[aldo90731]

If they make a car you want, then buy. If not, don't. If I wanted a new Wrangler, my decision would not be changed because a minivan is delayed.

I am not buying a vehicle from a company that is running low on cash, for the third or fourth time in one decade.

If they can't make it work with billions in government aid, forced mergers, and a recovering US economy, they never will.

Sorry, but this is as good as it gets.

I don't even want to think how FCA would fare if fuel prices started climbing and the economy stalled.

 

[aldo90731]

Is resale value really looked at in this detail? If FCA ceased to exist tomorrow, would my Liberty and Wrangler drop a large amount in value? And how is this any worse of a house of cards than the previous many many many years when we were all buying Chrsyler products?

Your Wrangler won't. Wrangler is a franchise onto itself; people will always look for them. I bought one as Chrysler headed into bankruptcy without concern, and that's why I have two of them now. Your Liberty is already depreciated, so why would you care?

But I am not going to fork $50,000 on a top of the line Chrysler 300, a Grand Cherokee, or a Challenger 392 with these news floating around...I don't want to lose my shirt!

 

[MoparNorm]

If they make a car you want, then buy. If not, don't. If I wanted a new Wrangler, my decision would not be changed because a minivan is delayed.

But you do realize that the JL Wrangler will be delayed?
And I'm not sure how they are going to do it, but the 5 speed deal is over soon and the 8 speed will be needed to replace it, so it seems that instead of a new vehicle, or refresh, they will just piecemeal the 8 speed into production as soon as they are able and the new plant is just a gleam in someone's eye.
Toledo South workers will continue to be taxed to the limit as Wrangler production bursts at the seams.
But never mind that, it's a marginal selling antiquated vehicle which needs to wait until billions are spent on Alfa's selling at least a dozen per month....

 

[valiant67]

Is resale value really looked at in this detail? If FCA ceased to exist tomorrow, would my Liberty and Wrangler drop a large amount in value? And how is this any worse of a house of cards than the previous many many many years when we were all buying Chrsyler products?

Having bought a used Chrysler product not long before Iacocca "rescued" Chrysler I can tell you resale values were in the tank. Poor resale value is why leasing went away on a lot of Chrysler products from some sources in the 2008 time frame. Just two examples of how resale values are affected by corporate health.

 

[JKU12]

I respect everyone's opinion. I just come from the thought that if I want an SRT 50-60k vehicle, I'm gonna get it. And drive it like I stole it. I also buy my vehicles, so I know my perspective might be different.

 

[aldo90731]

Isn't the cart being put before the horse? Now it almost sounds like the nails are hammered into the coffin. All because of some articles? Sometimes tough decisions have to be made and you can't always please everyone at the same time. But how can anyone pretend they exactly know that by 2018 or 2019 FCA's North American product portfolio will be totally uncompetitive?

Sorry, I can't speak for FIAT fans, but those who have been with Chrysler through thick and thin, know this is how it always starts: with rumors and uncomfirmed reports of cashflow issues...

 

[MoparNorm]

I respect everyone's opinion. I just come from the thought that if I want an SRT 50-60k vehicle, I'm gonna get it. And drive it like I stole it. I also buy my vehicles, so I know my perspective might be different.

I understand completely your point of view. My angst is not so much who builds the vehicle, my Daimler built Dodge pickup has plenty of issues, my Cerberus built Patriot has been absolutely trouble free...and a lifetime warranty I might add.
My Fiat built Wrangler has a few developing issues with the Pentastar.
My biggest concern is the vehicles they build, not the delays, which may actually be good if they delay more fiatization of Chrysler.
Basing everything on questionable quality Fiat architecture isn't providing the vehicle I want to buy, or the Jeep I need.
AMC built them, Chrysler did, Daimler started the downward euro suspension trend and Fiat makes it complete.
There is a lot more wrong than just delays.
Unless they really build a new Wrangler factory and use it to build real Jeep Wrangler variants, maintain Dodge Trucks and don't screw up Chrysler RWD and Dodge V-8's, I may have purchased my last Mopar

 

[aldo90731]

I don't see evidence from actual sales figures that US buyers won't buy Italian or British cars. The German and Japanese brands are all full-range players, with models in every large segment, and models that start at fairly modest price points (especially the Japanese, but the days when a BMW was a rich-man's car are gone too). The British and Italians only play in smaller niches, and in the case of JLR and Maserati, in the top price segments of those niches.

