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The thing is, regardless of fuel prices or policies, quality, efficiency, and value will ALWAYS sell. FCA’s willingness to bet all of Dodge’s fortunes on what amount to automotive curiosities is what is subjecting it to the winds of fortune.

One problem is that at the volume that these cars will sell, I expect the only way they can make a profit is to keep them on these increasingly aged platforms. Once all profit can be wrung out of them, I would expect the brand to get flushed.
 

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Chrysler has been well on its way to the grave for a number of years. The fact that it’s taken this long for Chrysler to die speaks about the residual equity the brand still had left and which FCA failed to appreciate.

Dodge is now clearly on the same path. This big “American Muscle” powwow Dodge launched this week signals the final salvo before Dodge follows Chrysler to the cemetery. FCA has shown this pattern many times: when sales falter, it will give the brand/model one good push before pulling away all support completely. Without any mainstream models in its lineup, no new models in the pipeline, and 42% decline in sales, Dodge is pretty much dead as far as FCA is concerned.

A slow, gradual death suits FCA just fine. This way it can justify to dealers, customers and the media that the reason the brand is dead is due to “low demand”, not due to mismanagement or negligence.

I hope Mopar fans learn to living in a world without Plymouth, Dodge or Chrysler. All we will have left are Jeeps, Rams, Alfa Romeos, perhaps Fiats, and lots of memories.
If FCA was to continue as a single entity...I have no doubt whatever that Dodge and Chrysler...(OOPS!...Almost forgot Lancia) would continue to lay on their sick-beds on respirators until such time as they thought they could get away with pulling the plug without too much toxic fallout.

However, when the new combined entity is created, that (Please Dear God)...Carlos Tavares will have a much sharper understanding of the concept of brand name / model(s) residual goodwill and value, and maybe save them from the grave.

On a slightly unrelated point...I wouldn't put it past the new combined entity to try to reintroduce OPEL to North America as way to fill in the gaps in the corporate lineup that Ram and Jeep are not really able to.


Just my € 0.02
 

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The thing is, regardless of fuel prices or policies, quality, efficiency, and value will ALWAYS sell. FCA’s willingness to bet all of Dodge’s fortunes on what amount to automotive curiosities is what is subjecting it to the winds of fortune.

One problem is that at the volume that these cars will sell, I expect the only way they can make a profit is to keep them on these increasingly aged platforms. Once all profit can be wrung out of them, I would expect the brand to get flushed.
Marchionne always showed a preference for high-margin products, even if they sold in lower volumes. Of course this philosophy flew out the window whenever the moment came to report sales; at which point everything was allowed, even fudging the numbers.

FCA keeps pushing Dodge into this quasi-luxury price and volume space, but without the level of innovation, sophistication or customer service normally expected in luxury.
 

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If FCA was to continue as a single entity...I have no doubt whatever that Dodge and Chrysler would continue to lay on their sick-beds on respirators until such time as they thought they could get away with pulling the plug without too much toxic fallout.

However, when the new combined entity is created, that (Please Dear God)...Carlos Tavares will have a much sharper understanding of the concept of brand name / model(s) residual goodwill and value, and maybe save them from the grave.

On a slightly unrelated point...I wouldn't put it past the new combined entity to try to reintroduce OPEL to North America as way to fill in the gaps in the corporate lineup that Ram and Jeep are not really able to.


Just my € 0.02
I don’t see Tavares bringing Opel to N.A. any more than I see him bringing Chrysler to Europe.

He will have his hands full fixing the mess that Fiat has become in the US and Canada, the pathetic state of Chrysler, the dead-end Dodge is headed towards, prop up Alfa Romeo, fix the dealership experience and move FCA off the bottom of the quality charts. All the while making sure Jeep and Ram keep getting TLC to continue generating big fat profits.

Did he inherit Vauxhall along with Opel?
 

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aldo90731 said
He will have his hands full fixing the mess that Fiat has become in the US and Canada, the pathetic state of Chrysler, the dead-end Dodge is headed towards, prop up Alfa Romeo, fix the dealership experience and move FCA off the bottom of the quality charts. All the while making sure Jeep and Ram keep getting TLC to continue generating big fat profits.


