Discussion in 'Mopar / FCA News' started by 1969 300, Aug 14, 2017.
I am sorry, but it seems that Marchionne's "go-to"auto industry tool is to create the next deal.
Yep. That was my conclusion too when I read that that's what he did too before going to Fiat.
Sorry Dave. I don't agree he has done that much saving. The fact that less than 10 years later here we are again worrying about the future of Chrysler, of Dodge, of FCA.
The wider, globally so in fact, perenially severely-discount-the-auto-industry-since-2008 world of finance/'the markets' are not worried, quite the reverse. FCA share price up well above 14$ on the nyse today, 3.x$ higher than FORDwhich just a few onths ago was better priced than fcau,
even as net-debt levels are plummetting AND fca's overall debt+ratings etc costs are down hugely compared to the usurious condition of their debt say 3,4,5 years ago (pre-Ferrari spinoff IPO.) To the best of knowledge the ONLY other large auto industry oem to have such a 'counter cyclical' (less rather than more worry by investors, capital+credit markets) trajectory is Suzuki(including especially Maruti Suzuki in India)? And perhaps arguably Daimler?
Some of this remarkable buoyancy is due to the 'white space', 'pent up demand' i.e., all else being equal: profitable growth-potential-filled nature of fca's multiple brands, especially FIAT latam, Jeep globally, Maserati and Alfa globally, Magneti Marelli and of course ferrari globally too. imo 'Chrysler', 'Dodge' and FIAT Europe are 'safe' precisely because fca's net-profitability is improving so much......on a not-only-usa-market basis and without much contribution at all financially (net net) from these otherwise large-sales-and-cashflow brands.
FCA and exor's best times will come precisely when 'we' will have to worry about the future of even-GM and Ford etc, namely when the onsetting recession or worse is doing its leftover-from-2008-crisis work of seperating the auto industry wheat from the chaff (so to speak)??
That wasn't an investment bank,that was the most "bearish"stock analyst on FCA, while at the same period gave $GM a $50 price target.
How about subsidizing the auto industry like a lot of the companies that the US is competing against?
Could say the same about Lynn Townsend or Lee Iacocca.
And that is supposed to make him great how?
At least Iacocca left Chrysler in an excellent position. Chrysler was one of the most profitable automakers by then. His mistake was letting his pettiness get in the way, bypass Lutz and bring in Bob Eaton, Mr Merger of Equals.
And to think FCA's CEO was trolling for an Alliance/Merger/Partner/Sale (AMPS) as we stumbled upon early in 2012 - over Five Years Ago.
So, by my calculations, that was before the 3rd year was complete.
I'd love to see the timeline of contacts - and, indeed, the content of those discussions - which were made where the topic included AMPS of what has become FCA. It would be quite a telling tale.
In the USA, 60 Minutes television interviews the CEO and includes references to the then new Dodge Dart. Who knew that he had already been trying to court deals for AMPS ?? ( This occurring before such things as a Plant Shuffle ). The open side was played for TV; the cloaked side? Well, not great for the brands.
I remember him saying on that 60 Minutes interview that he could only afford to make one mistake; just one.
Well, Dart and 200 make two already; and Fiat USA can be counted at least as one other big boo-boo...made of many mistakes like 500L, 500X...
Marchionne now believes in consolidation of suppliers and creating large powertrain suppliers that can service multiple companies.
This shows the man does not understand the industry well. He sees cars as appliances, all using the same engines, transmissions, infotainments, hvac, etc but with different sheet metal.
If he thinks the company.can win in that environment, he is delusional.
Why would I buy a Dodge Charger if it has the same engine/transmission as a Chevy Malibu or Toyota Camry?
The man who greenlighted Hellcats, leading to excitement in the marketplace, now thinks the industry should share high efficiency small displacement engines.
Marchionne's wants to make more vanilla cars, thinking he can get better margins.
I remember all the people who were squawking about the bailout. However, Japan, Korea, and China have been propping up their industries with zero interest loans and subsidies for decades. This nation is in desperate need of an industrial policy.
You have to remember that a lot of car buyers are of what I call the "appliance set." Those who buy Camrys, Accords, Corollas, etc. They could care less about what is under the hood as to if the car can get from point A to Point B. Ford and GM are using essentially the same transmissions. Electric Motors will not be differentiated as engines are. However, I agree that most performance-oriented buyers do care about Hemis and 5.0s and that is something that should still be unique to each manufacturer.
Sounds like NASCAR's car of tomorrow, Commonize everything and then apply different decals.
Yes that interview was at the very beginning of his tenure. Times, internal circumstances and conditions have changed as well as the world's economic circumstance have changed (to wit: emergence of China on the world trading stage). So, the comment, although, may have been relevant at one stage, certainly changed.
We must remember that these decisions have many moving parts. Some are hidden to us, yet have impact on the total picture. Yes, Sergio was/is a visionary and perhaps ahead of his time, as we have seen as others also have re-aligned their perspective on sedan production. As CEO it's his job to read the world economic conditions and point his enterprise accordingly.
I believe that the Dart and 200 were basically good products, but the long term progress and possibly survival demanded their dropping. Again, that's just how I read it.
The difference will come making these appliances unique in the creativity with which the common components are used (read- configured) and customized with specialized "Programming". We already see this with Tesla. Tesla's "Crazy Fast" mode is just such an example. While the Hemis and 5.0s were unique, that doesn't mean that new "appliances" won't also be just as distinctive.
To me, it's the old Wrangler 4x4 argument vs Cherokee 4x4 systems. The old vs the new. There is more that one way to get to an end goal.
The same Iacocca that tried to sell to Fiat for $2 billion that was vetoed by John Elkann's grandfather over the futures of Chrysler's Healthcare expenses.....Give us a break.....
Chrysler with 10% margins is an great position.
But consolidations, and than lower number of products, parts and components, is what is happening since decades.
And it is also the way to do business of bigger U.S.A. companies since more than one century.
The biggest being Standard Oil, going down to Microsoft.
Few diversity, very large "economy of scale".
It is the same applied also to agriculture, few biodiversity, few products. Luckily that trend is going in opposite direction, at least in some countries.
Are Dodge Charger customers not happy with their ZF 8HP ?
Will Jeep Wrangler not happy with their new ZF 8HP ?
Also this one use ZF 8HP.
Personally I would prefer, for example, for a Jeep Wrangler a specialized gearbox, with "low gear" integrated in the gearbox.
Yet, the CEO continued well beyond 2012. Not least was the famous Email outreach to Barra at GM . Recent months, Elkann put the kibosh on certain public statements.
From 1925 to aroun1960 Chrysler always had the largest engine and set out to set performance records. ALL CHRYSLER BRANDS shared running gear, transmissions, brake systems, and lots of interior parts. In MOST instances the engine blocks were the same except for displacement. Big differences were in the platform and unique dashboards. After that all the cars had the same basic engine except for performance parts, Chrysler only had smooth quiet V8s and one show off engine in the 300 letter cars. Ocasionally big motors made it into the small, reasonably priced cars. Chrysler always supplied fun to all brands till the 70s when all vehicles became basically the same. So you can pull off these shenanigans for about 30 years till people get bored.