Despite denial of Fiat/Opel tie-up, critics say alliance would be "far more compelling" than Chrysler deal
Despite Fiat SpA chairman Luca de Montezemolo (above) denying that his company is interested in purchasing General Motors' Opel brand, a new report by The Wall Street Journal indicates that many investors and analysts apparently find the alleged tie-up to be "far more compelling" than Fiat's proposed alliance with Chrysler. If such a deal were to be consummated, it would make Fiat Europe's number-two automaker, and the prospect of the increased power and lowered overhead that could result still has speculators buzzing.
For their part, Opel spokespeople are declining to comment on the conjecture.
[Source: The Wall Street Journal | Image: Fabrice Coffrini/AFP/Getty]
Reader Comments (Page 1 of 2)
zamafir 1:08PM (4/23/2009)
so where is chrsyler going to go for a hand out now
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Jrejre 1:11PM (4/23/2009)
That guy looks like he just got the crap beat out of him.
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Richard S. 4:43PM (4/23/2009)
That's the look of someone who just test drove a Dodge Caliber.
Alex Klein 7:28PM (4/23/2009)
Or saw a Chrysler Sebring
MemphisNET 1:13PM (4/23/2009)
The critics are overly critical of EVERYTHING because thats their jobs.
You have two automakers, both in trouble, both with promising futures that just need to get through the mud. One has no brand equity in this country (Opel/Vax), the other still has legions of fans and believe it or not, happy customers.
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zamafir 1:58PM (4/23/2009)
Take a moment and step back from a Detroit centric view. Opel and Fiat make all their money in Europe. Combining the brands could help them achieve greater profitability without the risk of entering the fastest declining car market in the world, rife with unique snowflake environmental and safety standards. Businesses considering large acquisitions like these run the numbers, they don’t poll the enthusiasts of failed brands. Something tells me a Fiat-Opel merger would make a lot more sense on paper than a Fiat-Chrysler combination – especially in a realistic frame of mine, vs an enthusiast nostalgic viewpoint. Hell, if they listed to the Chrysler fans they’d find no matter what company swoops into save Chrysler, incapable of running a business themselves, they’ll always be faulted in the end.
My moneys on a euro focused strengthening of the Fiat brand, it makes a ridiculously greater amount of sense.
Sea Urchin 2:50PM (4/23/2009)
Zama, US market is HUGE, i would think that Fiat would want to enter this market on the cheap.
adrian 6:30PM (4/23/2009)
GM should hold onto all of Opel and dump/sell more of it's other gas guzzling brands instead. It would be a big mistake if they let it go. The car industry will pick up in time but the cost of petrol may not drop. Opel and their experience of building smaller cars could be a way to make money for GM in the US if they are still around.
GM just have to do a better job at convincing US drivers that these Opel made smaller cars is the way forward. Just don't call them Saturn this time, Stick to Opel.
Kumar 1:26PM (4/23/2009)
Well, if Fiat goes in with Opel, and GM dumps Opel AND Saturn, then Fiat could open Opel/Fiat stealerships at all of the existing Saturn sites. With fewer in number, they would be easier to manage from the start.
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In2uition 1:31PM (4/23/2009)
That's a very good observation. I wouldn't mind seeing that at all.
ehisforadam 1:32PM (4/23/2009)
But then they don't get any manufacturing in the US, unless GM throws in a plant with Saturn...They could do that with Hummer and their other brands too. By a brand, get a manufacturing plant for free!
Throwback 1:48PM (4/23/2009)
Excellent points. I do see GM throwing in some plants, lord knows they have enough of them. Unfortunately for Chrysler chapter 7 is next.
Swede 1:40PM (4/23/2009)
Of course two equals make for a more compelling partnership than one weak and one strong partner. Before you say they make the same cars and would not have any use of eachother, VAG also makes the same cars but they target different audiences and does it with great success.
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Erik 1:46PM (4/23/2009)
I'm no critic, but Fiat-Chrysler seems to make more sense to me.
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Jei 4:15PM (4/23/2009)
Why?
Chrysler is getting Fiat's small car platform and logistics.
Fiat is only getting to use Chrysler's dealer network...which is cramped as it is.
If a Fiat-Opel tie-up were to happen, it would to Fiat's advantage to demand that they get exclusive rights to the (outgoing) Saturn dealer network. GM ain't gonna use it anyway.
Vetmstr 1:51PM (4/23/2009)
My god that man is a poster-child of why the SUN is not your friend.
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Mike 2:28PM (4/23/2009)
WRONG! Fiat/Opel would make an aoutmaker that is 90% focused in Europe (9% South America, 1% who cares) and most of that is Western Europe (not Eastern Europe where Chevrolet is the stronger name for GM). They can't combine overhead as easily as the "analysts" think due to labor laws in the EU. Opel and Fiat worked together in the early part of this decade and nothing came out of it.
Fiat/Chrysler would give Fiat a large dealer network overnight (too large yes, but better than nothing which is what they have now). There is 0% overlap in their products and markets. Fiat can either sign an agreement ($0 down) to exchange technology or buy parts of Chrysler if it gets broken-up. Either way, they have the upper hand.
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~D. 2:45PM (4/23/2009)
yup. FIAT has models but doesn't have an outlet to sell them in [the world's largest market] and is not interested in adding more manufacturing capacity in Europe. Chrysler has an excess in manufacturing capacity, but lacks a lineup of models in many key segments that FIAT occupies. Not to mention the fact that of the American carmaking corporations, Chrysler has the weakes presence overseas, especially in Europe (and other foreign markets FIAT does well in.) The interesting story there is the fact that both Chrysler and FIAT both have a sort of manufacturing ennui, in which if they had to continue going at it alone, they would probably quit, because neither really feel like making cars anymore. The story is different with Opel, and if the timing were better, and the Chrysler/FIAT deal were consummated and well on its way, they might go for it. But first thing's first.
DJB 2:56PM (4/23/2009)
Fiat, or any automaker in the market for gaining a foothold in the North American market, does not need Chrysler as an entity nor would they pay greater than value. Unfortunately Chrysler's assets (factories, dealerships, supply chain, labour contracts) are worth more under formal Chapter 11 restructuring where others can pick and choose which assets they want, than as a whole package.
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Rich 3:02PM (4/23/2009)
Yeaargh! It's Davros!
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