three as Fiats or Alfa Romeos.

    The vehicles will be built at Chrysler plants in North America and sold through select Chrysler, Dodge and Jeep dealerships, according to sources who have seen the product-sharing agreement.

    The plan includes vehicles on four Fiat platforms--in the microcar, or A, through the mid-sized, or D, segments. The two companies have not decided on timing or volumes. Teams at both companies are hammering out details of a plan they hope to make final by April 30.

    The two companies said last week that Fiat would take a 35 percent stake in Chrysler. Under terms of their tentative agreement, Chrysler will make the Fiat 500 at Chrysler's Toluca, Mexico, plant for sale in North America, according to sources familiar with the plans.


    http://www.autoweek.com/article/20090126/FREE/901269997

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  • steverstever Viva Las CrucesPosts: 41,252
    Here's another version of the story:

    Chrysler-Fiat's product-sharing scheme: 7 Fiats headed to the U.S.

    image

    And another (two years may be another lifetime for Chrysler though).

    Chrysler-Badged Fiats Two Years Away

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  • that black Fiat 500 new-gen blows away anything Toyota has ever made in small rigs. No kidding. Toyota just does not know how to meld a nice or appealing, or cute, if you will, car body.

    That's why I am following this proposed merger of Chryslerberus/Fiat, melding point, takeover, whatever it might be, with much interest. Gonna be really tough to wrest my '08 Mitsubishi Lancer GTS away from me, but, and it's a big butt, I would much rather observe on the streets rigs like the one above, than Hummers, Chrysler 300's, Chevy Malibu's, Ford F-150 pick-em-up trucks, etc.

    Gag me with a roughly-hewn spoon! ;)

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  • nippononlynippononly SF Bay AreaPosts: 12,693
    that black Fiat 500 new-gen blows away anything Toyota has ever made in small rigs.

    Don't it ever?! :-)

    Although I am somewhat partial to the current Yaris hatch. NOT the sedan however.

    I would love this merger idea if it would mean we would have the 500 and Abarth available to us by this time next year in Chrysler dealerships, with a 3-year warranty. Sadly, the chances of that are exactly nil.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • are saying that the financials of this deal are not gonna work out, for Fiat or Chryslerberus? Or Chrysler is going down the toilet so fast that Fiat execs will nix the idea on a cold, sober Monday morning very soon here?

    2011 Kia Soul Sport 5-speed

  • nippononlynippononly SF Bay AreaPosts: 12,693
    Oh iluv, there are so many reasons this deal could end up in the toilet, it has no chance of succeeding.

    My odds are on Congress calling in the Chrysler loan on April 1 due to Chrysler's failure to sufficiently reorganize in order to meet the conditions of the loan. At which point a prepackaged bankruptcy would HAVE to occur, after which Fiat would have no further interest, if it were even allowed by the government to continue the deal.

    Now that particular route to the deal's demise DOES depend on the good sense of Congress, which of course is FAR from something you can count on. But it is only one potential path to demise of many....

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • isn't Obama a pro-union, pro-UAW kind of a guy, who will tirelessly bend over backwards to save the maker of his beloved 300? Oh, say he will, nippon!

    I can see Congress giving Chrysler(and sadly, GM too)every exception in the book under this Adminstration till the Fat Lady sings. I really can. They could just demand an easy to reach goal, one they can nearly count on Chrysler reaching, for a 2009 benchmark.

    Sort of a Socialist's creed of acceptance. As long as the most Americans keep working. Oh, this is a huge order for the Guv-Mint to fill, indeed.

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  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,238
    If the government doesn't help you, why have a government? :P

    I don't need a government to go tell me to go sink or swim. That's one message citizens do NOT like to hear.

    American will endure great sacrifices if you give them a job to go to.

    Autoworkers don't have to just build cars. They can re-cycle them, too, or rebuild them.

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  • kernickkernick Posts: 4,072
    If the government doesn't help you, why have a government?

    Many people look at business and life like a game. As such government is the infrastructure and rules of the game. There will be people who do better and worse in the game; the government however should not be biased deciding which of the players get special treatment.

    If something is "too big to fail" - like AIG, Citi, or the D3, then we need a new game-rule to limit their size before they must be split-up into separate organizations.

    Right now the world does not need all these auto-makers, and the weak would fail, allowing the strong to survive if we let them. The alternative is for each to shrink greatly.

    If Fiat or any other company wants to get involved with Cerberus or Chrysler, that should trigger immediate repayment of the Chrysler loan to the U.S.

    If I knew Chrysler is going to entertain $0-Down-Deals, why heck many of us can make those. :D
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