DETROIT — The last two times Chrysler was sold — to Daimler-Benz in 1998 and to Cerberus Capital Management in 2007 — its new owners promised nothing less than a remarkable renaissance for the smallest of Detroit’s Big Three.
“We’re not doing this because we’re good Samaritans,” Sergio Marchionne, Fiat’s chief, said of the alliance with Chrysler.
But Marchionne, the chief executive of the Fiat Group, the Italian carmaker, has no such grand visions for his company’s prospective alliance with Chrysler. His company’s plan to take a 35 percent stake in Chrysler is accompanied by a blunt assessment of its prospects.
“I think Chrysler has all the prerequisites to survive,” Mr. Marchionne said Monday in an interview. “But the bigger issue is, What does it look like two or three years from now? It’s not as if Fiat is going to show up and Cinderella is going to be magically turned into something else.”
Chrysler has been struggling to avoid bankruptcy since last year, when it joined General Motors and Ford in asking for federal aid to make it through the worst downturn in the United States auto industry in more than 25 years.
Chrysler has received $4 billion in government loans, and is counting on getting an additional $3 billion by April to stay in business.
For Chrysler, its deal with Fiat — announced last month — is the linchpin of its turnaround effort.
In exchange for a 35 percent stake, Fiat will let Chrysler build small cars using a number of its “platforms” — the automobile industry term for the mechanical underpinnings of a vehicle, including engines — so that Chrysler can broaden its lineup beyond large pickups, S.U.V.’s and minivans. This current mix is one reason Chrysler’s sales have fallen so quickly over the last year.
The deal will also allow Fiat to re-enter the American market, from which it withdrew in 1984, and to eventually build Fiat and Chrysler models together on assembly lines in the United States and Europe.
The talks between Chrysler and Fiat started last summer when it completed a deal to buy a Chrysler engine plant in Brazil.
Mr. Marchionne, Fiat’s chief executive since 2004, said he had no designs to become involved with Chrysler on a large scale.
But after initial discussions with Thomas W. LaSorda, a Chrysler vice chairman, Mr. Marchionne said he started seeing a Chrysler-Fiat alliance as a logical combination for both parties.
“We’re not doing this because we’re good Samaritans,” Mr. Marchionne said. “We’re willing to take a risk on investing technology and time to help Chrysler come back to life and bring value to Fiat shareholders.”
After meeting in recent days with Chrysler executives at company headquarters in suburban Detroit, Mr. Marchionne offered a utilitarian appraisal of how the two automakers could help each other.
“We have to get back to being metal bashers,” he said. “We need to go back to some simple rules of making and selling cars.”
Mr. Marchionne, 56, has taken just such a basic approach to remaking Fiat from a bloated conglomerate into a leaner, more focused competitor in the European auto market.
Previously head of the Swiss industrial testing company SGS Group, he was recruited by members of Fiat’s founding Agnelli family to shake up the auto company. Mr. Marchionne promptly unwound an unsuccessful alliance with G.M., and divested the company of airline, insurance and banking divisions that he said had distracted Fiat from the car business.
An outsider in the clubby Italian business establishment, Mr. Marchionne is plain-spoken and informal. Instead of suits, he favors open-collared shirts and cashmere sweaters. He unapologetically conducts interviews while working his way through a pack of Marlboro cigarettes.
He sees Chrysler’s problems — too much capacity, no access to capital, a need for more fuel-efficient vehicles — as symptoms of an industrywide illness.
“We all have to do the restructuring that is needed, no matter how painful,” he said. “We have to be willing to restructure to make sure that we can sell what we build.”
With the right products, he said Chrysler could make money on its 11 percent share of the United States market, even if industry sales remained depressed.
Analysts say they think that Fiat’s small-car expertise could at least give Chrysler the opportunity to make a transition from its dependence on larger vehicles.
“Fiat’s inclusion into the future equation allows Chrysler a technology and economies-of-scale lifeline,” said Michael Robinet, head of global vehicle forecasts for CSM Worldwide. “But other daunting challenges remain.”
