Chinese automaker reportedly bids for Fiat Chrysler – USA TODAY
A Chinese automaker reportedly made a quiet bid to acquire Fiat Chrysler Automobiles, raising the distinct possibility that the traditional member of the Detroit Three that was bailed out by U.S. taxpayers could wind up with Chinese ownership.
After years of pursuing a deal to gain greater global scale, the Italian-American automaker recently rejected an acquisition bid by an unidentified Chinese company, according to Automotive News.
The publication also reported that multiple Chinese automakers are weighing a similar bid for the maker of the Jeep, Ram, Chrysler and Dodge brands.
A Fiat Chrysler spokeswoman declined to comment Monday morning.
But investors were heartened by the prospect of a deal. Fiat Chrysler shares traded in New York rose 8.2% to $12.56 at 10:44 a.m.
The U.S. government bailed out Chrysler in late 2008 and 2009, funding the company’s bankruptcy and helping to negotiate Italian automaker Fiat’s deal to gain control of the brand. Several years later, Fiat gained full ownership of Chrysler.
A deal would almost certainly raise political hackles in the U.S. over the possibility that a company rescued by taxpayers could yield to Chinese ownership amid consternation over the future of American manufacturing.
Any Chinese deal to acquire Fiat Chrysler would likely be predicated on a global growth plan, including access to the company’s established network of dealerships.
The Jeep brand, in particular, is highly lucrative because of its popular sport-utility vehicles and crossovers. The Ram brand’s pickup trucks and vans are also popular.
Fiat Chrysler CEO Sergio Marchionne has argued for years that industry consolidation is necessary to help automakers meet global fuel economy standards and demands for investments in electric cars and self-driving technology.
He briefly pursued a tie-up with cross-town rival General Motors but was rebuffed. And speculation that Fiat Chrysler could sell out to the world’s largest automaker, Volkswagen Group, has also fizzled out.
The identity of the Chinese automaker reportedly pursuing Fiat Chrysler is a mystery, although Automotive News noted that representatives of Great Wall Motor recently met with the company at its headquarters in Auburn Hills, Mich.
Another possibility is Fiat Chrysler’s joint venture partner in China, Guangzhou Automobile.
A Guangzhou executive told USA TODAY in January that the company was considering plans to expand its ties to Fiat Chrysler in the U.S.
Fiat Chrysler’s ties to China have been growing in recent years after the company made an effort to re-enter the market and try to catch up to other global rivals that had zoomed past the Auburn Hills automaker in Asian.
After establishing a joint venture with Guangzhou in 2010 the automaker finally began building the Jeep Cherokee in China in 2015 at a plant in the south central province of Hunan.
In April 2016, Fiat Chrysler began building the Jeep Renegade at a second plant in China, also through a joint venture with Guangzhou.
In May 2016, Hu Chunhua, a high-level member of the Chinese Communist Party, led a delegation visit to Fiat Chrysler’s headquarters.
At the time, Fiat Chrysler said the visit reinforced the strong relationship with Hu’s Guangdong province. Marchionne has also emphasized that, in addition to Jeep, there are two other brands that have great potential in China and globally: Maserati and Alfa Romeo.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.