Here's a gist of FCA's future financial doom problems

[travelnutz]

Copied and pasted AP article dated 5-31-2015 tells it quite clearly:


Chrysler's future remains uncertain as CEO looks to consolidate


Sergio-Marchionne-FCA-five-year-plan-2014

Chrysler Group LLC Chairman and CEO Sergio Marchionne speaks to investors at the automaker's world headquarters in Auburn Hills, Mich., Tuesday, May 6, 2014. Fiat Chrysler Automobiles NV unveiled its business strategy for the next five years as it prepares for life as a newly merged company. (AP Photo/Carlos Osorio) ( (AP Photo/Carlos Osorio))


PrintEmail
Rick Haglund By Rick Haglund
Follow on Twitter
on May 31, 2015 at 7:00 AM, updated May 31, 2015 at 7:05 AM


Here we go again. Maybe.

Chrysler is on a roll. The Auburn Hills automaker has posted sales increases for 60-plus months straight. Its Jeep and Ram truck brands are among the hottest in the industry. And the company is profitable.

But Fiat Chrysler Automobiles CEO Sergio Marchionne has set off a sharp alarm about the company's future.

He's telling anyone who will listen that the auto industry must consolidate because it's using too much capital to develop new vehicles and on duplicative technologies to meet upcoming fuel economy regulations.

The New York Times reported last week that Marchionne sent a private email in March to General Motors Corp. CEO Mary Barra, offering to sell FCA to GM. But the offer was rebuffed.

Marchionne is sounding a lot like one of his predecessors, former Chrysler CEO Bob Eaton, who similarly warned that the automaker's future was in jeopardy as an independent company.

That was back in 1997, when Chrysler was selling Jeeps and minivans as fast as it could build them and churning out record profits.

But Eaton saw that Chrysler faced an uncertain future. It had little business outside of the slow-growing North American market. And like today, Eaton questioned whether Chrysler could continue to afford investments needed to refresh its products and meet future federal regulations.

He found a marriage partner in German automaker Daimler-Benz that led to a spectacular divorce, a contributing factor in Chrysler's 2009 bankruptcy.

Marchionne's problem is that he can't find anyone who's attracted to FCA.

"What GM or some other larger company has to gain from merging with Fiat Chrysler is not clear to me," Michelle Krebs, director of automotive relations at AutoTrader.com, said in an email.

While Chrysler is posting sales records, it is not nearly as profitable as GM and Ford Motor Co. And Fiat faces a variety of troubles, including outdated factories.

That will make it difficult for Marchionne to keep up with those companies and other major automakers in making future product investments.

"He has a huge development bill to pay in order to update his products and rejuvenate brands that do not fare well in the minds of consumers or are just unknown," analyst Alan Baum said in an email.

Marchionne "comes at this process from weakness and as the economy/auto market declines, even modestly, he will be in a weaker position," Baum said.

Veteran Forbes autowriter Joann Muller last week said that Volkswagen probably is the only viable merger partner for FCA, although there would be significant hurdles to a deal.

But such a hookup would likely result in Volkswagen killing the Chrysler and Dodge brands, she wrote. That would threaten thousands of good-paying jobs in Michigan.

And it might not sit well with U.S. and Michigan taxpayers who contributed billions of dollars to save Chrysler jobs just six years ago.

[parkersdad]

All of this is BS. Here is some more BS. Read the part where the Obama administration gave Ford $8 billion to create green cars. If you're going to do that you need to give it to all three American manufacturers in my opinion.http://www.forbes.com/sites/joannmuller/2012/08/29/automakers-report-card-who-still-owes-taxpayers-money-the-answer-might-surprise-you/

[hone_eagle]

Yup
I said the same spoon ,got some angry pm's for it .
Agree ,if the market is 11 million they will get built by 2 companies or 10.

[spoon059]

Like I said a couple years ago... there is a set market for new vehicles in the US. Whether there are 10 manufacturers or 5... Americans will still by X number of vehicles.

I said this back then, and I say it now. We should have let GM go under. I would estimate 75% of GM employees and contractors would have found work under Ford, Chrysler, Honda, Toyota, Kia, etc. All those manufacturers would have needed more trained employees to handle the increased workload when fought to absorb GM's market share.

Yea, some upper management would have lost their jobs. Some union guys would have to take a pay cut. Life is tough. When the local economy took a dump 10 years ago, my father-in-law lost his union truck driving job. He took it like a man and started his own business.

The federal government ought not have stepped in to private business the way they did before. They really ought to keep out of it in the future.

