[The Rationalist]

Originally Posted by GTO

A storm is brewing.

Source & Full Bloomberg Article

Interesting article, as you had posted earlier, things don't look rosy beneath the surface. Whatever happens ,as usual the manager is going to get his pound of flesh.

[devarshi84]

Fiat, Ferrari, Maserati, Lancia, AlfaRomeo,
Abarth
VM Motori
Magneti Marelli
Chrysler, Dodge, Ram, Jeep
Mopar
Viper.

Add to these the number of platforms under these brands. Some major copanies do not sell so many car name plates as the brands under this group.

Sergio Marchionne need not look outside for consolidation but within.

[volkman10]

Originally Posted by GTO

If any kind of partnership is reached, I think it will be with a cash-rich company from unexpected quarters (e.g. China?),

If Fiat's CEO Sergio Marchionne's plan A ( merger with GM) nor B ( with any Asian or VW or PSA) doesn't work, since no one as of now has show any interest. Will he be looking towards China , in particular world’s 10th largest car company, SAIC Motor in China.

SAIC Motor cannot grow into a true global competitor to VW, Toyota Motor Corp. (NYSE: TM) or GM without annual units sales in the United States and Europe that run into the millions. Fiat Chrysler already has those sales, and the brands, manufacturing facilities, distribution networks and R&D. Fiat is a dominant brand in Europe, just as Chrysler and its Jeep division are in the United States. Given how long it takes, and how virtually impossible it is, to create a huge global car company, a buyout of Fiat Chrysler is the only realistic opportunity SAIC Motor has to build one overnight. One advantage SAIC has as it expands is that it has one controlling shareholder — the Chinese government. It does not have to battle with large groups of outside owners if it wants to make a large strategic decision, which is what a buyout of Fiat Chrysler would be.

SAIC Motor had revenue of $99 billion last year. That is very close to the total sales figures for BMW and Nissan. SAIC Motor already has strong partnerships with manufacturers outside China, particularly through joint ventures with GM and Volkswagen, which are critical to the success of the U.S. and European based companies.

Fiat Chrysler Buyer May Be in China ?

http://247wallst.com/autos/2015/06/1...y-be-in-china/

[volkman10]

Situation is taking an ugly turn.

GM and FCA line up financial advisers in merger standoff.

General Motors and Fiat Chrysler Automobiles have turned to investment banks for help to deal with a stand-off as FCA seeks to force a merger.

GM is being advised by Goldman Sachs, while FCA is working with UBS on the matter.

GM's board rebuffed a merger proposal from the Italian-American carmaker earlier this year and CEO Mary Barra said last week she had no interest in a combination

But Barra's rejection has not stopped FCA boss Sergio Marchionne working on a merger plan, according to the sources. He is lobbying GM investors in an effort to drag the GM board to the negotiating table

B

ased on expectations that shareholders would demand a 35 percent premium to GM's market capitalization, FCA would need to pay about $77 billion in an all-stock transaction in the event of a hostile bid

But FCA would be under enormous financial strain if it decided to pursue a hostile bid

http://www.autonews.com/article/2015...ff-report-says

[desdemona]

I guess Marchionne knows and is broadcasting that there is very epic trouble coming for the car industry as a whole (well, at least the mass manufacturers): their costs are soaring for regulatory and other reasons, there remains huge overcapacity, margins are tight (even the mighty VW brand has margins of below 2%), the American market's near-saturated, the Eurozone market is and will remain in slowdown mode, LatAm is in recession, China is slowing with several Chinese automakers now gaining marketshare against the MNC-s.

Because of the merger with Chrysler and also the huge investment commitments to new models, new plants, expensive new labour contracts in the US, as also the big commitment to the Alfa Romeo brand (6-8 all-news cars and cuv-s by 2018), and to the Jeep globalization effort etc, FCA has a big debt-pile, has low albeit growing margins (better than VW though: somewhere near 3.xx%), sees LatAm tanking.....and is yet to, though it is quite profitable here, make a meaningfully big breakthrough in India-China-ASEAN region.

That then explains the extreme- and extremely-frank prudence Marchionne's advocating by way of 'consolidation', something he's been doing for a decade now, well before Fiat merged/acquired Chrysler/Jeep etc.

