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FCA + GM Merger?

6K views 50 replies 26 participants last post by  Bigdodge 
#1 ·
I heard on CNBC yesterday and have read articles at other sources that Sergio Marchionne is looking to merge FCA with GM by 2018. If this were to actually happen, I have no idea what to expect in terms of what engines, cars, technology we can expect as the result? How do you guys feel about Challengers and Camaros being sold at the same dealer? Maybe they'll just keep the dealers as they are, maybe not.
FCA Chairman Elkann confirms Marchionne sent merger email to GM
 
#2 ·
If FCA merged with GM (which the news says GM isn't interested at all) I think only Jeep would stay around and everything else is dropped. Maybe Ram stays... But with the brand shedding in the past I can't see them keeping the Dodge and Chrysler brand. As for the Challenger, I think it would be dropped pretty quick. The pony/muscle car/whatever you want to call it market I think is too small for GM to try to manage 2 of the 3 options in that market and compete against itself via the Camaro.

GM may be interested in some of FCAs European brands to expand their presence there but I really know very little of that market.

Obviously just my 2 cents, I am not an economist nor work in the auto industry.
 
#3 ·
So....all you could choose from is either GM or Ford? Uh, how about no.

Since when could Jeep, Ram, Dodge, and Chrysler not stand on it's own two feet?
 
#7 ·
Since when could Jeep, Ram, Dodge, and Chrysler not stand on it's own two feet?

uuuuh...What? Since 1979. Either you are unaware or have forgotten the history of Chrysler. In addition to the federal government bailout back in the day, they were rescued by Damiler-Benz in 1998. Then they turned around and sold them for a big loss to Cerebrus Capital in 2007. They then needed another federal government bail out in 2009. :surprise:


Chrysler And The 1979 Bailout


Daimler-Benz announces purchase of Chrysler Corp. - May 07, 1998 - HISTORY.com


Daimler clinches Chrysler sale to Cerberus: source | Reuters
 
#5 ·
given how GM 'manages' their brands - look at what happened with their divisions...and market share.

It wouldn't be a good outcome.
 
#6 ·
For one thing, I already have the Challenger I want so I don't really need to worry about it. If it were to happen though, I wouldn't ever buy a Chrysler vehicle again. Every Chevy I've ever seen has been a bullet proof motor wrapped in a bag of crap. No thanks. I don't want a vehicle where all the markings come off of everything I touch and that squeaks/rattles like crazy. I don't know how GM could ever consider cracker jack box construction to be acceptable.
 
#14 ·
There is no way this would happen. All the brands are doing well but Fiat! As long as they don't do anything stupid when they have the model changes for the 300/Charger/Challenger then things will be just fine!
 
#15 ·
#17 ·
Chrysler sales are doing well, correct. However, if you look under the covers there are underlying issues. Development costs are higher than other major manufactures, profit level is much lower than other major manufactures and the extremely high level of debt is not good. Add on top of that botched launches of the Dart and Cherokee and now it has been recalled, what, three times for transmission issues. There are some real horror stories out there about the 9 speed automatic. The Dart has been a sales flop. And last week we hear that basically all new products have been delayed 1-2 years.

The Journey is Ancient in the Automotive world along with Compass and Patriot.

If gas prices spike to $5 or higher FCA is in big, big trouble

A merger with GM is a terrible idea, way too many competing products. All GM would want is Jeep. RAM is a very good profitable product but developement costs for three different full sized truck lines is ridiculous.
 
#18 ·
If they do merge the only thing that will survive will be the Jeep brand. I just don't see this happening at all though even though what the article is suggesting. Remember the auto industry is different than any other industry and what you think may happen never does or will go a totally different direction. Who's to say Ford would not jump in??? Like I said. You just never know what could happen.
 
#19 ·
Marchionne is just trying to get the company ready to weather the next economic downturn, which we all know is coming. Things are rosy now in an up market with low gas prices, but FCA still has low profit margins nonetheless. Also, they have an 11 billion euro debt load, which is why Ferrari is on the block.
I doubt they'll end up with GM, but a merger is clearly in the future.
 
#27 ·
This! He doesn't have the money to do what he wants with Alfa Romeo and maserati. That and its a contract year for the union. Problems with the 9speed trans has been addressed. It was a design flaw by ZF that they fixed on their end but didn't bother to let Chrysler know until problems started popping upv
 
#22 ·
F1 racing is SOOOOOOOOOOOOO stupid expensive, if Sergio pulled the Ferrari team from that form of racing he could just about pay off his debt. The last few years they have totally sucked at F1 racing. The last time they were really, really good is when Michael was still driving for them.

