Is Fiat Helping Chrysler--Or Fiat?


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Chrysler's ''saviors'' always had their own agendas, which wrecked Chrysler. What about the new savior?

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This wouldn't be a new experience for Chrysler. It's been "saved" before by companies more interested in their own agendas.

Before it merged into Daimler of Germany 11 years ago, Chrysler was perhaps the most successful carmaker in the world. Its market share was growing and its profits were large. But it was "global," so it went into a "merger of equals" with Daimler. But Daimler's boss really wanted a captive nation. Within two years the Chrysler executive team that had been so successful was gone, replaced by second raters and Germans. We all watched Chrysler sink after that.

Then came Cerberus, the private equity boys who said they wanted to rebuild Chrysler but went about it by putting in one of their team--who knew nothing about the auto business--and killing new models and old models, and stripping the company of talent. Lines that needed a little help, like the Pacifica crossover, the Magnum wagon--one of the standout Chrysler designs--and the PT Cruiser, were killed. In the end the company was left to bankruptcy.

On Wednesday we will hear of Sergio Marchionne's plans. Maybe they'll be wonderful--but from here it doesn't look that way.

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The Daimler, Cerberus and Fiat deals were not done to "save" Chrylser. They were business ventures intended to provide a positive impact to the aquiring (yes, Daimler aquired, that was a merger in name only to sell it) companies.

Fiat is going to use what they can from Chrysler (brand, plants, people, technology) to better Fiat. If that means completely dismantling the "palace" in Auburn Hills, they will. Fiat's goal is not to preserve Chrysler, if you think they are a savior, you are going to be disappointed. Fiat will use this to grow thier market share in the US. They can brand Fiat's as Chrylsers/Dodges or sell Fiats as part of the current dealer network.

I have not seem the plan, but I can bet there will be plant closures, product line trimming, and engineering, purchasing, and other admin consolidation.

My guess is that Jeep (Wrangler and Grand Cherokee only), Dodge Ram trucks, Minivans and LX large sedans are about all that Fiat will keep. The rest either don't fit current market demand (SUVs) or Fiat can supply fresher product than the current offerings in small/mid-size sedans.

why would Fiat not have what's best for Fiat as their primary goal?

Why would anyone think otherwise?

My sister used to work for Jeep, then when Chrysler was bought by Daimler, she took a position with Daimler in Atlanta. When Cerebus bought Chrysler, she told me they only wanted Chrysler Financial to go along with GMAC which I guess they already owned. So even though she originally started work for Chrysler, she is now an employee of Cerebus.

Daimler only bought Chrysler for the cash reserves which I have heard were between 12-20 billion dollars US. They really messed Chrylser up. We referred to DaimlerChrylser as DumberChrysler. Daimler would project a certain amount of production from the assembly plants. Then we would build to reach that number. It didn't matter to them if those vehicles were sold. That is why you would see Jeeps parked all over the city. We had to build to what Daimler projected, with no regards to the sales figures.

Now with Fiat, I am actually optimistic. They have really tried to change the mind set of the way business is done. In meetings, they have told management that about 40% of them wouldn't be able to handle the changes that are coming. The Fiat people told management that while the union people were in the same meeting. Every Monday at lunch, the plant manager and someone from the union hold a lunch where you can go and ask questions or find out more information on the changes that are happening. I have never seen such a flow of information down to the line workers in my 15 years of being there. Fiat was in trouble a few years back and what they are trying to do with Chrysler is what they did that saved them. I think this is a venture that will make both companies stronger.

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