Also, he's one of the very very few hugely-successful merger and acquisitions CEO-s the car industry has ever see. Perhaps that is why he feels his advocacy will be more persuasive.

One's sense though is that the GM or VW type merger/consolidation is out of the question, and is more rhetorical on his part rather than real.

Bets should be on: 'strategic' tie-ups (short of merger) with one or more of Suzuki, Tata Motors (including JLR), Mitsubishi, and Peugeot-Citroen, supplemented with specific joint projects with other big firms like GM/Opel in Europe and LatAm?

If another financial crisis hits, ALL BETS ARE OFF, but that is as true of say VW and GM and even Ford, even Renault-Nissan as it is true of FCA, which, at least, unlike these firms has huge sales growth prospects even in a slow economy, since its brands are so potent, and are/have been only waiting for product and for market-launch (Jeep, Alfa, Maserati, Ferrari, the 500 series of Fiats, and in the US Dodge and Ram too).

FCA has been picking up marketshare hugely (all brands) in the US (62 consecutive months of sales growth), and also in Europe (Fiat + Jeep) since the rebound-from-recession began 6-8 months ago there. BUT: LatAm is tanking and Asia-Pac is still a small profit centre.

FCA under Marchionne sure is the most intriguing and mercurial firm there is right now. Bears a lot of scrutiny and speculation and gossip but keeps delivering, going from dead (bankrupt) to searing sales growth and brand expansion products-wise and geographically.....

PS: as you can tell, am a huge fan or rather believer in Marchionne. The man's a baap of a businessman/public figure/intellectual etc. Quite the Rennaissance Man!

[volkman10]

Marchionne has no plans for another GM offer, but said he was not giving up on his campaign to reduce the number of players in the industry.

The pitch is that there is a better to way to run this business," he said. "I'll wait, and we'll get it done."

http://europe.autonews.com/article/2...mail-ane-daily

[desdemona]

Tata Motors (including JLR) and/or Suzuki and/or Peugeot-Citroen are the, imo, real candidates for a strategic tie-up globally, if not a full-blown merger. Have been for a while now, pretty obviously.

The GM stuff was always outrageously rhetorical, designed just to broach the subject publicly....and to highlight the excellence of the FCA management aka Marchionne himself, at international mergers and turn-arounds. Also, it is said, to spook the UAW/workers into a softer-line at the very expensive and dangerous labour contract re-negotiations underway right now with FCA, Ford and GM too, with the UAW playing aggressive so far? Would you believe labour rates of 55$ per hour, net, on average!! 100's of times more than what an Indian or even Brazilian, Turkish, Mexican or Polish FCA factory-worker makes!

Meanwhile, FCA's US sales are soaring, margins there are rising pretty fast from their low-low level, European marketshare gains happening too in a rebounding Euro car market what with Jeep+new 500+500X+utility vans and trucks, and export revenues from Europe out even to the US (Renagade, 500X, Maserati, new Alfa-s)...., and with the cash from the 10% sale of Ferrari (to retire old high-cost debt), and the strong dollar too : FCA's balance sheet is set fair to show further, impressive improvement, net-net by financial year-end. FCA's final accounts are Euro-denominated.

But Marchionne's a proper intellectual-visionary of a businessman: he knows there's high-cost trouble coming soon for everyone, again, the first installment of which are the dipping sales of expensive-brand cars in China, the world's biggest market by far. And FCA though profitable there to the tune of a few tens of millions of dollars, is a tiny player in that market.

[volkman10]

General Motors has flatly rejected the advances of its rival, Fiat Chrysler Automobiles, but FCA CEO Sergio Marchionne is not going away.

Marchionne says he has sweated the details and done the math and discovered there's far too much upside in a merger of FCA and GM to let a deal go undone, or at least unexplored

Marchionne said the numbers come out so good that his board of directors has no choice but to put pressure on GM to begin discussions now

That sounds like a hostile takeover bid is in the works.

Not hostile, said the FCA chief.There are varying degrees of hugs. I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you. Everything starts with physical contact. Then it can degrade, but it starts with physical contact

You may reject the deal but you can't reject the discussion. If you're refusing to talk to me, and you have seen nothing, you either think you're above it all, or you think the capital markets are full of schmucks that owe you something

http://europe.autonews.com/article/2...autonews-blast

[volkman10]

Fiat Chrysler to focus on growth plan as GM merger hopes fades.

