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“Yes” yields yet more FCA-GM speculation

by Bill Cawthon on

Opinion. The GM Authority has primed the rumor mill by speculating on how General Motors and Fiat Chrysler Automobiles might merge, based GM’s exit as a major player in Europe and Sergio Marchionne’s quick “Yes” when asked whether he would consider spinning off Jeep or Ram at the New York Auto Show.

The story got some extra traction when it was picked up by Automotive News for this week’s print edition.

The GM Authority admitted it is a long shot, but suggested that GM could use Fiat to replace Opel in Europe (GM sold Opel to PSA Group earlier this year, after years of losses).

In addition to cars, the Fiat Doblo and Ducato and their Ram cousins would let GM continue competing in the light commercial van market, without leaning on Nissan. Alfa Romeo and Maserati would remain independent of Fiat; Lancia, now a single model sold only in Italy, would likely disappear.

The Authority wrote that Jeep and Ram would be merged with GMC, Chrysler would fade away, and Dodge would be the new Pontiac.

While potential FCA tie-ups are a never-ending source of speculation, this scenario makes no sense, and is based on the slimmest of premises.

First, Fiat is not a replacement for Opel, and cannot be one without massive investment in new product. Opel is a full-line brand; Fiat is not. Fiat does better in Italy; Opel does better in Germany and Great Britain (as Vauxhall), Europe’s largest new-vehicle markets.

Second, it makes no sense to merge Jeep and Ram into GMC; much of Jeep’s value is in its name and “GMC-JEEP” is unlikely to be a hit with buyers. Ram would only bring the ProMaster and ProMaster City commercial vans, because the Ram pickup would be redundant — even though it beats the Sierra in sales, and is closing on the Silverado.

Third — and most important — the question that drew Marchionne’s response came from Morgan Stanley analyst Adam Jonas, who was asking about a Ferrari-style spinoff, not a merger or sale. While Ferrari is legally separate from Fiat Chrysler Automobiles, it is still firmly under the control of the same people behind FCA and CNH Holdings: Sergio Marchionne and John Elkann.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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