FIAT GROUP AND CHRYSLER ENTER INTO A GLOBAL STRATEGIC ALLIANCE
Fiat S.p.A. and Chrysler LLC announced today they have signed the agreements to establish a global strategic alliance. The Alliance comprises two elements: Fiat contributing to Chrysler rights in various platforms, technologies, and models, management services and cooperation and assistance in key areas of Chrysler’s business, such as procurement and international distribution, and Fiat’s acquisition of a shareholding in Chrysler.
1.Statement from the CEO of Fiat Group, Sergio Marchionne
"This transaction represents a constructive and important solution to the problems that have plagued not just Chrysler in recent years, but the global automotive industry as a whole. Bringing together Fiat's world-class technology, platforms and power-trains for small and medium sized cars, and its extensive distribution network in Latin America and Europe with Chrysler's rich heritage, strong North American presence and talented and dedicated workforce will create a powerful new automotive company, while helping preserve jobs and a manufacturing industry that is critically important to the U.S. and Canadian economies,” the CEO of Fiat Group, Sergio Marchionne, said.
Our goal since we first entered discussions with Chrysler nearly a year ago was to leverage the strengths of both companies to yield the scale, efficiencies and cost savings necessary to create two stronger automakers able to compete more effectively on a global scale. This transaction is an important step toward achieving this objective.
Our work is just beginning, but together with our new partners at Chrysler we look forward to delivering on the vast potential this alliance holds and reintroducing to North American customers of some of our most popular brands, including Alfa Romeo and the award-winning Cinquecento.
We would not be here to announce this agreement were it not for the tireless dedication, focus and creativity of the US Automotive Task Force and their Canadian colleagues. As we worked our way through the myriad of obstacles and issues that arise in transactions such as these, they never lost faith in the project. Through this transaction, they have created the conditions for the reestablishment of Chrysler as a viable long-term participant in the automotive market.
Organized labor unions on both sides of the border have also made significant contributions in accepting reductions in benefits and equity in satisfaction of some of their claims. I would like to thank the leadership of both the United Auto Workers and the Canadian Auto Workers unions for all they have done and for constructively participating in our shared challenge of recreating a great Chrysler
Over the coming weeks and months, I will be spending a great deal of time meeting with Chrysler employees and touring its facilities. While our agreement must necessarily go through the U.S. legal system for a few weeks, we will be preparing ourselves to reemerge quickly as a reliable and competitive automaker. I believe Chrysler can meet the challenges posed by today’s difficult market conditions by tapping back into its innovative spirit, by focusing on quality as a cornerstone of its product offering and by listening to its customers and delivering the cars they want. It is a model we have strictly adhered to in the past few years at Fiat, and one I believe we can adapt here to write the next chapter in Chrysler's legacy.
The transaction which we have just finalized represents an historic moment for both Fiat and Italian industry. It is a significant step toward building a new and solid foundation for the future.
Today is also a day of great satisfaction for all women and men at Fiat. The fact that Fiat’s know-how has been appreciated at the most senior levels of the US and Canadian administration – to whom I express gratitude on behalf of our Group’s entire management team – is a source of significant motivation for the work ahead of us.
We are certain that a stronger and more international Fiat will emerge from this alliance, with an even greater capacity to compete in markets worldwide,” the CEO of Fiat Group, Sergio Marchionne, said.
The transaction will be implemented through an expedited sale of substantially all the assets of Chrysler to a NewCo pursuant to certain provisions of the US Bankruptcy Code. After intense consultations with the US Treasury and all the other constituencies, including, the government of Canada, the United Auto Workers (UAW) and the Canadian Auto Workers (CAW), Chrysler elected such route as the most effective to restructure its debt. As a consequence, today Chrysler will request the bankruptcy court in New York to approve the sale of Chrysler’s business to a NewCo. Subject to the approval of the regulatory authorities, if the Court will approve the Transaction it will require the parties to complete the transaction as soon as possible.
Pending this approval, the current Chrysler will continue its normal business operations and the US Treasury and the Canadian government will provide the company with financing in order to allow the performance of all its obligations towards the employees and to fund its on-going needs.