Fiat itself is profitable, but the company has made no commitment to put cash into Chrysler. Instead, Fiat will offer vehicle platforms that Chrysler can modify with its own designs and interiors to appeal to fuel-conscious American consumers.
Industry observers who were ready to write Chrysler off as a lost cause see Mr. Marchionne’s back-to-basics approach as its only hope.
“He appears to have done a remarkable job in getting Fiat’s quality and sales back up,” said Jerome York, a former Chrysler executive who has advised the billionaire Kirk Kerkorian on his investments in the auto industry.
But it will take at least two years before Fiat cars can be remade into Chrysler models. Mr. Marchionne sidestepped questions on whether an additional $3 billion in government loans would be enough to keep the company solvent until then.
He said that it was “up to Chrysler” to negotiate lower labor costs with the United Automobile Workers and to shrink its debt to qualify for more loans.
And Mr. Marchionne is unfazed by some in Congress who question whether American taxpayers should lend more money to Chrysler if it benefits a foreign automaker.
He said that Fiat could eventually get a majority ownership stake in Chrysler if certain goals were achieved.
“We are not asking for anything from Chrysler,” Mr. Marchionne said. “We’re not going to take any of its money. We’re offering platforms, engines and a distribution network outside of North America, in exchange for an equity position. Really, the risk is all on us.”
Interesting article that points out a few things as far as the overall plans. I like what I'm seeing, I just hope that the 'restructuring' doesn't kill off all the SRT models. I could see trimming a couple of the SRT-8s (ouch, still sucks), but it would be painful to see the entire SRT name fall by the wayside.
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Quote: Originally Posted by al2683
One of the most realistic parts of this video is that it shows two guys riding together in the Subaru, they are in love, I think it is a touching and realistic portrayal of Subaru owners and I applaud them for it.
NO. we like the neons because we know the neons. unfortunately for dodge thanks to the head gasket issue the neon will always be perceived as unreliable car the public in general. the goal is to get new customers and retain current ones and the neon name will just not do it.
NO. Intelligent people like the neons because we're not stupid. unfortunately for dodge thanks to the head gasket issue the neon will always be perceived as unreliable car because the general population is stupid. the goal is to get more stupid people to buy stupid products that are loaded down with more and more safety gear so that they don't kill themselves or others because they're doing their nails or messaging while they drive. Why bother fixing the root problem of lax licensing and lax disclipline on our roads (multiple DUIs? Here, have your license back. Sorry we inconvienienced you) when we can just crank out heavier vehicles with more and more airbags every year.
There. Fixed it for you.
Chrysler needs small cars on the lots, now. Selling vehicles at a loss (Employee Pricing Plus Plus) only lasts so long, and does so much.
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"This car is 100% sh*ts and giggles."A car can be a tool but it can also be so much more. It can be a heart-starter, it can be a drug, it can be a piece of art and it can stir your soul.
"Speed has never killed anyone. Suddenly becoming stationary... that's what gets you." Jeremy Clarkson
Saleen's new owners in the running for Viper acquisition? by Noah Joseph on Feb 8th, 2009 at 6:02PM
Saleen's future has been in upheaval the last few years. First, company founder Steve Saleen left, then the company's assets were sold off to private investors. Its new owners plan to continue making superchargers and bolt-on parts, but Saleen's turnkey Racecraft and S lines could face the axe, while the company's former keepers retain ownership of its supercar manufacturing business while they figure out what they can do with it.
Meanwhile, Chrysler has been looking to sell of its Viper operation, but while Saleen could have been a contender in years past, in its current condition few expect it to make such a large acquisition. That may be a false assumption, however, as silence is speaking louder than words.
Understandably, Chrysler's management is not disclosing the identities of the three potential buyers with which it is discussing the future of the Viper enterprise, but Saleen's new owners are likewise refusing to comment. That kind of silence can be as deafening as a Saleen exhaust note, leaving us to wonder if the company's new owners could turn the broken shards of a once-great American company into a new powerhouse with the Viper packing the punch.
