CEO’s revamp of Fiat Chrysler makes it a merger target – USA TODAY
Fiat Chrysler CEO Sergio Marchionne’s latest reimagining of the company he created could be the highlight of his career.
Just last month, Fiat Chrysler Automotive had a spotty product line, an uncertain future and few prospects of attracting a strong partner. Today, it’s a candidate for merger or acquisition by a number of automakers. Now it’s a question of whether Marchionne played his cards right.
Marchionne reshaped and refocused Fiat Chrysler’s product plan Jan. 27 to weed out unprofitable brands and car lines. Marchionne announced he would stop building compact and midsize cars — a sector where the company hasn’t been succeeding — and focus on Chrysler’s strengths and Fiat’s potential assets. Bye-bye, Chrysler 200 and Dodge Dart. Hello, Ram Power Wagon, Jeep Grand Wagoneer and more.
While the plan could transform Fiat Chrysler into a plum many automakers could covet as a money maker and door to the U.S. market for a foreign automaker, there’s still a lot more that needs to be done.
“It’ll take more than dropping a couple of lackluster cars to attract a first-rate partner,” Autotrader senior analyst Michelle Krebs said. “Fiat Chrysler also needs to address productivity, plant efficiency, quality and profit margins.”
Marchionne has long said Fiat Chrysler needs to grow by merging or working with another automaker. The automaker’s latest strategic recalibration is a road map from here to there.
Candidates to buy or merge with Fiat Chrysler include any company that:
• Doesn’t sell large pickups. Fiat Chrysler is beefing up its Ram lineup, focusing on vehicles like the profitable Ram 1500 and 250 pickups.
• Admires Jeep. The sterling global SUV brand with growing sales and the potential to earn billions.
• Believes in American muscle. Fiat Chrysler can add large, profitable performance cars like Chrysler 300, Dodge Charger and Challenger to their lineup.
• Likes “boutique” cars. Fiat Chrysler has done well with a few models that fall outside the mainstream of the current auto industry, like its Fiat 500 and its Chrysler minivans. The new Chrysler Pacifica was the star of Chrysler’s auto show last month.
• Wants to cash in on high-end Italian style. They would need to cash in on Alfa Romeo and Maserati, by improving or selling one or both of the luxury brand.
• Could use a strong U.S. sales network. Fiat Chrysler has a strong U.S. dealer network.
Those criteria open the door to many potential bidders.
Best of all, from an American point of view, most candidates would want Chrysler’s resources in North America. They would need Chrysler engineers, designers, assembly workers and dealers. Communities from Detroit, Toledo and Windsor to Saltillo, Mexico, could continue building Jeeps, Ram trucks, Pacifica minivans and 300, Charger and Challenger performance cars for a stronger and more stable company.