From the beginning of May Chrysler will benefit of new wholesale financing arrangements entered into with GMAC which will also offer retail financing
At closing of the Transaction, NewCo will assume the corporate name of Chrysler and become the owner of substantially all the Chrysler’s business without certain debts and liabilities.
At closing NewCo will issue in favor of Fiat an equity interest equal to 20% (by vote and value) on a fully diluted basis and Fiat will enter into certain industrial agreements with Chrysler.
Similarly, at closing the Voluntary Employee Benefit Association (VEBA) will be issued an equity interest equal to approximately 55% on a fully diluted basis of Chrysler. Such equity interest will be administered by the U.S. Treasury. UST and the Canadian Government will collectively hold the remaining 10% equity interest (on a fully diluted basis).
The new Chrysler will also benefit from the recently agreed new collective bargaining agreements with UAW and CAW and of a facility of the U.S. Treasury of approximately US $ 6.5 bn.
The new Chrysler will be managed by a board of directors consisting of nine directors: three directors will be appointed by Fiat. One of Fiat’s appointees must satisfy the criteria for independence under the New York Stock Exchange listing rules. VEBA and the Government of Canada will have the right to appoint one Director respectively. U.S. Treasury will have the right to make the initial appointment of four directors (three of whom must be independent).
Fiat will have right to receive up to an additional 15% equity interest (by vote and value) on a fully diluted basis. This stake can be obtained in three tranches of 5% each subject to the achievement of predetermined targets, in particular, achievement of regulatory approvals to produce the FIRE family of engines in the USA; achievement of sales of Chrysler vehicles outside NAFTA, and achievement of regulatory approval to produce a Chrysler model based on Fiat technology. Upon obtainment of such additional 15% interest, Fiat will also have the right to appoint another director of Chrysler.
In addition, Fiat will be granted an option to acquire an additional 16% shareholding (exercisable from Jan 1, 2013 until June 30, 2016). The price of such incremental equity will be determined in accordance to certain market standards but in any event will not exceed the then Fiat market multiple. This option will not be exercisable while the US Treasury outstanding loan exceeds US$3 billion.
Fiat’s shareholding will be capped at 49% until Chrysler has repaid in full the loan granted by the U.S.Treasury.
Fiat will contribute key technology and other resources to Chrysler.
In summary, the Fiat Contributions will consist of the following: licenses enabling Chrysler to use all Fiat Group Automobiles car platforms (and subject to any 3 restrictive agreement between Fiat and any third party) for the production of Chrysler vehicles in NAFTA; licenses enabling Chrysler to use certain of Fiat’s other key technology, such as engine technology; the on-going provision of management services in order to enable Chrysler to benefit from Fiat’s expertise in operational and industrial recovery; participation in Fiat’s purchasing and procurement programs; distribution of Chrysler vehicles outside NAFTA, in particular by giving Chrysler access to Fiat’s distribution network in countries in which Chrysler currently has a limited presence.
The alliance, a key element of Chrysler’s Integration Plan, would strengthen Chrysler viability for the long term with access to competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler manufacturing sites.
The alliance would also allow Fiat Group and Chrysler to take advantage of each other's distribution networks and to optimize fully their respective manufacturing footprint and global supplier base. The alliance does not contemplate that Fiat would make a cash investment in Chrysler or commit to funding Chrysler in the future.
Turin, April 30, 2009
Thursday, April 30, 2009
FIAT GROUP AND CHRYSLER ENTER INTO A GLOBAL STRATEGIC ALLIANCE
It is reported that Chrysler will enter Chapter 11 bankruptcy, today. So is the deal over. Probably not. Fiat intends to join forces with Chrysler even if it files for bankruptcy. Fiat Chief Executive Officer Sergio Marchionne is in Washington today.
Here's some details:
As of yesterday the final piece of the alliance deal was to have the smaller lenders of Chrysler sign on to a deal crafted by the Obama administration. The deal offered was to have these debt holders take a $2.25 billion buyout in cash in exchange for forgiving Chrysler's debt, These smaller lenders, about 40-46 small banks and hedge funds, are owed about 25% of Chrysler $6.9 billion in debt.
Well that deal fell through last night. It looks like Chapter 11 Bankruptcy will be announced today.
If the company files for bankruptcy, however, U.S. and Canadian governments would still provide about $4 billion with 80 percent from United States.
