• Jan 27, 2009
Everybody remembers the first two rules of Fight Club. But what about the rest of them? Like the fourth rule: "Only two guys to a fight," and the fifth rule: "One fight at a time, fellas." In mergers and acquisitions terms, only two parties to a merger, and one merger at a time. Well it looks like the fellas over at Fiat might want to watch the movie read the book over again, because they appear to have forgotten the rules.

Since parting ways with General Motors, Fiat has been looking for a new partner in which to form an alliance. Before the alliance with Chrysler surfaced, there were reported talks with French auto group PSA, parent company to both Peugeot and Citroen. It got to the point where even Italian and French government leaders were discussing how they could facilitate the deal. But once the Chrysler tie-up emerged, everyone assumed the PSA deal was dead in the water. Apparently not everybody, because even with the Chrysler deal inked, the latest reports suggest that certain elements within Fiat – namely the Agnelli family, its biggest shareholder – are still interested in merging with the French automaker. Fiat denies the possibility, while PSA had no comment. Even without taking Chrysler into account, the merger between PSA (Europe's second largest automaker) and Fiat (Europe's third largest) would put it in contention with Volkswagen for the largest in Europe and third largest in the world. Adding Chrysler's output to the equation could put the mega group within striking distance of Toyota and General Motors for the title of the world's largest automaker.

[Source: Detroit News]


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  • 17 Comments
      • 5 Years Ago
      This could get interesting... Chrysler dealerships could become multi-brand dealers carrying a few Chrysler/Dodge products, and a few European marques as well.
      • 5 Years Ago
      Wow. This mega-merger would be a crazy circle of business. Hope they can all play nice.

      PSA-FIAT
      FIAT-Chrysler
      Chrysler-Nissan
      Nissan-Renault

      ...wait!!!....I'm dizzy....
      • 5 Years Ago
      What are you saying???? We might actually get a choice of fun - economical cars????

      Ford Fiesta??? Yes
      Saturn Astra??? Yes
      Ford Focus 3???? Yes
      Fiat 500??? Yes
      Fiat Grant Punto???? Yes
      now
      Peugeot 207??? Wow...

      Call Dodge's Peugeot and Bring back Plymouth and call it Fiat..... Chrysler becomes Citroen You got yourself some winners...

      America's waking up to Chrysler/Plymouth (80's jingle)... Fiat, Alfa,....humm - Peugeot, Citroen, Lancia and Dodge.....

      Gone but not forgotten Toyota, Honda and Hyandai.... Found in the Classic adds for under $5000.00
      • 5 Years Ago
      Anyone remember that story a few weeks back when one of bigwigs of a car company (don't remember who and which) predicted 'in the end', there might only be 3 or 4 car companies on the planet? I just looked out my window, and I don't see any of the seven horseman riding into my neighborhood.
      • 5 Years Ago
      If this allows me to buy a Peugeot 308cc anytime soon, I'm all for it.

      • 5 Years Ago
      Well,

      Now this could a really good deal for all parties involved.

      Chrysler gets more platforms and they get access to manufacturing and American dealerships.

      Chrysler can sell more of its products abroad.

      Quality issues can be assessed and improved as well.

        • 5 Years Ago
        Andrew, I think the Mondeo is too American-styled for you, and too large for where you live. :-P
        • 5 Years Ago
        I doubt it. Chrysler is not a big player in Europe, and won't become one either. Fiat will supply small cars to Chrysler for the American market, and that's great for Chrysler. But Fiat has no need for American sedans or vans, they have their own designs.

        And why would Chrysler take the time and *money* to convert their designs to confirm with strict but different European requirements?

        And, frankly, American sized cars don't sell very well here. It's a small niche, they're expensive and rare but a few people really want them.

        If I'm going to replace my current Ford it will be with another European Ford. Mondeo, mmmm.
      • 5 Years Ago
      We need to get this straight, is this a merger or an alliance? They are two differnt things. Merging is hard and takes time. Alliances are easier and can be multifaceted.
        • 5 Years Ago
        The Fiat-PSA deal was supposed to go down as a merger, but it just went down instead.

        The Fiat-Chrysler deal is an alliance, because if it was a merger then Chrysler would not receive one penny in bailout loot from the Feds (in fact their previous loan would be recalled). The Feds provided capital for an American owned and operated company, Chrysler; not a foreign subsidiary of Fiat (35%), Daimler (20%) and Cerberus (45%).