Aldo:

In your capacity as a keen observer / analyst of the Automotive scene...Do you think there is a possibility that Mike Manley may choose to leave the new combined entity?
 

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aldo90731 said
He will have his hands full fixing the mess that Fiat has become in the US and Canada, the pathetic state of Chrysler, the dead-end Dodge is headed towards, prop up Alfa Romeo, fix the dealership experience and move FCA off the bottom of the quality charts. All the while making sure Jeep and Ram keep getting TLC to continue generating big fat profits.


Aldo:

In your capacity as a keen observer / analyst of the Automotive scene...Do you think there is a possibility that Mike Manley may choose to leave the new combined entity?
It would require a level of knowledge of Manley as a person I don't have to answer that question.

From the little I have seen, I don't see Mike Manley's ego be such as to refuse to work with Tavares; nor anything to indicate that Tavares would not want to have Manley as his deputy.
 

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From the little I have seen, I don't see Mike Manley's ego be such as to refuse to work with Tavares; nor anything to indicate that Tavares would not want to have Manley as his deputy.
I find that encouarging and reassuring to hear.

There's no doubt in my mind that the pair are stronger together than the sum of their respective parts.
 

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If this merger goes thru they better be smart enough not to bring ANY of the PSA vehicles here under PSA brand names. We don't need any more useless brands here than we already have
 

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The problem is these mergers take valuable time to for the combined companies to integrate. In the auto business, time isn't a luxury. Tavares has a much different and harder job IMHO dealing with this then buying Opel. They had some decent product at Opel to buy time. Here, except for Jeep and Ram they do not. They have two starving brands that needed new product years ago. So he has no cushion here. Can the brands exist on what little they have until when or even if new product is awarded?
 

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The problem is these mergers take valuable time to for the combined companies to integrate. In the auto business, time isn't a luxury. Tavares has a much different and harder job IMHO dealing with this then buying Opel. They had some decent product at Opel to buy time. Here, except for Jeep and Ram they do not. They have two starving brands that needed new product years ago. So he has no cushion here. Can the brands exist on what little they have until when or even if new product is awarded?
It’s not as if they can keep the Opel products on the same platforms they were on - those were/are GM platforms. Many of the Opel models, like the Mokka, were pretty outdated and PSA has had to step in and move them to PSA platforms and technologies.

FCA has their own line of platforms and engines that won’t all need to be converted to PSA powertrains and designs. There are current FCA platforms that can accommodate new generations of the Charger, Challenger, Durango, and future Dodge and Chrysler crossovers and work has undoubtedly been going for quite some time on those projects, while PSA is having to redesign all Opel vehicles on PSA platforms to meet emissions standards.

With FCA, they are actually getting powertrains, platforms, and technology out of the deal. This is a true merger while Opel was an acquisition.
 
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The problem is these mergers take valuable time to for the combined companies to integrate. In the auto business, time isn't a luxury. Tavares has a much different and harder job IMHO dealing with this then buying Opel. They had some decent product at Opel to buy time. Here, except for Jeep and Ram they do not. They have two starving brands that needed new product years ago. So he has no cushion here. Can the brands exist on what little they have until when or even if new product is awarded?
I think that you had completely misunderstood this merger.

First of all. FCA has their own IP unlike Opel where all IP belong to GM or to some other company if there was a JV in place. So for every car on GM mechanics PSA needs to pay royalties which in the end speed up move from GM to PSA platforms. This will not be needed for FCA.

Second. It will take time to move over to joint powertrains and platforms which means that NewCo can use FCA platforms for the new product if they want. FCA platforms are perfectly fine, both Small Wide and Giorgio.

Third. This is the most important.
The merger is in place because of the European side of the business. With impeding fleet CO2 regulations they will slash electrification costs with combining 2 companies. In the process they will try to add more products to the FCA side of the business. I repeat European business. FCA is already in the process to add more products but they will speed up after the merger.

Fourth. According to Carlos Tavares fruits of the merger will be seen in 2030's and 2040's.
 