The plan would be for Chrysler to go through a quick bankruptcy, possibly concluded in a matter of a few weeks, where Chrysler's best assets would be sold to a new company to pay off the debts to creditors who didn't take the governments proposal.
This new company would be a "New Chrysler" with all the best assets. Fiat would then sign an alliance with this healthy company, initially taking a reported 20% stake and then rising to 35% once certain government criteria is met. This new company would be managed by Fiat.
The other owners of this new Fiat/Chrysler company would be a retiree health care trust fund at 55% and the remainder held by the government and creditors with specific percentages not available at the time of this posting.
This is all pretty preliminary so we'll have to wait until the end of the day to see if this is the way it'll play out. Stay tuned.
Wednesday, April 29, 2009
In the proposed alliance, Fiat would take an initial stake of 20 percent in Chrysler in exchange for giving the U.S. company access to its cutting edge small-car and engine technology. It could get 15 percent more by achieving government-set milestones. Fiat has an option to then purchase a majority interest in the company after all government loans are repaid.
Here's where the deal stands today, Wednesday April 29:
On Sunday, the UAW and Chrysler had reached a significant labor agreement that will save $240 million per year in operating costs. The UAW also struck an agreement that gives the union's Voluntary Employee Benefit Assn. (VEBA) health-care trust fund $4.5 billion in Chrysler stock, or about 55% of the fund's total financial backing. A VEBA representative will also hold a seat on Chrysler's board of directors.
The Union has yet to ratify this deal but it is expected to pass when it is voted on today.
Late Monday, the major bank and private equity lenders that hold 75% of Chrysler's $6.9 billion in debt agreed with the White House auto industry task force and Chrysler owner Cerberus Capital Partners to take just $2 billion of what it's owed, along with 5% of the company's equity.
The big hold up, though, is a group of 40-46 smaller banks, that collectively hold 25% of the debt, also need to sign on to the agreement. This agreement would have these smaller banks taking what amounts to 30 cents on the dollar. If Chrysler goes into bankruptcy, it is speculated these banks would get closer to 65 cents on the dollar. The White House is looking for at least 90% participation by the lending banks before signing off on the additional $6 billion in additional government financing.
Unless the White House extends its deadline, Chrysler will go into bankruptcy. But will that be the end?
Maybe not. It has been reported that Fiat will be interested in purchasing Chrysler assets and still have some alliance with what is left of Chrysler. These assets could be purchased on favorable terms, so Fiat, who is not cash rich at the moment, could still come back into the US economically.
We have just 24 hours to see how this plays out!
Tuesday, April 28, 2009
One model that comes up in the discussion is the Fiat Bravo. The Fiat Bravo comes as a 5 door hatchback but would be redesigned in the US by Chrysler as a 4 door sedan. Fiat would provide the chassis and Chrysler would add the 4 door sedan sheet metal.
Fiat Bravo Interior
The Fiat Bravo offers high style but with a lot of substance. Fiat Bravo has been awarded the prestigious five star Euro NCAP rating, placing it at the top of its category for safety, with a total score of 33 points. This is an important accolade which, together with the similar ratings given to the Grande Punto and Fiat Croma, is confirmation of the commitment of Fiat Automobiles SpA to all aspects of driver and passenger protection.
The Fiat Bravo is known as the benchmark in its category in terms of style and also, increasingly, for its proven substance and state-of-the-art technology. Examples include the introduction of the powerful Turbo T-jet petrol units and the revolutionary 1.6 Multijet diesel engine; the introduction of the innovative Dualogic sequential gearbox; the use and application of the most sophisticated systems and devices for passenger protection and for control of the car's dynamic behavior, as evidenced by the introduction as standard of a state-of-the-art ESP (Electronic Stability Program) device.
The Fiat Bravo would be definitely be an asset to the New Chrysler lineup in the future.
Monday, April 27, 2009
Fiat will unveil a new hybrid power system that will power the new Fiat Topolino super mini and the 500. The technology works with the 900cc twin turbo SGE (Small Gasoline Engine) gas engine coupled to a new Dual Clutch automatic transmission that has an integral electric motor with next generation lithium-ion battery technology.