        It is highly unlikely Chrysler will receive any more money either, unless they can prove the money will remain in the U.S.

        Chrysler is still planning to bring the Nissan Versa to the U.S. market like it has already done so in Argentina. So, the tie ups and complexities are becoming unmanageable. Hence, Chryco can say adios to Big Brother's helping hand.
      • 5 Years Ago
      Enough with the mergers already. I realize the realities of the market necessitate them, but I long for the days when you bought a French / Italian/ German car brand and knew it was a French / Italian/ German car, each with its respective national characteristics, for better or worse. Ugh. Oh well, if means we get funky Pugs in the US again, then I guess it's not all bad.
      • 5 Years Ago
      This truly would be an unholy alliance of the craptastic.
      • 5 Years Ago
      Well, they do have something in common, like minivans (http://en.wikipedia.org/wiki/Fiat_Ulysse) and utility vehicles/vans Scudo (http://en.wikipedia.org/wiki/Fiat_Scudo) and Ducato (http://en.wikipedia.org/wiki/Fiat_Ducato).

      But it strikes me that the two manufacturers with abysmal reliability and built quality record are even thinking about a merger... And before I get slammed with minuses, as a European, I know my share of people who didn't listen to all the warnings and statistics.
      • 5 Years Ago
      For some reason I think Fiat is more likely to do a deal with Nissan-Renault. Why? Because Chrysler has dealings with Nissan-Renault right now and in the near future, and Fiat just jumped on that bandwagon so unless NR wants their stuff comingled with PSA's stuff any Fiat deal with PSA would likely mean a break of Chrysler ties with Nissan-Renault.

      Not that any of us is the expert, mind you.
        • 5 Years Ago
        Stéphane, a couple of years ago, PSA took out a full-page ad in one of the American car magazines announcing their return. The ad had subtle "attitude", which I didn't quite understand, but it was clear that they were coming back. It didn't say when or how though.

        At this point, I'd chalked it up to another "tease" by PSA, but in truth, I would love to see them come back to the USA/Canada. I love many of their cars, and would absolutely shop them if I could. I go to France at least once a year and I always check out the new models I see. There are some unique cars in each size category that would do really well here, if they were available. I can see a lot of 1007, 207 variants, 308 variants (cc, 5-portes), C3's, C4's and maybe some C2's selling great in our market. I think the larger ones might not be the wisest choice to sell here, but if come here with "old thinking" in tow, they'll start with those ... and fail probably.
        Alex
        • 5 Years Ago
        Not necessarily, if a merger happens this will eliminate any potential competition to a certain extent...Chrysler isn't in any direct competition with the small cars that any of PSA offers...and PSA has a massive European presence, something Chrysler doesn't.

        Nissan still has something to gain from Chrysler, and Chrysler still has something to gain from Fiat & Nissan. Chrysler provides a R&D for Nissan's next-gen trucks, Chrysler gets a Dodge version of the Nissan Versa in South America. Cost cutting efforts & saving money.

        Fiat gets an easy entry to the US market with pre-set dealerships, can roll out possible versions of their cars as Chrysler/Dodge and re-introduce the Alfa Romeo brand.

        As to clarify...Chrysler is in ALLIANCE with Fiat & Nissan,so mergers have nothing to do with these alliances (depending on pre-set clauses) A MERGER would absorb the associated costs and brands under one umbrella and killing off duplicates in the process to restructure each's brands unique presence (something the Big 3 could use as a lesson)

        in a nutshell...Nissan still has a healthy competitor and Chrysler is the one receiving the massive media attention & practically getting R&D for little to nothing...while Fiat, hopefully knows what it's doing IF their is such a merger in the talks.
        • 5 Years Ago
        That reminds me of a French article dated from September 2007 I saw where Paul Betts editorialist of the Financial Times suggested the idea of a merge between Renault and Peugeot-Citroen http://www.trends.be/fr/economie/entreprises/12-1634-43710/et-pourquoi-pas-une-alliance-renault-peugeot--.html (there was some rumors then the French government could buy a stake in Peugeot just like they did with Renault but that's another story)

        could we imagine a step further: Chrysler-Fiat-Renault-Nissan-Peugeot/Citroen?
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