<---My contacts seem to be back on track
Last edited by AllForSRT : 02-08-2009 at 05:14 PM.
here is a little excerpt from some Saleen engineers :
''The Raptor is just a glimpse of things to come from Saleen,'' says Chief Technical Officer, Chris Theodore. ''Our company is unique in that we have the experience and knowledge behind some of the most exciting performance vehicles built over the past 20 years. Beyond the S7 Supercar, our team members have been involved in the Viper, Prowler, Ford GT, and the products of Chrysler SRT and Ford’s SVT performance groups. These ‘lessons learned’ are evident in the Raptor concept and we will continue to build upon them as the company evolves.''
Im going to go out on a limb here and say Saleen is slightly ahead of the bidders here. Roush doesnt have the experience or the interest in taking on the Viper Team, however time will tell
Last edited by AllForSRT : 02-08-2009 at 05:21 PM.
Neon is dead, RIP, and should NEVER EVER be brought back. No offense, I love my SRT Neon, and my 2000 Neon SE has been great, but the next SRT-4 needs to be something started fresh off a reliable platform from the 1st gen on, so that it does not get the bashing from yes, the stupid public and import idiots out there, but that being what is said, there is a majority, yes, as in, most people, seem to think the Neon is unreliable.
Therefore it doesn't matter whether or not it is true, because as the old adage goes, perception is reality, and that is their perception. So, that being said, bring on a new platform, with a new nametag.
Saleen's new owners in the running for Viper acquisition? by Noah Joseph on Feb 8th, 2009 at 6:02PM
Saleen's future has been in upheaval the last few years. First, company founder Steve Saleen left, then the company's assets were sold off to private investors. Its new owners plan to continue making superchargers and bolt-on parts, but Saleen's turnkey Racecraft and S lines could face the axe, while the company's former keepers retain ownership of its supercar manufacturing business while they figure out what they can do with it.
Meanwhile, Chrysler has been looking to sell of its Viper operation, but while Saleen could have been a contender in years past, in its current condition few expect it to make such a large acquisition. That may be a false assumption, however, as silence is speaking louder than words.
Understandably, Chrysler's management is not disclosing the identities of the three potential buyers with which it is discussing the future of the Viper enterprise, but Saleen's new owners are likewise refusing to comment. That kind of silence can be as deafening as a Saleen exhaust note, leaving us to wonder if the company's new owners could turn the broken shards of a once-great American company into a new powerhouse with the Viper packing the punch.
<---My contacts seem to be back on track
I just read that and came in here to see if you posted it.
*bows to you*
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Quote: Originally Posted by sphipps
Obviously you are not detecting the sarcasim in my posts.
Neon is dead, RIP, and should NEVER EVER be brought back. No offense, I love my SRT Neon, and my 2000 Neon SE has been great, but the next SRT-4 needs to be something started fresh off a reliable platform from the 1st gen on, so that it does not get the bashing from yes, the stupid public and import idiots out there, but that being what is said, there is a majority, yes, as in, most people, seem to think the Neon is unreliable.
Therefore it doesn't matter whether or not it is true, because as the old adage goes, perception is reality, and that is their perception. So, that being said, bring on a new platform, with a new nametag.
I was giving this some further thought; if the Caliber had been a traditional 4-door sedan (with maybe a hatch variant) as a successor to the Neon, it probably would have been called the "Neon" in jest or in a derogatory manner, just like many many people call the Cobalt another Cavalier.
Maybe the Caliber is a good thing; it provides a "reset" button so there is a break in the model line for the next small car to really "start fresh".
But I think this should be made clear; regardless of the platform, the 3rd generation SRT4 should live up to the performance standards the original set. With competition like the 2010 Mazdaspeed3 (which is utterly fantastic so far, IMO), they need something that can sit on the top of the pile again and happily piss off anyone below it.
Screw the toys. To hell with the bells and whistles. I want the money to go back under the hood where it belongs. Build a 2010 SRT4 in a good-looking sedan or hatchback, with good aggressive looks and let that be the new halo car. Let it be something that people can respect instead of a punchline. Let it be a car that others can only aspire to be, and settle with pulling rank in the "comfort and convienience" categories.
I want a car that's loud, aggressive, fast, and inexpensive (but not cheap; reference Nissan Altima commercial). Fix the rear windows in place for all I care. And I know SRT can do it. But, they can only be as good as what they're given with to start. So c'mon Chrysler; get your ducks in a row.
