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Winterkorn leaving door open for Marchionne?

by Bill Cawthon on

Sergio Marchionne survived the recall uproar, and Mary Barra survived the ignition switch debacle, but Volkswagen-Audi’s Martin Winterkorn wasn’t so lucky. That may open a door for Marchionne to make a merger pitch.

FCA-VW-Merger-Web

Just days after the Volkswagen diesel debacle burst onto the scene, Winterkorn resigned as VW’s CEO. In a statement, he said:

As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrong doing on my part.

Volkswagen needs a fresh start – also in terms of personnel. I am clearing the way for this fresh start with my resignation.

I have always been driven by my desire to serve this company, especially our customers and employees. Volkswagen has been, is and will always be my life.

Winterkorn is most likely just the first to be thrown under the bus. Volkswagen has already lost more than a third of its market capitalization since Friday.

In all the uproar and disruption, Sergio Marchionne might see a golden opportunity: Volkswagen has everything he wants. It’s in every market Fiat Chrysler would like to enter; it complements FCA’s product line and it had net cash reserves of almost $24 billion as of the end of June. The scandal is likely to cost Volkswagen several billion dollars in fines, penalties, lawsuits (the first U.S. suit has already been filed), and lost sales. But it has the cash and it will recover.

In return, FCA can give Volkswagen some things it wants: the North American market, the Ram pickup, Jeep, and Alfa Romeo. Moreover, the current situation appeals to Marchionne’s strengths as a master of the turnaround and a wizard at dealmaking.

This is only one possible scenario but it might give Mary Barra a welcome break from Marchionne’s overtures.

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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