Two cylinder SGE - Small Gasoline Engine, 0,9 l Turbo, bi fuel (gasoline/CNG hydrogen blend), 8 valves, 105 HP (gasoline mono fuel version) with Multiair technology
Fiat has released little about the hybrid system, but the 900cc twin turbo SGE engine uses Multi-air technology and is rated at up to 105hp in conventional form. In hybrid application it is reported to be at 90hp and the electric motor at 20hp.
The big news is packaging all this technology into a small space. Conventional hybrid cars are currently in mid to larger sized vehicles were it is easier to package what is essentially two power plants (electric motor and gasoline engine) and heavy batteries. Through advanced design and engineering, the new Fiat hybrid system will enable these units to be installed into the mini sized Fiat 500 (length 3.5 meters, 139 inch) and the new, upcoming Fiat Topolino super mini city car (length 3.15 meters, 124 inch). This technology, when combined with these smaller Fiats, promises to offer incredible fuel economy.
The new Fiat hybrid system is to be first installed into the Fiat 500 and then will show up in the new Fiat Topolino which is due for introduction at the 80th Geneva International Auto Show in Spring 2010.
This advanced hybrid system along with the new Multiair engine management system is just some of the technology Fiat will be share with Chrysler if the proposed merger goes through.
Friday, April 24, 2009
The New Fiat 500 owes its origins to the Fiat Trepiuno Concept car that premiered at the Geneva International Auto Show in 2004. The Trepiuno was designed by the Fiat Style Centre under the leadership of Frank Stephenson (an acclaimed designer who designed the 2001 Mini while at BMW and was the Director of Ferrari-Maserati Concept Design and Development where he penned the design of the Maserati MC12, Ferrari F430 and also oversaw the introduction of the Maserati Quattroporte and Ferrari Scaglietti and more recently was just appointed Stying Director at McLaren Automotive). The designer who penned the Trepiùno concept was Roberto Giolito, who was Director of Advanced Design Fiat Auto.
It evokes the shape and character of the Nuova Fiat 500 of 1957. The cheerful, fun look of the 1957 model is updated into a modern interpretation and shows how timeless the basic design was back then.
As with the original car, designed by Dante Giacosa, the modern designers lengthened the passenger compartment for maximum interior space and reduced overhangs. This also gives the design an airy feeling of space. Although compact, the Trepiuno has a wide stance and conveys an eager sporty look. The retro touches on the car pleasantly remind us of the icon from the past but are updated with modern technology.
The name Trepiuno is a contraction in Italian meaning "tre piu uno" or "3 plus 1" and refers to the seating arrangement. Unlike a "2 plus 2" which is meant to normally carry 2 people plus an occasional 2 others, the Trepiuno can carry 3 people normally plus an occasional additional passenger. This is all within it's small (3..3 meter/130 inch) length. This is due to an ingenious arrangement involving the space in front of the front passenger seat allowing it to be positioned farther up front, leaving more room for the rear passenger. This allowes a third passenger a comfortable amount of room behind the front passenger.
Below is the official Press release from Fiat on the Trepiuno.
With the 'Fiat Trepiùno' Concept car, Fiat is introducing the concept car designed by the Fiat Style Centre to represent the theme of 'back to the future'. The prototype is a modern reworking of the cars that marked the first wave of mass motorization in Italy
The 'Fiat Trepiùno' prototype, immediately conveys the idea of compactness. This is due to a side section made up of several overlapping layers and a shell-shaped roof that looks much smaller than the sides when viewed from above. The car's specific proportions and certain external traits give it a fun appearance that also conveys a clear impression of solidity and sturdiness.
Working with a total length of just 3.3 meters, the designers lengthened the passenger compartment to obtain a pleasing shape that features a very airy side view, a very short bonnet and minimal wheel overhang. The bonnet is wraparound type and folds over the sides while the omega-shaped rib, now as then, fills the front end without adding any grilles or friezes.
Due to its compact size and generous track dimensions, the 'Fiat Trepiùno' is also distinctive for its sporting, dynamic appearance. All these retro hints share one specific characteristic:
no motif has been re-used on the 'Fiat Trepiùno' before considering its usefulness on a present-day car, reviewing its functions and materials or even finding it new applications.