Looking at the numbers: Jaguar/Land-Rover offers cars at around Maserati's pricing, and SUVs well above what Jeep can sell. With these, JLR shipped 67k units last year. (Of which, 16k were Jaguar brand, 51k RangeRover and LandRover).

Oh, but the evidence is there. You may want to trend Jaguar sales over time to notice that it didn't voluntarily choose to be selling so few units. And Land Rover is the perennial poorest-ranking brand in the US in terms of quality by a wide margin, to the point that it is a tradition.

The British have a well-established reputation in the US for building gorgeous automobiles that require constant fixing, regardless of it being under warranty or not.

Here are the 2015 Vehicle Dependability (after 3 years of ownership) results. Look at the bottom of the chart: those two brands trail the WHOLE industry by a statistically significant margin (i.e., there is NO disputing they suck); according to the footnote, Jaguar is missing because it failed to sell sufficient vehicles in 2012 to provide valid sample size.

 

[HotCarNut]

I understand completely your point of view. My angst is not so much who builds the vehicle, my Daimler built Dodge pickup has plenty of issues, my Cerberus built Patriot has been absolutely trouble free...and a lifetime warranty I might add.
My Fiat built Wrangler has a few developing issues with the Pentastar.
My biggest concern is the vehicles they build, not the delays, which may actually be good if they delay more fiatization of Chrysler.
Basing everything on questionable quality Fiat architecture isn't providing the vehicle I want to buy, or the Jeep I need.
AMC built them, Chrysler did, Daimler started the downward euro suspension trend and Fiat makes it complete.
There is a lot more wrong than just delays.
Unless they really build a new Wrangler factory and use it to build real Jeep Wrangler variants, maintain Dodge Trucks and don't screw up Chrysler RWD and Dodge V-8's, I may have purchased my last Mopar

I'm starting to look purely at the used market where my exposure to a massive hit is much lower. I can put a full custom leather interior into a 300 for about $3-5k depending on if I have the dash and full door panels done. Makes considering a last-gen SRT that's half MSRP much more attractive, especially given the crap Sergio is pulling....

 

[aldo90731]

http://www.thestreet.com/story/1317...-may-be-rooted-in-sergio-marchionnes-grand-strategy.html?puc=yahoo&cm_ven=YAHOO

This offers some interesting insight. It appears the delays could be part of FCA's strategy to bargain with the UAW.

Interesting, but I don't buy it.

I don't see Marchionne exposing himself publicly, to getting rebuffed by the whole industry, and making a fool of himself as a "bargaining tactic".

Good to see Wall Street still gives FCA a solid "recommend", though.

Aldo

 

[Zagnut27]

Absolutely, but I was responding to Aldo, who said he wanted to buy a new Challenger, but wasn't going to because of all the product delays, etc. Your analogy would only hold true if he was interested in an entirely new Challenger on a new platform. Not sure from the original post.

I just don't understand the idea that a company produces a car that I want to buy, but I'm not going to buy it because some other car they produce is behind schedule - unless the car I want to buy is the one super behind schedule.

Actually, your second point was the one I was trying to make.

 

[dana44]

Well, I am to the point I will pick and choose what components I want and simply build my own. This way, if it doesn't work or goes wrong, nobody to blame by myself, and if it goes right, I'll brag about the components and make everyone jealous.

 

[duster92]

Oh, but the evidence is there. You may want to trend Jaguar sales over time to notice that it didn't voluntarily choose to be selling so few units. And Land Rover is the perennial poorest-ranking brand in the US in terms of quality by a wide margin, to the point that it is a tradition.

The British have a well-established reputation in the US for building gorgeous automobiles that require constant fixing, regardless of it being under warranty or not.

Here are the 2015 Vehicle Dependability (after 3 years of ownership) results. Look at the bottom of the chart: those two brands trail the WHOLE industry by a statistically significant margin (i.e., there is NO disputing they suck); according to the footnote, Jaguar is missing because it failed to sell sufficient vehicles in 2012 to provide valid sample size.

GM has certainly improved themselves. No wonder they told Sergio to jump in the lake!

