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AN: Does Marchionne grasp lessons of GM-PSA?

Discussion in 'Mopar News and Rumors' started by aldo90731, Mar 13, 2017.

  1. aldo90731

    aldo90731 Active Member Level III Supporter

    JavelinAMX, jimboy, Ian and 2 others like this.
  2. JeepandRams

    JeepandRams Member

    The market has shifted toward trucks and SUV's while both have become far more fuel efficient.

    Alfa Romeo is giving FCA a new cutting edge non appliancecar platform.
  3. valiant67

    valiant67 Rich Corinthian Leather Level III Supporter

    It's like Battlestar Galactica:
    "All of this has happened before. But the question remains, does all of this have to happen again?"
  4. Alexbucks

    Alexbucks Member

    I was avoiding being the one to post this due to it being Larry.So thanks to Aldo!

    If I was the posting it, I couldn't avoid it being a "SmackDown on Larry". Now I can make my opinion more nicer.

    But a $10 billion give away to PSA offers no lesson to FCA (who runs a profitable European business), as well the very same $10 billion give away to PSA ONLY INCREASES THE CONCERTION OF GM's financial EXPOSER (Cash generation, REVENUE, AND PROFIT) TO U.S. SUV's AND PICKUPS BY's MARY's OWN Presentation to Wall Street which makes Larry's criticism & comparison OUT OF TOUCH.
  5. 77 Monaco Brougham

    77 Monaco Brougham Member

    AMEN ! ! !

    If Larry were being objective about this, the article would have blasted GM for its retreat from Europe, therefore making the company even more dependent on North America and Trucks / SUV's than they were before.

    I'm still kinda new here, and I'm not as familiar with Larry's work as some of you guys are. question is: Is there some sort of grudge that Larry has against Marchionne?......Or is it that there's no love lost between the two of them?
  6. freshforged

    freshforged Active Member Level 2 Supporter

    I think many critics skip over these facts. The startup of AR will be a short-term drain on finances, but will pay off in the mid-term with renewed platforms for Dodge and increased experience with integrating lightweight materials into volume production. It cannot be overstated how much gain Ram has made in efficiency for its 1500 over the last generation of trucks. The DT will build on this trend, so that when fuel prices rise (and they will eventually) the hit to sales won't be nearly as pronounced.
    guyverfanboy, danbek, UN4GTBL and 3 others like this.
  7. freshforged

    freshforged Active Member Level 2 Supporter

    Larry is a regular poster here and I believe him to be both fair and honest. Of course that sword cuts both ways.
  8. Deckard_Cain

    Deckard_Cain Member

    GM has a strong presence in China and they will probably try to bring Chevrolet into Europe in a more cost-effective way than Opel.
    As for the Alfa play. Lets see where that leads FCA. It's frustrating that both Fiat and Chrysler are starved of product.
  9. Adventurer55

    Adventurer55 Member

    The one thing that gets lost is, it's PSA, their past isn't any better then Fiat's or Chrysler's. How does Honda, BMW, etc. exist without partners? They seem to be doing ok. Why can't he stay focused on this company and make it better? To me, that's the mark of a good CEO.
  10. Dave Z

    Dave Z It's me, Dave Staff Member Supporter

    The new platform did not require Alfa Romeo to be reborn. Just sayin’. Remember Chrysler Corp selling the same car as a Plymouth, Dodge, and Chrysler? FCA can sell essentially the same car under multiple names too.

    Larger and more profitable and better diversified.
  11. 77 Monaco Brougham

    77 Monaco Brougham Member

    Although not required, it does make it really convenient to use Alfa Romeo as the test-bed for any new / exotic / cutting-edge technology before spreading it to the rest of the company's product portfolio.

    Don't forget the lesson the Old Chrysler never learned.....selling essentially 2 or 3 versions of every model is what helped the brand dilution and sales cannibalization get out of control. Otherwise, they might still have Plymouth and DeSoto.
  12. serpens

    serpens Member

    Both Honda and BMW have done a fantastic job of putting out product people want and diversifying as needed.