The CEO of FCA is right though... automakers are going to need to be innovative to keep up with government regulations. I believe Toyota and Ford(?) collaborated together to develop a new hybrid system. Collaborations or straight mergers are likely to be necessary in order for manufacturers to stay innovative and keep up with standards.

We need more than a few companies, or else we will have monopolies and higher prices. With competition they are forced to produce better products and keep prices down (relatively speaking).

I love the new Rams. I hope FCA finds a partner. But... I really hope that the federal government doesn't screw the taxpayers again like they did with the previous bailout nonsense.

Now... if the government wants to provide low interest rate LOANS (where the taxpayers don't lose money and there are set terms to pay the loan back IN FULL) for manufacturers to develop more fuel efficient engines... I would consider that.

[parkersdad]

Didn't they just close a thread identical to this? Let it rest

[gmcsmoke]

in on juan

[MM49]

travelnutz wrote:
sch911, etc,

It's a masked sale under the guise of a merger aimed at consolidation as stated in WSJ and many other publications/reports. The Fiat family has publically said they want to sell and get out and it was recorded live. They see the writings on the wall and that's why they want out while there's still value. Marchione is litterally begging for someone/anyone to come to rescue FCA before the inevitable occurs.

Merging with or consolidating with a much larger corporation or company basically means being swallowed up. A small entity has virtually no administrative power or say so especially when having been barely profitable, high long term debt, a very checkered background, and having a bleak future going forward when merged or taken over by a much larger entity.

Dreamners can dream but that will have nothing to do with reality or the decisions others make. Spin it any way you care to but it's the facts that count and tell the story very accurately.

My state will lose so many billions of dollars already spent trying to save Chrysler and now FCA. That's on top of the many thousands of lost jobs!

"Merging with or consolidating with a much larger corporation or company basically means being swallowed up." Tell that to Jeep.
They are currently building several more assembly plants around the world to satisfy demand. Your information is that of a blind fool as usual.
MM49

[sch911]

travelnutz wrote:
Dreamners can dream but that will have nothing to do with reality or the decisions others make. Spin it any way you care to but it's the facts that count and tell the story very accurately.

Have you read my sig? Care to guess who I work for?

[OutdoorPhotogra]

The standards are meant to kill of trucks and SUVs - the products consumers want the most.

I'll admit my bias but I would love for Ford to buy Jeep. We currently own an F-150 and a Chrysler Town and Country. I have mostly been a Ford guy but also owned a Dodge Dakota. My experience with customer service has been light years better at Ford dealerships over Dodge. Maybe it was just the ones I dealt with but it was across multiple dealerships in different regions. And I didn't have a local dealer to deal with warranty work when Chrysler closed dealerships in 2009.

[travelnutz]

sch911, etc,

It's a masked sale under the guise of a merger aimed at consolidation as stated in WSJ and many other publications/reports. The Fiat family has publically said they want to sell and get out and it was recorded live. They see the writings on the wall and that's why they want out while there's still value. Marchione is litterally begging for someone/anyone to come to rescue FCA before the inevitable occurs.

Merging with or consolidating with a much larger corporation or company basically means being swallowed up. A small entity has virtually no administrative power or say so especially when having been barely profitable, high long term debt, a very checkered background, and having a bleak future going forward when merged or taken over by a much larger entity.

Dreamners can dream but that will have nothing to do with reality or the decisions others make. Spin it any way you care to but it's the facts that count and tell the story very accurately.

My state will lose so many billions of dollars already spent trying to save Chrysler and now FCA. That's on top of the many thousands of lost jobs!

[philh]

Dodge and Chrysler are selling some lesser fuel efficient cars. Ford and GM are jointly creating new efficient transmissions. Ford and GM both have electric and electric hybrid cars.

The proposed federal cafe standards are devestating and at this point unobtainable.

[sch911]

Marchione is only stating the obvious. The auto industry is not sustainable as it is. The industry is cyclic. Let's not forget that GM was almost out as well. Industry consolidation is his remedy. All auto companies should be concerned, not just FCA. He is NOT proposing the sale of FCA, that he has made very clear. Although you'd never know it in this article.

[Bluhorn]

:R

[Jack_Diane_Free]

In my opinion there are too many automobile manufacturers chasing the same consumer dollar. Back in 2008 was the perfect time to 'cull the herd' and let one or more of these companies die as one or more will eventually. Unfortunately that is not good for the thousands of workers and if Marchionne is trying to flog the company in good times and can't he does not stand a chance when times get tough. I do not think there will ever be another bail out.

[hone_eagle]

Why would anyone want to merge if they just wait for FCA to go away and leave more room in the market place for the rest ?
Pick up the pieces at basement prices like jeep and mini van.
Many have come and gone before ,the workers in those plants will just have a new name on their pay checks.