For example, the two headlights set into the front end are accompanied by two supplementary lights that are the very essence of cutting-edge technology. The tail-lights, on the other hand, work with LCD screens that display readings in graphic mode: and so communication passes from the car's interior to its exterior.
Another example of reworked style is the famous canvas hood found in some super minis of the past that has been interpreted by a Sky-dome on the 'Fiat Trepiùno'. The large window, continuous with the windscreen, stands in for the roof in linear and airy manner while emphasizing the two arched pillars.
The rear end proposes on the 'Fiat Trepiùno' a tailgate with a higher threshold that incorporates the rear window and roof spoiler. The solution adopted is very practical for loading and unloading everyday items.And so from the exterior to the interior.
The designers devoted the greatest attention to details without ever losing sight of the simplicity that is the keynote of the new car. Simplicity does not mean stripped bare, however, but exemplifies a particular approach to styling and construction where the aim is simplified use.
The result is an airy, spacious passenger compartment, a place where you can live well and be at your ease throughout the time you spend in your car. And it is also a welcoming, protective place due to the broad ring that delimits the entire interior space.The appointments include front seats of minimum thickness that offer more comfort than seats with conventional padding. They are made out of a layer of soft polyurethane that is complemented by a more rigid polyurethane structure to create a flexible, comfortable three-layer structure able to absorb all loads and, above all, not detract from the volume and space.
The seats allow so much room in the back that two further places can be created through a clever arrangement of backrests and cushions. For example, the split backrests fold forward to create the customary extended load compartment. Or they can be turned up to cover the extended boot area from prying eyes.
All this makes it possible to reconfigure the interior to suit the car's various applications and also to accommodate tall people in the back. In a normal 3+1 configuration, the front passenger seat is moved so far forward that it is almost swallowed up by the facia. The facia can be deflated by means of a conversion process to leave room for the front passenger's legs. This makes more room available for people in the corresponding rear seat.
New material technology has made the 'Fiat Trepiùno' the first car to transcend the classic '2+2' arrangements of certain coupés or open-topped sports cars and also the configurations of many city cars that limit passenger room to just two seats in the front. The prototype has thus made it possible for the 3+1 concept to be introduced for cars with little room in the back.
This has been achieved through an innovative structure, able to adapt to the most common transport needs and satisfy the greatest number of users: 2 seats, 3 seats, 3+1 emergency seat. To sum up, the Fiat prototype joins the boot compartment to the facia by means of a set of possible conversions that effectively make the interior fully reconfigurable.
The facia deserves a section of its own due to its shape and functional potential. In fact the 'Fiat Trepiùno' proposes an innovative solution that can incorporate the structure and equipment of a present-day dashboard. The upper area therefore accommodates 2 drawers while the controls on the central console are under a film. All you have to do is brush them with your fingers and a light will follow your movements and receive your input. A liquid crystal display extending from the same console shows the menu of another one-touch multifunction control. This control is located between the front seats so that it can be used in intuitive, simple manner without dropping your gaze from the road.
Light is also used to ensure the driver obtains a response to any operation: air conditioner temperature or main service activation. Night-time driving and night-time passenger compartment perception are also aided by lights through the use of LEDs concealed in the floor and door pouches.
An original design, then, to meet a new post-modern consumer trend that reworks retro shapes and styles to meet present-day needs. It is evident in fashion, music, furnishing and lifestyle: the term 'post-modern' surfaced at the end of the Nineties and inspired designer collections throughout the world. A look that juxtaposes retro smells and colors with up-to-the-minute symbols, objects and styles. A mixture of past and future, a style and construction movement that moves away from mass production to create a unique object.
Fiat Auto thanks the following for their help in the production of this concept: Bosch, Ficosa, Hitachi, I.D.E.A. Institute, IXFIN Magneti Marelli, Johnson Controls, Pirelli, Rieter and Toora.
Thursday, April 23, 2009
The Board of Directors of Fiat S.p.A met today, Thursday, April 23 in Turin, under the chairmanship of Luca Cordero di Montezemolo, to approve the Group's first quarter 2009 results. Here are the highlights of that report.
2009 FIRST QUARTER RESULTS
NOTWITHSTANDING DIFFICULT MARKET CONDITIONS, WITH REVENUES DOWN MORE THAN 25% OVER THE PRIOR YEAR, FIAT GROUP POSTED A BREAK-EVEN TRADING PERFORMANCE, WHILE MAINTAINING STRONG LIQUIDITY
AT €5.1 BILLION ($6.6 BILLION).
