Thursday 30 April 2009

Fiat to buy and run Chrslyer

Really, the way out of the Chrysler fiasco in the US has come to this.

First Daimler walked away when they realised that Chrysler makes no vehicles that are of any good quality or wanted in the market. Then the Private Equity players stepped in and now they have been burnt too (they are called Cerebus, you would have expected this with this name - see picture).

Now the US Government has stepped in to save this company. it's finance firm is shot, it makes awful vehicles and lots of the now not to popular SUV's.

In a last throw of the dice the US Government is offering to try and partially bail the bondholers (paying one third of the value of their bonds) and merging the company with Fiat. Fiat thinks its small underpowered cars like the Punto are a great story for the US market. Plus it can introduce the Alfa brand back into the US. This is pure genius, I can't see any downside myself.


dearieme said...

The larger world should cheer a policy that will lead to the elimination of both Chrysler and Fiat from the global overcapacity in car manufacture.

Simon Fawthrop said...

There's an intersting piece in this week's Economist that is worth a read. It about Sergio Marchionne, how he turned Fiat round and what he needs to to to Chrysler.

It does discuss the mess that the deal is in as well,

It concludes:

"Yet Mr Marchionne’s confidence that Chrysler can be saved using the same medicine that revived Fiat still does not fully explain why he is willing to risk trying to pull off an unlikely second miracle. Doesn’t he risk damaging his reputation and stretching Fiat’s thin management resources to breaking point? The answer is that he believes the car industry’s crisis will lead to consolidation and that Fiat, for all its recent success, is less than half the size it needs to be to survive in the future. And though he might not be ready to admit it, he has done pretty much all he can with Fiat in its present form—and there is a good deal more excitement and satisfaction in being the hunter rather than the hunted."

Simon Fawthrop said...

PS I've been on the wrong end of a Cerberus deal and they are bastards. If they couldn't make it work it really must be a basket case.

Unsworth said...

What about reintroducing Lancia, too along with the other old iron-oxide brands?

Interesting engines though.

Bill Quango MP said...

Quite Unsworth.
My Lancia beta rusted to nothing.Sold for £1 for spares.
The windscreen actually fell out of the frame with a mild push.
A horrible car, with a good engine.
On the day the MOT ran out, and I decided to dispose of it it never started again, despite having run fine up to that moment.

A Fiat/Chrysler. What kind of ugly hybrid will this be?

Anonymous said...

Brilliant to drive though, those Lancia Betas, *sigh*

Anonymous said...

Pity there are no British Car Companies to take advantage of this risky venture.

Wesley Lally said...

Debt Help

wes said...

Debt Help