I want cars to be fun again. I'm tired of these little blips all over the last decades where there's an awesome car built here and there.
Bring on a 2010/11 3rd Gen SRT4. Bring on a mid-size, 4-door SRT6.
I was giving this some further thought; if the Caliber had been a traditional 4-door sedan (with maybe a hatch variant) as a successor to the Neon, it probably would have been called the "Neon" in jest or in a derogatory manner, just like many many people call the Cobalt another Cavalier.
Maybe the Caliber is a good thing; it provides a "reset" button so there is a break in the model line for the next small car to really "start fresh".
But I think this should be made clear; regardless of the platform, the 3rd generation SRT4 should live up to the performance standards the original set. With competition like the 2010 Mazdaspeed3 (which is utterly fantastic so far, IMO), they need something that can sit on the top of the pile again and happily piss off anyone below it.
Screw the toys. To hell with the bells and whistles. I want the money to go back under the hood where it belongs. Build a 2010 SRT4 in a good-looking sedan or hatchback, with good aggressive looks and let that be the new halo car. Let it be something that people can respect instead of a punchline. Let it be a car that others can only aspire to be, and settle with pulling rank in the "comfort and convienience" categories.
I want a car that's loud, aggressive, fast, and inexpensive (but not cheap; reference Nissan Altima commercial). Fix the rear windows in place for all I care. And I know SRT can do it. But, they can only be as good as what they're given with to start. So c'mon Chrysler; get your ducks in a row.
I want cars to be fun again. I'm tired of these little blips all over the last decades where there's an awesome car built here and there.
Bring on a 2010/11 3rd Gen SRT4. Bring on a mid-size, 4-door SRT6.
We've discussed this in other threads. Remember that this doesn't start with the sporty version of the cars in question. The first thing that has to be done is the economy version has to be created, and needs to be a decent looking car with a lot of the newer bells and whistles that are NOT that expensive to add to the car (decent sound system, MP3 compatible cd player and decent hard drive to hold music, etc, and other things) then you build on that platform and come up with the SRT-4 version.
The smaller (SRT-4 possibly) economy version of the car MUST get 35 mpg, that is an absolute must, because guarantee you gas prices will go up again to where they were last summer, and Dodge needs to be ready this time. The biggest thing to remember here is that WE, the performance minded Dodge customers, do NOT drive the company, the company is going to listen to what the 50 year old guy looking for his daughter's college car is going to want, what the 35 year old accountant needs in a frugal car, what recently divorced 50 something year old woman needs in a small car that gets good gas mileage. It is these people who buy 95% of the cars, we make up a small (yet ferocious haha) portion of the car industry: those who place performance above all other aspects of the car's traits/accessories.
We've discussed this in other threads. Remember that this doesn't start with the sporty version of the cars in question. The first thing that has to be done is the economy version has to be created, and needs to be a decent looking car with a lot of the newer bells and whistles that are NOT that expensive to add to the car (decent sound system, MP3 compatible cd player and decent hard drive to hold music, etc, and other things) then you build on that platform and come up with the SRT-4 version.
The smaller (SRT-4 possibly) economy version of the car MUST get 35 mpg, that is an absolute must, because guarantee you gas prices will go up again to where they were last summer, and Dodge needs to be ready this time. The biggest thing to remember here is that WE, the performance minded Dodge customers, do NOT drive the company, the company is going to listen to what the 50 year old guy looking for his daughter's college car is going to want, what the 35 year old accountant needs in a frugal car, what recently divorced 50 something year old woman needs in a small car that gets good gas mileage. It is these people who buy 95% of the cars, we make up a small (yet ferocious haha) portion of the car industry: those who place performance above all other aspects of the car's traits/accessories.
Oh I'm well aware of that. What I'm saying is that the platform must be strong to begin with. It must look good, be good, sell good. As much as we despised the SRT-Design, it sold cars. It sold cars because underneath all the BS layered on top, the Neon was a solid car, that didn't have "love it" or "hate it" design. While you can push your design in one direction, an economy car can be quirky, and it can be ugly, but not both.
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