DEMAND IS EXPECTED TO IMPROVE GRADUALLY OVER THE REMAINDER OF 2009, AND THE GROUP IS CONFIRMING A MINIMUM TRADING PROFIT OF €1 BILLION ($1.3 BILLION) FOR THE YEAR.
• Revenues of €11.3 billion ($14.6 billion) were down 25.3% over Q1 2008, with volume declining across all businesses
• The Group recorded a narrow trading loss of €48 million ($62.1 million) (trading profit of €766 million ($995 million) in 2008), with the lost contribution from the €3.8 billion ($4.9 million) sales shortfall offset by aggressive cost containment measures already initiated in 2008.
• As a result , the net loss for the period was €411 million ($534 million), compared with net profit of €427 million ($555 million) for Q1 2008.
• Net industrial debt rose to €6.6 billion ($8.5 billion) from €5.9 billion ($7.6 billion) at end 2008 with cash absorption more than halved over Q1 2008 (from €1.5 billion ($1.95 billion) to €0.6 billion ($.78 billion)).
• Liquidity increased to €5.1 billion ($6.6 billion)from €3.9 billion ($5.0 billion) at the end of 2008.
• Trading activities are expected to improve throughout the remainder of 2009, and the Group expects to record a minimum trading margin of ~2% or €1 billion ($1.3 billion).
Wednesday, April 22, 2009
I have just received from Fiat this press release concerning the proposed merger between Fiat and Chrysler.
With just 8 days to go before the deadline to reach an agreement the tension is high. Bruno Vitali, an Italian Union representative who is in Detroit to talk with the UAW, gave an interview with the Italian Newspaper ANSA and stated the deal is "90%" done. Fiat and the UAW have stepped up and denied this. Here is the official Fiat press release about the incident.
Statement from Fiat spokesperson
We were surprised by the statement released to ANSA today by the FIM-CISL representative for the automotive sector, Bruno Vitali, in relation to the current negotiations with Chrysler.
No agreement has been concluded between Chrysler and trade unions in the US and Canada and the assertion that the overall agreement has been 90% defined is untrue.
The talks remain completely open and it is not currently possible to predict the timing or the outcome.
Turin, 22 April 2009
Here's the latest on the proposed alliance between Fiat and Chrysler gathered from the Internet.
Chrysler owes creditors $6.9 billion with loans secured by Chrysler assets (factories and technology). Last week they rejected an offer from the Obama administration's Auto Task Force for 15 cents on the dollar. A new counter proposal came out Monday that's reportably drawing criticism from the Obama Administration.
The new proposal has creditors seeking a 40% stake in the Fiat-Chrysler partnership, a seat on the company's board of directors and demands Fiat put $1 billion cash into Chrysler. This will be in exchange for writing off about a third ($2.4 billion) of the $6.9 billion in loans.
According to the new counter proposal, if Fiat doesn't inject $1 billion in cash into the deal "there is the prospect of a wealth transfer from the U.S. taxpayer to a foreign company of potentially $10 billion or more."
bailout money would be spent entirely on Chrysler and none of it would find it's way to Fiat. He also said all loans would be paid back. "Nothing is going to be taken out of the US and the main objective is going to be to repay every single dollar of taxpayer funding before anybody gets anything".
Monday, April 20, 2009
Sergio Marchionne has come to the USA today, Monday, April 20th to hammer out the deal between Chrysler and Fiat. It's been reported online that he'll be here in the USA until Thursday when he'll fly back to Torino, Italy for Fiat's first quarter earning report.
With just 10 days to formalize the alliance between Chrysler and Fiat, (in order to satisfy the Obama administrations deadline) Marchionne has his work cut out for him. He must get deeper concessions from the resistant UAW in the US and Canada and come to terms with creditors to whom Chrysler owes a reported $6.9 billion to.
If anyone can do this, Sergio Marchionne is the one. He is credited with pulling Fiat out of impending bankruptcy in 2004 and actually returning it to profit in 2006.
Stay tuned because this will go down to the wire!
