U.S. sale gives Fiat control of Chrysler
Tess Vigeland: Congratulations, Uncle Sam, you just sold a car company! Kind of. President Obama visited a Chrysler factory in Ohio today — fresh off the Treasury Department’s deal to sell its remaining 6 percent stake in the car company to Italy’s Fiat. Washington assumed the stake in Chrysler two years ago. As part of that bailout, Fiat agreed to take on management and a minority stake. With this sale, Fiat will own 52 percent of Chrysler. Of course, this isn’t Chrysler’s first international marriage. It used to be owned by German carmaker Daimler — and that was one rocky relationship.
Marketplace’s Stacey Vanek-Smith looks at whether a partnership with Fiat will be any more nurturing.
Stacey Vanek-Smith: Long distance relationships can be challenging, and in the auto industry nearly fatal. Daimler bought Chrysler in 1998, and sloughed it off nine years later — bleeding money and in need of a major reorganization.
Jeremy Anwyl is the CEO of Edmunds.com.
Jeremy Anwyl: One of the cultural problems was that the Mercedes folks were always worried about diluting the prestige or damaging the Mercedes brand by using some of the Mercedes technologies too overtly in Chrysler, Dodge or Jeep vehicles.
But the Fiat marriage could last, says Anwyl. Fiat is using Chrysler’s dealer to sell its models. And their products complement each other.
Anwyl: Chrysler has got a lot of product strength in traditional American vehicles — pick-up trucks, minivans. Fiat has a lot more strength in the smaller cars and these are becoming very, very important today in an era of higher gas prices.
The union with Fiat is also making Chrysler more attractive for investment says Robert Schultz, managing director of Corporate Ratings at Standard & Poor’s.
Robert Schultz: It’s very early days, but Chrysler’s business profile, we think, is enhanced by having the Fiat ownership.
Edmunds.com’s Anwyl says it’s a time of shifting gears in the auto industry. Customers are becoming less interested in horse power and more interested in electronic perks and fuel efficiency. Anwyl says Fiat and Chrysler are well positioned to be nimble in that evolving climate.
In New York, I’m Stacey Vanek-Smith for Marketplace.
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