May 4th, 2009
05:47 PM GMT
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LONDON, England – Before we get excited about the auto industry transforming under the Fiat flag, remember that the Italian automaker hasn't bought anything yet.

Its "alliance" with Chrysler is now before a bankruptcy judge and involves sharing technology. Fiat is not buying its proposed 20 per cent stake in Chrysler and will still have to deal with the unions, which will have the biggest stake in the U.S. automaker.

Still, one day it may mean small fuel efficient Fiat cars being sold as a re-badged Chrysler or Dodge car. Maybe.

One day, Jeeps and Dodge trucks may be sold through the Fiat supply chain to countries where it has strong links. Maybe.

Before that, Chrysler has to survive its bankruptcy protection process. Now Fiat's CEO Sergio Marchionne wants to negotiate with General Motors to potentially buy a majority stake in GM Europe - read Germany's Opel. But Fiat is billions of dollars in debt and Opel will need a cash infusion ($6 to $9 billion) probably from the German government as a short term loan. That has yet to happen.

Then there are the unions, the factories, political interference... It's all a massive task for Marchionne. On Monday he met with the German government. It's far from clear Berlin will back a deal with Fiat while there are other suitors out there. In fact, GM says it's in talks with a number of parties and it's clear GM wants to keep a foot in Europe for when things turn around.

So while Fiat may be the only automaker willing to take all this on, it is all talk for now.

Fiat has been transformed by Marchionne, that's for sure. Whether he can take all this on is certainly not a given. Some analysts believe his Plan B is to take on Chrysler or GM Europe. Until one or both of them is sewn up, a combination of the two leads to speculation that Fiat will transform the auto landscape.



soundoff (14 Responses)
  1. Nikos Ailamakis

    Should it be called Generali Motori(or Motori Generali) from now on?

    May 4, 2009 at 8:10 pm |
  2. Clark

    How does a merger with Fix It Again Tony ... solve Chrysler's problems? The Fiat company left America a long time ago because of its reputation as totally unreliable.

    May 5, 2009 at 4:26 pm |
  3. dan in Tucson

    Fiat's first goal should be to pay back the American taxpayer. It is ludicrous to think that a foreign interest will have ours in mind. This is why it is a HUGE mistake to give corporations American tax dollars.

    May 5, 2009 at 4:54 pm |
  4. Nam(South Korea,Busan)

    I think this will be the Global New Auto Deal.

    May 6, 2009 at 5:17 am |
  5. henry

    In Asia my generation has forgotten about this brand.

    Why there is such HYPER on this Italian can transform Chrysler or GM. Common american people and government do not be taken in by What the Italian can do.

    The better partners are the Japanese or may be the Chinese.

    No way Italiano, FIAT is forgotten brand

    May 7, 2009 at 2:02 am |
  6. Per Holmlund

    And the money comes from... Libya has long dabbled in Italy, owning shares in automaker Fiat... I hope the people from Tripoli’s will get visas when visiting their factories in US.

    It’s like Alcatel of France and Lucent, a depth is taking blind as guide.

    May 7, 2009 at 11:30 am |
  7. dan in Tucson

    Once a foreign company holds interest in an American company. That company is no longer an American company and should not receive any aid from the American taxpayer. What are we stupid! maybe our legislators are, or maybe they have just become so corrupt that the foreign lobbists are able to run our country. If a US company wants to become global, then let the global economy bail them out. I am soooo sick of this.

    May 7, 2009 at 2:36 pm |
  8. Eduardo patiño Guerrero

    I think FIAT is becoming a monopoly due with the fusion it had with Ferrari. I think GM might not look forward a fusion with that enterprise.The solution should be to deal with the unions in order to buy shares and become in a corporation to save the industry.They can become in huge partners and entrepeneurs as well.

    May 7, 2009 at 9:56 pm |
  9. eghbal zazay

    I get to geting for 367 tag in one yaer to coming the addimistration of Power to have much comanication get moer have the ruslt take time and have to invest a time in real buget wich do you have much move on and get up could be a exsamnition have can you invet you money and you time. to get a ruslt wich do you make moeny of you firedom and have much time befor you check in after 10 yaers invetment of the serously imvestment develment just looking a exseamel for have meony poelpe goimg around wich poelpe ahve the best result to get better inevsitment hie money and time more details just have regouler time invetsment have more time.

    May 8, 2009 at 6:37 pm |
  10. wolfgang

    Fiat to the rescue of the US auto industry!

    Fiat has been transformed? Really? Transformed into what?
    I am an Austrian citizen and here in old europe we see Fiats actually driving on our streets.

    So I wonder: Where are these great new Fiat cars? All we get to see here is cheap, too small and incredibly boring. If Chrysler or GM want to survive in the long run they might need to reconsider their strategies.

    I can`t stop laughing. Fiat the rescuer! Unbelievable.

    May 9, 2009 at 9:25 am |
  11. Adam

    Americans seem to forget that GM and Ford receive Handouts from Foreign Governments to keep plants operating in their countries.
    The governments of Australia, UK & Germany have all handed over money.
    Why should the US be any different if Fiat takes control of Chrysler or Opel?

    May 18, 2009 at 7:01 am |
  12. Jazz4

    Ha, FIAT taking over Chrysler, strange bedfellows, two big time losers in the auto business . Memories are short, I had a FIAT in New York in the 80's and people made fun of me as I had so many problems with my car, the expansion for FIAT was Fix It Again Tony! It was common knowledge at the time that they had a very poor reliability. So they were forced out of the USA. And now they are back? They were even pushed out of the Indian market and now they are trying to make a comeback. FIAT is a mediocre auto company, Chrysler is worse....

    May 18, 2009 at 2:13 pm |
  13. sugeri

    First I am in Egypt and all I can say very few people buy a new fiat because of there quality and this is a thrid world country, if fait hopes to have any chance in surviving in the US they must raise all there cars to japanese quality,

    Quality was the problem to start, nobody wants to buy a car that breaks down especially when the cost of fixing your car in the US is very expensive. So unless fiat goes in and changes chrysler's and GM automotive quality standards no one will buy there cars and nothing will change and they'll go out of business!!!.

    May 18, 2009 at 8:45 pm |
  14. Scott Wilmore

    It is no surprise Chrysler has failed again, since Iacocca was at the helm their cars have gotten worse; heavy, ugly, gas consuming behoths. The PT Cruiser hasn't been restyled in over 7 years, and it was their only " hit".

    The Italians are masters of design, unfortunately when Chrysler/Maserati built a car, Chrysler designed the body, Maserati built the engine....the result was an unattractive and tempramental dud. Had it been a Maserati design with a Chrysler engine it could have flown.

    Even Daimler couldn't rebuild the Chrysler brand, but in the end it will be about distribution. Americans are finally demanding practical, fuel efficient and attractive cars. Alfa-Fiat could give the over-priced German segment a run for their money.

    Ford re-engineered Jaguar and made it reliable, Maserati is selling again...the Chrysler distribution system and Fiat, Alfa, Opel could be
    a winner.

    Ciao!

    May 22, 2009 at 5:28 pm |

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