 

[Zagnut27]

I understand completely your point of view. My angst is not so much who builds the vehicle, my Daimler built Dodge pickup has plenty of issues, my Cerberus built Patriot has been absolutely trouble free...and a lifetime warranty I might add.
My Fiat built Wrangler has a few developing issues with the Pentastar.
My biggest concern is the vehicles they build, not the delays, which may actually be good if they delay more fiatization of Chrysler.
Basing everything on questionable quality Fiat architecture isn't providing the vehicle I want to buy, or the Jeep I need.
AMC built them, Chrysler did, Daimler started the downward euro suspension trend and Fiat makes it complete.
There is a lot more wrong than just delays.
Unless they really build a new Wrangler factory and use it to build real Jeep Wrangler variants, maintain Dodge Trucks and don't screw up Chrysler RWD and Dodge V-8's, I may have purchased my last Mopar

A recurring theme in your post is one failed "partnership" after another. Maybe it's time to stop the mergers, and stand on their own feet again...if that's even possible anymore.

Maybe if things get really bad, they'll sell Jeep to Ford...but Ford would probably screw it up by making all the Jeeps FWD like the Explorer...oh, wait...

 

[aldo90731]

GM has certainly improved themselves. No wonder they told Sergio to jump in the lake!

LOL

Actually, Buick has been in the top 3 for decades...but hardly anyone knows...

 

[moparbob]

This just in...

Peter De Lorenzo ‏@PeterMDeLorenzo 2h2 hours ago
Peter De Lorenzo retweeted John Stoll

Desperation. #runningoutofcash #runningoutoftime

John StollVerified account‏@johndstoll
Fiat Chrysler’s CEO is recruiting activist hedge funds to sway GM to consider a merger http://on.wsj.com/1dYIXdj @WSJ

http://www.wsj.com/articles/chrysler-boss-recruits-activists-to-prod-gm-into-a-merger-1433806966


Chrysler Boss Recruits Activists to Prod GM Into a Merger
Sergio Marchionne believes hedge funds can sway rival’s board to accept his entreaties

By
ERIC SYLVERS And JOHN D. STOLL

June 8, 2015 7:42 p.m. ET

Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne is reaching out to hedge funds and other potential allies to prod General Motors Co. into a merger, according to people familiar with the matter.

His pursuit of outside investors is only the latest move in Mr. Marchionne’s drive to find a partner for the Italian-American auto maker, which logged $108 billion in sales in its most recent fiscal year. But contacts with activist investors—only months after GM agreed to hedge fund demands to buy back billions of dollars in stock—have yet to land a patron, these people said. A similar strategy could be employed with at least one European auto maker, they added.

 

[JKU12]

GM has certainly improved themselves. No wonder they told Sergio to jump in the lake!

I wonder why it hasn't translated into better sales for Buick and Caddy.

 

[JKU12]

This just in...

Peter De Lorenzo ‏@PeterMDeLorenzo 2h2 hours ago
Peter De Lorenzo retweeted John Stoll

Desperation. #runningoutofcash #runningoutoftime

John StollVerified account‏@johndstoll
Fiat Chrysler’s CEO is recruiting activist hedge funds to sway GM to consider a merger http://on.wsj.com/1dYIXdj @WSJ

http://www.wsj.com/articles/chrysler-boss-recruits-activists-to-prod-gm-into-a-merger-1433806966


Chrysler Boss Recruits Activists to Prod GM Into a Merger
Sergio Marchionne believes hedge funds can sway rival’s board to accept his entreaties

By
ERIC SYLVERS And JOHN D. STOLL

June 8, 2015 7:42 p.m. ET

Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne is reaching out to hedge funds and other potential allies to prod General Motors Co. into a merger, according to people familiar with the matter.

His pursuit of outside investors is only the latest move in Mr. Marchionne’s drive to find a partner for the Italian-American auto maker, which logged $108 billion in sales in its most recent fiscal year. But contacts with activist investors—only months after GM agreed to hedge fund demands to buy back billions of dollars in stock—have yet to land a patron, these people said. A similar strategy could be employed with at least one European auto maker, they added.

His high-profile calls for industry consolidation have led some analysts to characterize Mr. Marchionne’s pitch as a desperate one, reflecting Fiat Chrysler’s weak operating margins. Although the company is now profitable, a potential industry downturn and the future costs of meeting emissions regulations and investing in new technology leave sizable risks.

Mr. Marchionne has been emboldened by the recent success of activists at GM, the people said, and views them as a means to force consolidation on the fragmented auto industry. The 62-year-old executive has argued for months that excess production, especially in Europe, and duplicate engineering and other costs need to be addressed to boost profitability. He took his rationale to several auto makers around the world with the support of the company’s chairman.

Fiat Chrysler declined to comment.

Still, with margins well below rivals, it hardly makes an attractive merger partner. Its North American operating margin, for instance, was 3.7% of sales in the first quarter, half of GM’s.