Wouldn't hurt the value of the owners of street Ferrari's either.

Currently he's pushing the merger with GM on 2 fronts, (1) that the American market can't support more than 3 big manufactures ie GM, FORD, Toyota, and (2) that development costs are extremely high .. Well that's his own fault.

He's trying to enlist the help of activist investors who do hold a TON of GM stock to help push his ideas. I think they'll look at this with the same level of dubiousness most do, simply put Sergio is just trying to save his soon to be fired (hopefully) ass.

In the mean time I wouldn't worry too much about this. Chrysler / Dodge / RAM / SRT are doing just fine.

JMONSHO
 
#24 · (Edited)
It would cost to much money and take to long for GM to buy it then kill the brand. If they did buy it and have ideas of killing the brand, it would have to take time, they could probably instantly drop a few turd models, and slowly over the years kill it after they have made some of their money back. But jeep and the minivan I dont think would go away

Nothing surprises me with dodge, they have been near death multiple times. Problem with dodge is they dont sell enough volume of the 4 door sedan and the compact car.
 
#25 ·
FCA is not fine for those that aren't owners - the investors, the employees, the suppliers, etc. Their cash flow numbers are terrible because their is not enough cash coming in and the margins are very small.

Sergio claims that Alfa Romeo is on target to sell up to 75,000 Alfas in the U.S. alone in the introductory year of 2017/2018. When was the last time a new/re-introduced auto marque sold 75,000 units to retail customers in the U.S. in the first year? Most consumers have never even heard of Alfa Romeo, much less are chomping at the bit to buy one.

Fiat in the U.S. hasn't achieved the projected market share. Numbers are slowly improving, but no where near the projected numbers from Sergio's claims.

http://www.autonews.com/article/201...59/dealers-fume-as-fiats-u.s.-comeback-stalls

We represent the owners' portion of the equation and while those of us who have a shiny new 2015 Scat Pack or SRT in the garage are happy for the design, engineering, and background work that was done 4+ years ago; the investors, executives, and managers are cringing right now over sales figures, profitability, margins, unit costings, losses, pending EPA/DOT regulations, CAFE standards, market trends, and thousands of other factors that most owners never consider.

In the auto industry, one can never, ever state that the company "is doing fine". The auto industry is a dynamic entity that is influenced by government, financial markets, popular culture, special interest groups, insurance industry concerns, and many other factors. The product we just bought was the work of years ago and what happens today in the world influences what we will have available in the next 5 to seven years. Ask anyone in business to foretell what will happen next year and they will cringe. Ask them to foretell what will happen in 5 years and they'll likely throw up their hands and scream.

It really isn't just about adding X more horsepower.
 
#28 ·
The other mis-step is bringing over a low-end Fiat model that is on the small side and somewhat crude as refinements go.

The Mini Cooper has been on sale here in the US since 2001 and is an established model that sells in the volume it does today - with many variants from what it started as.

The Fiat 500 is much smaller than the mini and coupled with the decline in gasoline prices over the past couple of years, buyers are going to larger cars. So a combination of a not-so-well executed model and being cramped inside isn't establishing Fiat in any big way.

Then there's the sole Alfa Model the 4C -and its pretty expensive for what it is.
-another non-volume seller.

Essentially what Fiat needs to do is compete head-on with the kind of lines as VW sells - that's their main competitor in Europe...why they either bring out a novelty or a high $$ two seater which both are going to have more limited appeal.
 
#30 ·
Ya Daimler didn't rescue anyone. Chrysler had something like 12 or 14 billion in cash and that's why Daimler wanted it. They went on a shopping spree with that, ran us into the ground with some of the worst models (i said SOME) we have ever had and left us for dead.
 
#33 ·
Fiat CEO is a visionary and thinks ahead and like a CEO; his job is to maintain, and develop shareholder value and that takes strategy and years to create, launch and implement an M&A of that size;

the GM merger is off the table anyway; if he has to step down in 19 then he has no time to make this happen

it's capital consolidation to fight Korea, Japan, India car makers; to also survive he needs also to move away from Europe which is costly in labor costs

will be interesting to see what comes out; for us Mopar guys who the F knows what will happen to us..in the name of shareholder value and market dominance....

sucks!

ODP
 
#39 ·
Jeep-Dodge can spin off w/ the right pool of PE, stay w/ us in the 50 star country

the Chinese and all these fine peeps can keep Chrysler and make bad asses electric powered 300C's all day
 
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