Chrysler has gone bump !

[Barakka]

So Chrysler has filed for bancruptcy, and they have until 0500 Friday (BST) to accept a deal from the US government that will see them get a cash injection providing they accept to be 20% (initially, then 35%) owned by Fiat.

Pro's for Fiat
Chrysler's dealership network in the US to sell Fiats
No cost to Fiat to get a stake in the US market
Some large platforms (truck/4x4) that Fiat have been after for donkeys years

Pro's for Chrysler
Immediate access to Fiat platforms (500/G.Punto)
Access to Fiat's expertise at producing small fuel efficient cars
Cash injection from US Gov

[nichomach]

Technically, they've filed for Chapter 11 protection from bankruptcy, but your points are very well made - I can actually see this working for them.

[kalniel]

But presumably all the workers will lose their current benefits etc. that they would rather go bankrupt over than cut? Is such a workforce going to do well?

[Barakka]

Details confirmed, the new Chrysler;

• Fiat will take a 20% stake, with the possibility of it rising to 35% if performance targets are met. It could reach 51% by 2016 if Chrysler's government loans are fully repaid
• The Treasury will have an 8% stake, a union-run trust fund VEBA will take a 55% stake, and the governments of Canada and Ontario will gain a combined 2% stake
• Current owner Cerberus will forfeit its 80.1% stake
• Daimler will give up its remaining 19.9% stake in Chrysler
• Chrysler bondholders will receive $2bn (£1.35bn) in cash in exchange for forgiving their $6.9bn debt
• The new company will be run by a nine-person board, with six picked by the government and three by Fiat. The board will pick a new chief executive.

Who'd have thought that Fiat could have turned it round from needing emergency bailout assitance from GM about 5 years ago to becoming so strong that they supply GM, Ford, Suzuki, SAAB, and now are going to end up owning Chrysler !!!

[Funkstar]

Who'd have thought that Fiat could have turned it round from needing emergency bailout assitance from GM about 5 years ago to becoming so strong that they supply GM, Ford, Suzuki, SAAB, and now are going to end up owning Chrysler !!!

It's like Porche being the smallest of the german car makers yet investing vast amounts of cash in VW over the past few years.

[NWallace]

Has any Fiat based co-operation / merger not involving another italian company ever worked?

The Lancia Thema / Saab 9000 project went so wrong there was no parts interchangeable between the 2 cars.

[Barakka]

Has any Fiat based co-operation / merger not involving another italian company ever worked?

The Lancia Thema / Saab 9000 project went so wrong there was no parts interchangeable between the 2 cars.

Erm.. Sedici and Suzuki SX4, Grande Punto and Corsa, new 500 and Ford Ka, to name a few.

Now it seems Fiat is in talks of takeover bid with GM Europe, so Opel and Vauxhall, they say they will certainly keep the factories in Germany open for the near future but no mention of the UK Plant. A Canadian parts company has also expressed an interest but only wants a stake in GM Europe, whereas Fiat want the whole thing.

[Vimeous]

If Fiat gets GM Europe there will be significant consolidation.
It was suggested last night the Unions expect Luton would get the chop.

You'd have to ask where Opel and the extremely-localised Vauxhall would fit in the Fiat portfolio.
My initial thoughts are GM Europe is significantly more successful and selling bigger motors in northern europe than any Fiat brand. Maybe that makes them essential to Fiat's long-term future as Chrysler can offer the same in the US?

Am I right in saying Saab will not be part of this latest speculation? Their fate is already being decided as a lone entity.

Besides all this can Fiat pay for all this expansion by acquisition? Like Rover they've not get the best financial track record and like Rover they're adept at self-destruction should it come down to it.

Fascinating times

[Barakka]

You'd have to ask where Opel and the extremely-localised Vauxhall would fit in the Fiat portfolio.

They're not that far apart in some areas, GM and Fiat were close bed fellows a couple of years ago with GM eventually paying Fiat $2bn to get out of a contract that would have forced them to buy Fiat. So not sure if that has given them a closeness that means they're going to help GM out, or if it's more that the worm has turned.

Am I right in saying Saab will not be part of this latest speculation? Their fate is already being decided as a lone entity.

Yep, The Swedish government is stepping in to sort Saab out.

Besides all this can Fiat pay for all this expansion by acquisition? Like Rover they've not get the best financial track record and like Rover they're adept at self-destruction should it come down to it.

The German government is basically going to help bail-out Opel providing they have a buyer (similar to the US goverment and Chrysler). The problem is that GM appparently know they need to consolidate, and ideally in Germany (where they employ over 25,000), but if Germany is footing the bill will they wimp out and target the UK (where they only employ 5,000).

[NWallace]

Erm.. Sedici and Suzuki SX4, Grande Punto and Corsa, new 500 and Ford Ka, to name a few.

How many of them are Fiat buying floorpans though?
The Corsa and KA development goes back further than the Grande Punto and New 500.

Oh yeah, and Rust. Pre-FIAT Lancias are sought after because even in the same model the post-Fiat aquisition ones rust much worse.

Saying that look at the difference between the Kangoo, Berlingo and Partner. Renault and PSA take the same chassis and some how manage to create 3 totalyl different handling characteristics.

[Lee H]

There is a problem though.

If fiat gain a fair part of Chrysler and try to launch the 500 series or in fact the punto series in America, I reckon it's going to fail.

Until you can get the American public to stop thinking " Yeah...Baby, I got me a 6 litre V8 that does 17 miles to the gallon. I love biiiiiiig engines" (and in some states - their close family relatives, but thats another topic for another thread ) It's never going to work. Even though most of the time, their going from A to B in the straightest line possible, travelling at a speed of what, say 60-70 mph.

What they need to try to do is educate the masses. Inform them that the fercious, growling big litre V6, V8's are not needed, while they keep banging on about how their CO2 emissions are lower than low and better for the butterflies or the swans and even fluffy kittens.

Education before innovation is the key here, but, it will fail due to the love of big engines.

[Funkstar]

Gas prices hit $3 last year. Things changed pretty quickly.

Speaking to my cousin who stays in Houston (home of the SUV and pickup), even there you notice the difference in number of small cars going around. Minis are getting popular, along with many other small cars.