Tuesday, January 20, 2009


It looks like Fiat is on the way to owning a large piece of Chrysler.

Sergio Marchionne, Fiat's CEO, has resurrected Fiat from the dead since 2004. He has overseen the development of exciting new Fiat and Alfa Romeo models and the improvement of quality. Serio has also initiated targeted joint ventures with Tata and Ford. Perhaps most ironically, he was able to extract a $2 billion payment from GM to get out of GM's commitment to put more money into Fiat.

This could be the entry into the US market that Fiat has been looking for over the past two years. They are eager to introduce their reincarnation of the Cinquecento- the 500- and to start to selling their remodeled Alfa Romeo's.

A couple of years ago, I was in Italy and I thought the new Alfa's were great looking. I think that the introduction of the new Alfa's in dealerships up and down the east and west coasts is a great idea. If they provide good lease terms and scheduled maintenance, I think these stylish cars will sell well to car buffs who like Italian styling. These leases could protect a buyer's downside of buying cars which didn't have a reliable reputation when they were last sold in the US 20 years ago.

Here are some current Alfa models:

One minor insignificant point though, Chrysler is in the midst of a massive restructuring of its capital structure, union contracts and ownership. This has to be accomplished by securing agreements with vendors, suppliers, bondholders, bank lenders, mortgage holders, Chrysler Finance, the unions, current employees, retirees, dealers, the Federal Government, Cerberus, Daimler Benz and the rest of its stakeholders.

How hard can that be?

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