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Yet more FCA sale rumors

by David Zatz on

Various sources have told us that there are groups of Asians in suits wandering the halls of Auburn Hills and some plants. Suppliers have been told to be ready to leave the headquarters building. What does it mean?

It’s easy enough to jump to conclusions — “they’re selling out to Volkswagen,” or “a Chinese company is buying Chrysler.” The reality is likely more prosaic.

First, FCA owns Comau, which makes factory equipment, including robotics. Some analysts have pointed out that Comau, not being directly essential for FCA’s mission, and also not being a key profit generator (though it is reliably profitable), could be sold off to slash FCA’s total debt. What’s more, plant tours are likely being held for Chinese (and other) car companies who are interested in buying Comau products. What better way to show off their capabilities?

Second, FCA also owns parts-maker Magnetic Marelli, which started off as a joint venture many, many years ago. There was a good deal of talk about selling the telematics division to Samsung, and those talks would explain sightings within the Auburn Hills.

As for the suppliers, the former Chrysler museum will be converted to office space soon, and it’s possible that, just as the company is moving cars and trucks between factories, it will be shuffling suppliers and employees during and after reconstruction of the museum building.

That’s not to say there’s no chance of any FCA car division being sold, but it seems unlikely. Chrysler has the least brand equity of the American group, so it would raise the least money, and it is part of FCA’s name; and would demolish morale in Auburn Hills. That’s not even to mention the reaction of politically powerful and litigious dealerships. Jeep is far too important to FCA’s global plans to toy with, and Ram seems to be key to the company as well. That just leaves Dodge, which in addition to attracting younger buyers is important to making the Alfa Romeo economics work out. Would a Dodge Challenger sell under the Chrysler name?

If FCA ever does sell part of its automotive business, it’s most likely going to be an all-or-nothing: either merging with another company entirely, or not merging/selling at all. Comau, Teksid, and Magneti Marelli are another story entirely.

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