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I'm talking strictly about NA. Since this market is the main source of profits, how soon would the merger be able to bolster it? Without the profits from here FCA would be in dire straits far worse then it is now.
 

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I'm talking strictly about NA. Since this market is the main source of profits, how soon would the merger be able to bolster it? Without the profits from here FCA would be in dire straits far worse then it is now.
Exor wouldn't do Ferrari IPO in that case. For years it was the only profitable part of FCA.

During the mid 2010's FCA US had a lot of years when recalls had eaten all profits.
Ferrari was the only one bright spot.

AFAIK FCA US is reinvesting and had reinvested their money to produce even more high ATP and high margins cars. Like Ram or Jeeps. I think it will be close to 10 billion in few years.

Maybe the NewCo will start to build products which will brought down profit margin. I don't know. It's up to them. But surely PSA platforms are not needed to do so.

I think that Brampton is part of the FCA plans but it's very likely that they are waiting push from Ontario and Canada Governments. Or Canada may lose FCA production.
 

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they better be smart enough not to bring ANY of the PSA vehicles here under PSA brand names.
In regard to Citroen, Peugeot, DS, and Vauxhall, I fully agree.

However...I think a case could be made for OPEL. As far as I know, OPEL doesn't share the same sort of pre-conceived "perception/reputation" beliefs/thoughts as the others. As an older person, I still remember OPEL as the captive import companion brand to Buick. As far as I remember...although OPEL was not thought of as Mercedes level and it's ilk...but I don't remember anyone considering them "poopies" either.

Maybe there are some of you guys old enough to remember (besides The Lovely Barbara Feldon) that an OPEL GT was used in the opening of the spy genre satire comedy "Get Smart"

Ahhhhhh......The Lovely Barbara Feldon:):):)
View: https://www.youtube.com/watch?v=LKl_7u1ydlQ

 

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FCA is going to have to wait a long time. From what I’m seeing, Canada appears to be moving away from automaking in the latest USMCA agreement.

Right after the agreement got renegotiated and ratified, GM announced closure of its plant in Oshawa, Ontario, something it had wanted to do for 30 years but the US-Canada Auto Pact restricted them from doing. Shortly after, FCA eliminated 1500 jobs at Windsor. My hunch is FCA is currently reviewing the new agreement, and looking at the plants it has throughout North America before deciding what to do. Iacocca opened the Brampton, Ontario, plant where the L-Cars are now made, which AMC-Renault had originally built for what ended up becoming the Dodge Monaco/Eagle Premier.

I don’t agree with Canada moving away from auto making. But presumably Canada was willing to give up on autos in order to get something else in return. What that is I have no idea. Hopefully something with better prospects for the next 100 years.
 
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The Auto Pact hasn’t been in place since 2001.
Perhaps not in name, but ingrained into the spirit of the original NAFTA agreement.

According to Wiki: “The Auto Pact was abolished in 2001 after a WTO ruling declared it illegal, though by that time the North American Free Trade Agreement had effectively superseded it.”

There’s no fundamental economic justification for the Big 3 to want to maintain production in Canada unless it is through reciprocal agreements.
 

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I'm talking strictly about NA. Since this market is the main source of profits, how soon would the merger be able to bolster it? Without the profits from here FCA would be in dire straits far worse then it is now.
The purpose of the merger is not to bolster the main source of profits. Since, as you mentioned, it already is the main source of profits.
It's to face the regulatory challenges in other regions and bolster the profits of other regions - mainly Europe - to decrease dependence of the NAFTA region. I know that there's a strong nativist current in this forum so this might be hard to understand but the US is not, and hasn't been, the majority of the global market for a few decades already. It's important to profit from other geographical markets, and FCA is a global corporation, NOT an american corporation. If people have trouble accepting this after all these years, then I don't know what to say.

Will the US side of FCA benefit from this merger? That depends on many variables: the results from the November elections leading to tighter emissions standards in the entire country, a shift in consumer behavior to purchasing smaller cars instead of midsize and full-size SUVs, a necessity to electrify the range. If FCA needs to achieve this in NAFTA, you will see the benefits of this merger in the US. If it doesn't, then you won't see those benefits.
 
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