GM has an acrimonious past with Fiat and Mr. Marchionne, who in 2005 got the American company to pay $2 billion to get out of an obligation to buy Fiat’s ailing auto business. That fallout also led to the companies dissolving a five-year-old partnership to jointly produce engines and transmissions.

GM resisted Fiat Chrysler’s more recent entreaties, including an appeal earlier this year to Chief Executive Mary Barra for a merger of the two companies. GM has broader scale and has transitioned many of its products to global vehicle architectures, an important move that reduces duplication and boosts production efficiency.

GM is about a decade into an internal consolidation that executives see as having effectively lopped off billions of dollars in costs and positioned the company toward achieving a leading position on return on invested capital. Ms. Barra has routinely said the management team won’t entertain distractions from that goal.

A team of activist investors, led by former hedge-fund managerHarry Wilson, approached Ms. Barra earlier this year pushing GM to agree to buy back $8 billion of its own stock. GM, which had already announced a costly dividend plan and was considering additional steps to reward shareholders, agreed to a $5 billion buyback, saving Ms. Barra from further spats over board seats.

GM shares closed at $34.99 on Monday, about $2 higher than its IPO price in 2010.

Mr. Marchionne sees the success of Mr. Wilson’s team of hedge funds, which included Taconic Capital Advisors LLC, Appaloosa Management LP, HG Vora Capital Management and Hayman Capital Management LP, as reason to consider a more aggressive approach toward GM.

Mr. Marchionne thinks GM’s liquidity would be better spent on boosting scale rather than buying back shares, one person said. Ms. Barra’s willingness to work with activists suggests another investor could lure GM again to the negotiating table, a person familiar with the situation said.

In a note to investors on Monday, Morgan Stanley auto analyst Adam Jonas said “mergers are fraught with execution risk and there are many examples of failure in this industry.” He has noted, however, that unlike Ford Motor Co. and other major auto makers, GM doesn’t have defense mechanisms that would allow it to prevent investors from using a stake to promote short-term interests.

Mr. Jonas said in April that GM could allay activist investors by addressing which product lines it is investing in, which geographic regions it is pursuing, which technological initiatives it is betting on, the pace of rebuilding an in-house captive finance capability, and what level of capital is committed to strategic tie-ups.

“We are not suggesting that activism cannot offer much needed strategic focus or guidance. It can,” Mr. Jonas said at the time.

Mr. Marchionne has confirmed he reached out to other executives in recent months. Last week, he said those advances weren’t necessarily to propose the same thing he had proposed to Ms. Barra. In pursuing GM, which is the largest U.S. auto maker and No. 3 in global auto sales, Mr. Marchionne is taking aim at a company that has flirted with partnerships in its recent history.

In 2006, Nissan Motor Co. and Renault SA CEO Carlos Ghosnteamed with billionaire investor Kirk Kerkorian to propose an expansion to the alliance to include GM. Mr. Kerkorian held a sizable stake in GM and pushed for extensive changes at the Detroit auto company at the time; executives responded by spending several weeks investigating a tie-up with Nissan-Renault, but found it wasn’t worth the risk.

In 2008, as GM and then private-equity-owned Chrysler Corp. were headed toward bankruptcy, executives at both companies pursued an alliance to survive, but later abandoned it. GM’s current CEO is convinced that large-scale mergers rarely work, and the Detroit auto maker has sufficient global scale to thrive.

Ms. Barra will further lay out her case on Tuesday at GM’s annual shareholder meeting. Her aim is to land GM in the top quartile of auto companies return on invested capital, and build it into the world’s most valued auto company.

Mr. Marchionne has said that in the coming years he sees the car industry consolidating around three companies each producing about 15 million cars a year. Volkswagen AG, Toyota Motor Corp.and GM are the industry’s largest manufacturers and produce about 10 million cars a year each. Fiat Chrysler was a distant seventh last year with 4.7 million vehicles made.

Write to Eric Sylvers at eric.sylvers@wsj.com and John D. Stoll atjohn.stoll@wsj.com

Wow, just keeps getting better.

 

[dennisimperial]

Fiat are just trying to UNLOAD/sell us out. Here we go again. Ram and Jeep are the only viable brands. Jesus Christ....

 

[aldo90731]

"His high-profile calls for industry consolidation have led some analysts to characterize Mr. Marchionne’s pitch as a desperate one, reflecting Fiat Chrysler’s weak operating margins. Although the company is now profitable, a potential industry downturn and the future costs of meeting emissions regulations and investing in new technology leave sizable risks."

I just hope the other European automaker is not PSA...