Friday, April 17, 2009
The news this week on the proposed merger between Fiat and Chrysler has heated up this week. Here's it brief.
On April 15, Sergio Marchionne had an interview with a Canadian Newspaper where he put it on the line and told the UAW to match the lower costs of Japanese and German-owned plants in Canada and the US or Fiat will pass on the Chrysler alliance (the all-in labor costs at Chrysler Canada are $76 per hour while the Toyota Canada all-in rate is approximately $57 per hour*).
Marchionne has stated "Because of the lack of progress on labor negotiations, especially on the Canadian side, there was only a 50-50 chance the partnership would be formed."
"Absolutely we are prepared to walk. There is no doubt in my mind," he said. "We cannot commit to this organization unless we see light at the end of the tunnel."
Chrysler has until April 30th to merge with Fiat to qualify for long-term government aid. This amounts to about $6 billion and is needed to keep Chrysler alive.
For this deal to go through, besides needing to secure concessions from the UAW, Chrysler needs to reach an agreement with those who hold Chrysler's first-lien loans. Chrysler owes creditors $6.9 billion and has reportedly floated an initial offer of 15 cents on the dollar. Creditors rejected this and are putting together a counter offer.
Other news making the rounds are when (if) the merger goes through a new Board of directors, Chairman and CEO will be appointed. The plan drawn up by the US Treasury department calls for Sergio Marchionne to be the new CEO.
We have 2 weeks to see how this all plays out.
* Source: Chrysler
Wednesday, April 15, 2009
Just released today, here's a short clip of the New Fiat 500 being manufactured at it's factory in Tychy, Poland. It's neat to see the car being created before your eyes.
Here is some background on the plant that makes the Fiat 500. After Italy and Brazil, Poland ranks as the third largest manufacturing center of Fiat Group Automobiles in the world. Founded in May 28, 1992, following privatization of the FSM Small Engine Car Plant in Tychy, the Fiat Auto Poland plant makes several models of Fiat cars, such as the 500, Panda and Seicento. Since the start of its operation, Fiat Auto Poland has manufactured more than 4.5 million cars. In 2008, 482,885 cars rolled off the assembly lines of the Fiat Auto Poland plant in Tychy, a 36% increase compared to 2007.
Friday, April 10, 2009
Turin, 9th April 2009
Fiat Group rebuilds community nursery school in L’Aquila and provides technical support and manpower for emergency response
Following the serious earthquake which has devastated Abruzzo, the Fiat Group responded immediately to provide technical, financial and humanitarian assistance to the population struck by the tragedy.
During the month of April, for every Fiat, Alfa, Lancia and Fiat Professional car or light commercial vehicle sold, the Group, in collaboration with Italian dealers, will donate €40 ($53). It is expected that this activity will raise about €2.5 million ($3.3million) which will be used to rebuild a community nursery school in L’Aquila giving infants a safe place to be once again. In addition, Fiat Professional will provide 15 Ducato Panoramas to the affected communities for use as school transport. Significant initiatives are also being undertaken by Ferrari and Maserati.
In close collaboration with Civil Defence coordinators, several Group companies have already made equipment, vehicles and manpower available in the first phase of emergency response. Iveco provided 6 Massifs, three specially-equipped Eurocargos, two Iveco Astras (purpose-built for quarries/work-sites) and a Daily 4x4 with specialised equipment. New Holland offered machines and specialised operators and FPT Powertrain Technologies soundproof generator units to provide electricity to tented camps.
Continuous contact with organisations managing the emergency relief activities will enable a prompt and effective response to further needs which may arise.
Group plants located near the communities hit by the earthquake also sought to make a tangible contribution. The Sevel plant in Val di Sangro and the Magneti Marelli plant in Sulmona provided support for initiatives of their employees and managers.
Turin, 8 April 2009
Monday, April 6, 2009
The Award is an expert, independent judgment of all new cars on the European market. It is NOT like the car of the year awards done here in the USA by a car magazine to boost revenue.
Fiat holds the record for winning the prestigious European Car of the Year Award. Winning it 9 times over the years. Here are the cars that Fiat has won with. Each one set a new standard in automotive design and shows a heritage of automotive excellence that is handed down to all future Fiat cars.
