Follows is an article written by good friend Marc Besso, regarding the proposed merger of Chrysler and Fiat.
Can Chrysler survive another merger?
There was talk that Chrysler couldn’t survive the merger, but it turned out to be completely wrong. It was American Motors that didn’t survive. That was in the late ’80s and you’d be hard pressed to find many in the auto industry (outside a few collectors & enthusiasts) that remember much about American Motors these days.
I remember them well. They were the ones that brought Renault back to the United States. What’s that you say? You don’t recall Renault ever returning? It was as a few, rarely-lamented models that sold under the AMC name for awhile; then as Eagles after the merge. (Alliance, Encore, Premier) All badges whose mere names promised something the backing corporation couldn’t uphold.
It turns out Chrysler only wanted American Motors because they held the rights to the Jeep name. Once Chrysler had control of that tasty morsel, the rest no longer interested them. They did get Francois Castaing–a wily Renault engineer that worked his way up from the race team to head of Product Development…..or some such fancy title. His replacement was even better. One Bob Lutz; a man who truly was incredible in almost every role in his career.
Fast forward another decade and it appeared that another merger might create the world’s broadest model line-up and [possibly] the next largest thing in the automotive world. Chrysler was going to merge with Daimler Benz. Hallelujah! Where do I sign up? It must’ve been a matter of weeks before the running joke was “How do you pronounce Daimler Chrysler? Simple, ‘Chrysler’ is silent!” Some believed it would bring the level of quality in Chrysler’s product up to the standard of the German companies. Others, like myself, knew the effect most likely would be a downturn in the quality of Mercedes’ products. Chrysler scored the equivalent of winning Lotto by getting a number of Mercedes-based chassis to build some very successful models on. (300 C, Charger, Challenger, Crossfire, Sprinter) Mercedes got…..mostly, screwed. They had a little fire sale of their own and pedaled Chrysler off to Cerberus a couple of years ago. Bob Lutz had long since moved onto GM: Think rat & sinking ship. (He bailed on GM just a few months ago for much the same reason) Bob’s no dummy!
Now the Fiat empire is offering (threatening?) to merge with Chrysler and become the global automotive giant it has always wanted to be. They’ll instantly have the conduit to sell their Italian products in the American market again. (Fiat cut and ran from the US about the same time Chrysler first went broke and asked the US Government for a loan) Enthusiasts got momentarily excited because Fiat is the parent company for Ferrari, Maserati, Alfa Romeo and Lancia. That moment faded fast when they realized Ferrari & Maserati were already sold in this country….and the other companies didn’t really offer much they cared to own anyway. (Save for Alfa, who only want to sell the 8C Competizione @ $250K/ea — we want the Brera @ $25K) There are already jokers saying things like: “If Fiat were meant to rule the [automotive] world it would be called Toyota.”
So, can Chrysler survive another merger? Some could argue that’s the only thing they’ve ever done right. Time will tell, but I don’t see this latest merger offering any long-term benefit to Fiat. If there’s a benefit to be reaped from this merger it’ll fall to Chrysler.
It’s late and I need to get some sleep. See me in another few years to find out how this latest merger works out for Chrysler.
~Mark