    That being said, BMW is partnering with Toyota on a sports car platform and has been rumored to be working on future FWD cars together as well. They also linked up with Mercedes, GM, and Chrysler in the past for a mild hybrid drivetrain (remember the Aspen/Durango Hybrid?).
    freshforged likes this.
  13. Prabhjot

    Prabhjot Member

    No offence to the person but imo Mr Larry V suffers as much as many others from an America-centric view and imo some amnesia about the deep structural facts about Chrysler Corp and GM+Ford too that caused all 3 to go (nearly) bust/die, on such matters (NOT on all matters FCA.) This too short and somewhat glib article is especially revealing of that. Without meaning-to-offend the person or his long standing understanding and witnessing of matters Mopar?!

    FCA America is NOT profitable enough to to fund anything. What NET rather than operating profits it has is almost entirely due to the offloading of DEBT onto Ferrari and the ending of the sequestering of fca usa capital.

    Marchionne's error was if anything was to've invested too much in n america (esp on the Dart, Chrysler 200 and launching Fiat there.) Even the new Canadian Windsor investments for the Pacifica may prove to've been too much for too little, given the terms on which it was or was not made, and foreseeable market conditions? Those money's should've been poured into Alfa Romeo, Jeep and Maserati at a quicker, earlier pace with global expansion/exports/scale in mind NOT usa-market-sales-only.

    Anyway: the entire premise is wrong.

    FCA has been (until a year or 2 ago with the Ferrari spinoff) a purely expensive-debt and cashflow based firm that has had a very heavy usa new investment load, including among-the-highest-marketing spends of any corporation of any industry in the usa market.

    The investments into Alfa are not even slightly at the expense of any other brand: they too are 'net debt' financed. And about time since it is essential for fca to have a global German-luxury-brand segments' fighting high-margin marque, alongside Maserati (and less so: Jeep) rather than get stuck pumping good money after bad in low margin, negative equity, structurally-inherently unviable brands like a usa-only low-scale Chrysler or a usa-only Dodge.

    In the 'due process' Dodge gains scale via platform etc sharing, otherwise unviable all-new model(s) made alongside the Alfa-s in Italy, and all of fca's brands will recieve what is clearly the bleeding-est-edge rwd/awd platform/chassis-engineering-light-weighted and awesome new powetrains that have been developed (firstly) for Alfa: giorgio's great stuff.

    The 'usa brands' don't belong to the 'usa' fan-base any more than Maserati, Alfa or Ferrari belongs to their Italian workers, or fans. Other than very very very indirectly. They 'belong' to FCA shareholders and managers etc.

    Those shareholders have not recieved a penny in dividends from the firms' supposedly glorious as-if automatic rebirth and sales boom in the usa since 2009. The firm's usa division has NOT earned back with some decent profit its very high cost of capital or its very high-investments. To enable it to do so even as the usa car market has tanked and the market overall is beginning to downtrend (margins) is precisely why investments were/are needed evermore in white space segments (namely: Alfa, maserati and one or 2 new Jeeps, one or 2 new rwd muscle focussed Dodges, Wrangler pickup....) and white space regions/markets (eg, Fiat+Jeep in LatAm, Jeep and hoprefully Chrysler and Alfa made-in-China.)

    Even as all non-usa divisions and brands are also profitable (nevermind the relatively recent recessions in both S Europe and LatAm), and increasingly so, even as precisely because of the timely cutting-of-losses (i.e., ditching the Dart and C200 and delaying the next gen 300, ditching the sub-prime market models in the usa, reducing fleet sales etc, FCA's overall profiability, debt-reduction AND share prices are improving 'fast and furious'. Just as the usa market/business cycle could be downturning (quickly or slowly) again for ONLY the first time since the 2008 near-death of CDJR+Mopar+all those workers+all those benefits+the UAW, etc.

    Marchionne openly says and knows very well what the rest of us keep pretending is no problem at all: the underlying business case (in terms of earning their way in and through a full business cycle) of the usa OR the italian brands is NOT yet secure, will only be tested when the usa market downturns (i.e., soon) and absolutely therefore is a race-against-time to get rid of all the more-expensive-than-all-other-autofirms net debt, IF it is not to merge the firm and all its brands/plants/workers with another large firm, by 2018/19/20.
    Alexbucks and 77 Monaco Brougham like this.
  14. FGA cheerleader

    FGA cheerleader Member

    Maybe Larry lost his busola.
  15. Erik Latranyi

    Erik Latranyi Well-Known Member Level III Supporter

    This discredits your entire post.