CEO Of Chrysler, Marchionne In Merger Talks With GM?

WSJ article today. GM and Ford total LT or ST debt issued= ZERO. Fiat Dept PAYMENTS $2.9Billion/yr, that $2.9B would FUND 2 new vehicle developments/year if it didn't have to go to debt payments. fiat loaded up on debt to get chrysler. Margins for fiat overall is 1/2 to 1/3 that of GM, Ford, Toyota, Honda etc. Fiat is about 3-4% margins vs. the others at 8-12% margins.

Given that if I was a car mfg, do I want to add that debt structure and margins to my business?? That's one question the other mfg need to be able to answer.

I think it will be hard for Fiat to find willing partners, as they are finding out now. Ovetures to major mfg have so far be quickly rebuffed.

In the end, looking either at investments, or aquisitions, which I have been part of, one of the veryt first question to as is "What is the compelling sustainable competiative advantage that Fiat has compared to their competitors? or that they can bring to our company?"

Not being part of the auto companies, I don't have enough knowledge to answer that question, but I'm sure the auto companies can, and have answered that question. And Fiat better be prepared to tell others what sustainable competative advantage they have.

Unless there is a strong competative advantage, there is no reason to proceed further, you walk away from the table.

If there is a compelling case, then it's time to talk business.

I guess time will tell us if any other car mfg thinks there is a sustainable competitive advantage Fiat can bring to the table.

GM lost me when they got rid of Pontiac (GTO, Trans Am) and kept Buick (portholes).

GM fan boards are discussing the possibility of a hostile takeover,Wall street could care less about fans and loyalty if there is a buck in it...........

eightballsidepocket wrote:

There have been pluses and minuses to the Fiat merger. I think the biggest problem is Marchionne. He appears to not give a @#$@# about Chrysler production or it's impact on local and national economies.

I completely agree.

Perrysburg Dodgeboy wrote:

proxim2020 wrote:
Link

Without the benefit of the change in tax status FCA US would have earned a profit of just $312 million compared with a profit of $486 million. that is NET not PRE Tax

Ford, in contrast, earned $1.3 billion in pre-tax profits in North America during the first quarter and General Motors earned $2.2 billion. That is Gross or pre tax not net. nice try.

"(Fiat Chrysler Automobiles) appears to be fundamentally overvalued. It has very limited profitability, it is so loaded with debt it makes little in the way of earnings, it is burning cash and it is not able to pay dividends," Bernstein Research analyst Max Warburton said in a report published earlier this week.

They ain't doing that well.

Ford first-quarter profit misses expectations, 2015 profit outlook affirmed "Ford's overall first-quarter net income fell 7 percent to $924 million, or 23 cents a share, from $989 million, or 24 cents a share, a year earlier. Analysts expected earnings of 26 cents a share, according to Thomson Reuters I/B/E/S."

GM also missed it's mark as well!

Fiat Chrysler returns to $101.2M profit in Q1

FCA is not as big nor do we sell as many vehicles as Ford or GM so our profits are not as big. But given the fact that Ford out sell us by what 3 to 1 someone said, it looks like FCA is doing just as good if not better then the other two big dogs. Look at NET PROFITS of each not the net of FCA and the pre or gross of Ford and GM.

Hat in hand? Some of you guys are just screwed-up. Fiat Chrysler wants to collaborate with others on new vehicles: definition, work jointly on an activity, especially to produce or create something.LINK

Don

While FCA doesn't sell as much as the other 2, they aren't making as much profit on what they are selling either. At the end of last year, FCA profit margin was only at 4.2% while Ford is at 12% and GM is at 8%. Volkswagen almost cleared 14%. I'm not saying FCA is completely insolvent, but they aren't flying high either. With a margin so low, no one is interested.

Every article I've read about Sergio's email to GM stated that Sergio was interested in a merger. Not a collaborative agreement, joint venture, or a partnership. Now the idea of such a merger would be reducing costs in developing technology for vehicles and increase ROI. However, for months the guy has been preaching to the industry that more mergers are needed in order for the industry to increase profitability. It looks like he's seeking on last big merger before he retires. Analysts seem to all agree that if one of the top automaker merges with FCA then it would probably only significantly increase profitability in FCA's favor. So far those automakers seem to agree.

GoPackGo wrote:

larry barnhart wrote:
He also wants VW to buy them out. Jeep seems to be at the bottom of the pile at this time so what "difference does it make"??

chevman

Can't believe VW would be interested. VW Group includes Porsche, Audi, MAN, and Lamborghini, among others.

What would be gained ?

Ferrari, Maserati, Alfa Romeo, Fiat, Lancia, on the automotive side then they own Ducato, Iveco and Doblo chassis-cabs. Then there are the farm equipment. Do I need to go on....because they also own VM motor and on and on.

BTW the VW deal was never going to happen and it was VW that started the talks not the other way around. "VW is stumbling in the U.S.; acquiring Fiat Chrysler would immediately boost VW’s share of the U.S. vehicle market to 15 percent from the current 4 percent. Fiat Chrysler owns the Alfa Romeo luxury brand, which VW has openly admitted coveting. VW would gain the Ram pickup brand and Jeep, helping the German company towards its goal of world domination by 2018." LINKY

larry barnhart wrote:
He also wants VW to buy them out. Jeep seems to be at the bottom of the pile at this time so what "difference does it make"??

chevman

Can't believe VW would be interested. VW Group includes Porsche, Audi, MAN, and Lamborghini, among others.

What would be gained ?

proxim2020 wrote:
Link

Without the benefit of the change in tax status FCA US would have earned a profit of just $312 million compared with a profit of $486 million. that is NET not PRE Tax

Ford, in contrast, earned $1.3 billion in pre-tax profits in North America during the first quarter and General Motors earned $2.2 billion. That is Gross or pre tax not net. nice try.

"(Fiat Chrysler Automobiles) appears to be fundamentally overvalued. It has very limited profitability, it is so loaded with debt it makes little in the way of earnings, it is burning cash and it is not able to pay dividends," Bernstein Research analyst Max Warburton said in a report published earlier this week.

They ain't doing that well.

Ford first-quarter profit misses expectations, 2015 profit outlook affirmed "Ford's overall first-quarter net income fell 7 percent to $924 million, or 23 cents a share, from $989 million, or 24 cents a share, a year earlier. Analysts expected earnings of 26 cents a share, according to Thomson Reuters I/B/E/S."

GM also missed it's mark as well!

Fiat Chrysler returns to $101.2M profit in Q1

FCA is not as big nor do we sell as many vehicles as Ford or GM so our profits are not as big. But given the fact that Ford out sell us by what 3 to 1 someone said, it looks like FCA is doing just as good if not better then the other two big dogs. Look at NET PROFITS of each not the net of FCA and the pre or gross of Ford and GM.

Hat in hand? Some of you guys are just screwed-up. Fiat Chrysler wants to collaborate with others on new vehicles: definition, work jointly on an activity, especially to produce or create something.LINK

Don

You guys are funny! nothing like stirring a pot where there is nothing to stir!

Lot's of Dodge bashing. Where are the EcoD trolls? Where are the mods? Better lock up all the anti-Dodge threads quick!