MILAN — Fiat is trying to build a global automaking powerhouse out of parts scavenged from broken-down General Motors and Chrysler.
The Italian automaker struck a deal last week that could eventually give it a controlling interest in Chrysler, but its ambitions are bigger than that: Now it is negotiating to buy GM’s main European unit, which includes the Opel and Vauxhall brands.
Fiat Group CEO Sergio Marchionne’s grand plan is for Fiat to spin off the resulting automaker, which he said would be big enough to compete with the mightiest of car companies, with capacity to turn out some 5.5 million vehicles a year.
Fiat could become the fifth- or sixth-largest automaker in the world if it can complete its deals with Chrysler and GM, said Michael Robinet, vice president of global vehicle forecasts for CSM Worldwide, an industry consulting firm in Northville, Mich.
Fiat is considered a smaller, regional player, ranking 10th worldwide in cars and trucks produced.
Looks at second spot
Fiat’s aim eventually is become the world’s No. 2 automaker, behind Japan’s Toyota, according to Germany’s economics minister, who met with Marchionne on Monday in Berlin.
But there are lots of questions about whether Marchionne can pull it off.
The plan is audacious, not the least because Marchionne is hoping to execute it without putting down a cent. Fiat is hoping to take advantage of the crisis in the auto industry by obtaining billions in loan guarantees from the U.S., Canada and various European governments.
"We’re in the middle of an automotive yard sale,” Robinet said. Marchionne has "gone to a yard sale and picked up the really good stuff.”
Fiat’s deal to take a big piece of Chrysler could not only save Chrysler, it would give Fiat access to the huge North American market.
And by buying GM’s main European operations, Fiat could cut its production and development costs through economies of scale and gain expertise in building midsize and larger cars. Fiat, the maker of Fiats, Alfa Romeos and Ferraris, specializes in small cars.
Marchionne made the rounds in Berlin on Monday, seeking to persuade German Chancellor Angela Merkel and her economics and finance ministers that Fiat can save many of the 25,000 jobs at Germany’s Opel, not to mention its supplier network. GM employs some 54,000 in Europe, including at Sweden Saab and Britain’s Vauxhall. It is not clear whether Saab would be part of a deal with Fiat.
by the associated press
The Italian automaker struck a deal last week that could eventually give it a controlling interest in Chrysler, but its ambitions are bigger than that: Now it is negotiating to buy GM’s main European unit, which includes the Opel and Vauxhall brands.
Fiat Group CEO Sergio Marchionne’s grand plan is for Fiat to spin off the resulting automaker, which he said would be big enough to compete with the mightiest of car companies, with capacity to turn out some 5.5 million vehicles a year.
Fiat could become the fifth- or sixth-largest automaker in the world if it can complete its deals with Chrysler and GM, said Michael Robinet, vice president of global vehicle forecasts for CSM Worldwide, an industry consulting firm in Northville, Mich.
Fiat is considered a smaller, regional player, ranking 10th worldwide in cars and trucks produced.
Looks at second spot
Fiat’s aim eventually is become the world’s No. 2 automaker, behind Japan’s Toyota, according to Germany’s economics minister, who met with Marchionne on Monday in Berlin.
But there are lots of questions about whether Marchionne can pull it off.
The plan is audacious, not the least because Marchionne is hoping to execute it without putting down a cent. Fiat is hoping to take advantage of the crisis in the auto industry by obtaining billions in loan guarantees from the U.S., Canada and various European governments.
"We’re in the middle of an automotive yard sale,” Robinet said. Marchionne has "gone to a yard sale and picked up the really good stuff.”
Fiat’s deal to take a big piece of Chrysler could not only save Chrysler, it would give Fiat access to the huge North American market.
And by buying GM’s main European operations, Fiat could cut its production and development costs through economies of scale and gain expertise in building midsize and larger cars. Fiat, the maker of Fiats, Alfa Romeos and Ferraris, specializes in small cars.
Marchionne made the rounds in Berlin on Monday, seeking to persuade German Chancellor Angela Merkel and her economics and finance ministers that Fiat can save many of the 25,000 jobs at Germany’s Opel, not to mention its supplier network. GM employs some 54,000 in Europe, including at Sweden Saab and Britain’s Vauxhall. It is not clear whether Saab would be part of a deal with Fiat.
by the associated press
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