Sunday, April 5, 2009
Just because a car is small doesn't necessarily make it any less of a complete car. Successful small car design is a challenge. Here are just some of the challenges faced by automobile companies. The basic facts are that fitting 4 or 5 full size people into a smaller space takes a lot of design and engineering talent. This talent costs money. Now combine the safety standards that automobiles must meet without having the luxury of a lot of extra space (that can be used to absorb impact) and you can begin to see the challenges a car maker has.
But there's more. Let's talk about the powertrain, The easy (and cheap) way to make power is to have a large engine. It doesn't take much engineering or design talent to get decent hp out of a large displacement engine. But in a small car, a powertrain has to produce enough power but can't be physically large because it won't fit into the allocated space. Without the luxury of size, it takes engineering acumen to produce sufficient power and also maintain good fuel economy. Also it is more challenging to produce lower exhaust emissions from a higher tuned engine.
Everyone likes to have a nicely riding car. Large heavy cars and oversized heavy axles help dampen up and down ride motions. A smaller car doesn't have that luxury either. The small car must rely on well designed, often sophisticated suspension with careful tuning of spring and shock absorber rates to compensate for the loss of the large mass that is useful in damping suspension movement.
Styling also is a challenge because long flowing lines on a car is traditionally what people take as a good looking car. so making a stubby car look pleasing can be a challenge as it goes against the tradition.
As you can see through these brief examples, there is considerable expense coming up with a well thought out small car design, now factor small cars in the USA are traditionally marketed as less expensive and you can see how they are not popular for some car companies. The hard to find talent and the money needed to produce them cause some companies to take short cuts and you can find small cars that are lacking in major areas like space utilization, engine performance, fuel economy, safety and exhaust emissions.
But not all car companies are the same.
One car company that doesn't take shortcuts is Fiat. Fiat is considered as reinventing the small car in 1936 with the Fiat Topolino. Prior to that car, small cars were just big car shrunk down. It's a very inefficient way of designing a small car. The Fiat Topolino was a car designed to be small from the start and not a shrunk down big car. Throughout the years Fiat has set the standard in small car design, winning numerous prestigious European Car of the Year awards. (this award is not like our cheesy car magazine awards, but voted from a panel of highly regarded automotive journalists from all over Europe). In fact Fiat holds the record for wins of this award.
An example is the Fiat 128 from 1969. The car on which nearly all modern front wheel drive cars are based. This revolutionary car offered a full 80% of its space to the occupants. It was smaller than a VW Beetle, but had more legroom than a Cadillac Eldorado.
The New Fiat 500 is a car that demonstrates Fiat expertise in small car engineering where you don't suffer because the car happens to be smaller. It is a complete car. No shortcuts where taken in the New Fiat 500. The design has been carefully crafted by experts. The accommodations are generous, the safety is at the top of it's class. The performance and fuel economy are top notch. It's low exhaust emissions set the standard. How it drives is what sets this car apart from others. Italian consumers demand excellent performance and drivability. From the hottest Ferraris to the smallest scooters. It's an Italian tradition and it's a Fiat expertise. For, although it is small, the New Fiat 500 has a substantial quality and drives with a charisma that comes from a car maker that has a heritage of outstanding automotive design for over 100 years.
In the future we'll explore the history of Fiat and the beginnings of the New Fiat 500.
Wednesday, April 1, 2009
President Obama’s comments in relation to Fiat yesterday represent an important recognition of all the men and women who have worked hard in recent years to restore the strength and credibility of our Group in the eyes of the world.
I believe that the choice of Fiat to help in the relaunch of the U.S. auto industry should be a source of great pride not only for Italian industry but for the entire nation.
For Fiat, recognition that our products, engines and components are at the leading edge of technology, respectful of the environment and highly competitive is an enormous satisfaction. In most major international markets, demand today is for cars with these characteristics, as it will also be in the U.S. market in future.
If an agreement is concluded, as we hope, in the next few weeks, it will present an extraordinary opportunity. Having access to a major network such as Chrysler’s, we will be able to enter the U.S. market with automobiles, which we are sure will be appreciated for their innovative content, style and advanced technology. Despite the difficult period it is currently experiencing, the U.S. market still remains the greatest opportunity and challenge.
Turin, 31 March 2009
Resorce: Fiat Communications