This is not an indiscriminate dating game. I'm not willing to go with anybody to get it done,
We have been publicly rebuffed, we have been rejected and you cannot force these things. I don't want to," he said. "At the moment, we have no intention to do anything hostile."

Marchionne said FCA would first focus on its $52 billion, five-year investment plan centered turning Alfa Romeo, Jeep and Maserati into global brands.

While confirming the overall targets of the plan to 2018, Marchionne said the company would present an updated product plan in January to accommodate for changes in the market, such as slowing growth in China.

These could include some Alfa Romeo and Maserati product launches being delayed and the target for its popular Jeep SUV being raised.

http://www.autonews.com/article/2015...ger-hopes-fade

[volkman10]

Fiat Chrysler still on hunt for merger partner- targets Toyota, VW or Ford!

FCA’s advances have already been shunned by General Motors and CEO Sergio Marchionne has identified the remaining giants of global manufacturing - Toyota Motor Cop, Volkswagen Group or Ford Motor Company - as ideal suitors.

Rules out Hyundai saying -

ruled out a tie-up with Hyundai or Kia, admitting ‘the Koreans don’t get married,’ despite them having the scale to make interesting economies of scale.

Marchionne, 63, is making finding a partner his most important goal before his contract expires in 2018.


http://www.carmagazine.co.uk/car-new...erger-partner/

[volkman10]

Guangzhou Automobile Group Co., Ltd. (or GAC for short) is interested in buying a majority stake in Fiat Chrysler Automobiles (FCA).

Is GAC the best fit for FCA?

the head honcho of Fiat Chrysler Automobiles is in search for a merger candidate. After Ford, General Motors, Toyota, and Volkswagen said no, it’s only natural to presume that GAC could become that merger candidate in the near future

the Guangzhou Automobile Group has lots of money at its disposal, money that could be spent on a piece of the Fiat Chrysler Automobiles pie. It’s rather clear, then, that the circumstances point to a merger or at least an opportunity for Guangzhou Automobile Group to expand outside of China.

More details will be known when GAC will exhibit at the 2017 Detroit Auto Show.


http://www.autoevolution.com/news/ga...es-107609.html

[studentonwheels]

If Chrysler were to merge with Toyota. Man that would be something to watch for. Perhaps Chrysler would finally build reliable vehicles and have the knowhow to service them.

Just curious. What would happen to current chrysler models if there were to be a takeover?
The 200 is a pretty kickass car. Pity Chrysler engineers failed to solve issues with the ZF transmissions.

[Sommos]

Guangzhou Automobile Group of China has a joint venture with FCA to produce cars for its domestic market. Last month the venture began making Jeep Renegades. Capacity of the plant is 160,000 vehicles a year. Last month FCA CEO Sergio Marchionne said Guangzhou was a respected and valuable partner. There was no mention then that the partnership might lead to anything more.

Based on an unsourced report in the Il Giornale newspaper that Guangzhou Automobile Group of China is about to launch a bid for Fiat Chrysler Automobiles (FCA), boosted FCA’s shares briefly in the Milan stock exchange by about 3%, until second thoughts by investors drove them down close to even for the day.

Later, Reuters reported that a spokeswoman for Guangzhou Automobile said there were “currently no plans for this” and FCA declined to make any comment.

This would all be a far cry from FCA’s efforts to induce a merger with General Motors, which appeared to crash and burn last year. But despite Marchionne’s obsession ...
...
...

Continue reading - Forbes

[volkman10]

Fiat Chrysler shares jump, then dip as Guangzhou Auto denies stake interest!

in addition to having partnership with FIAT,Guangzhou Auto, China's sixth-largest automaker by sales volume last year, also has joint ventures with Toyota, Honda and Mitsubishi Motors.

http://europe.autonews.com/article/2...maildailyANE01

[CrAzY dRiVeR]

Originally Posted by volkman10

Fiat Chrysler shares jump, then dip as Guangzhou Auto denies stake interest!

A decade back, who would have thought that the shareholders of an Italian brand would be pinning all their hopes on the partial acquisition of the brand by a Chinese automobile giant!

FIAT probably swallowed more than it can digest, when it acquired the ailing Chrysler to try and turn it around. But more than that, their long product refresh cycles in the international market has been the biggest weakness of the brand since long.