Fiat is purchasing a 35% stake in Chrysler as its private equity owner Cerberus attempts to save the troubled US car manufacturer. The Italians are stepping up to help because they see great potential in Chrysler and believe that the United States car market will rebound. Maybe some of the Italian magic will rub off on Chrysler and help them get back to the coveted position they inhabited for so long.
It’s a win-win situation for both companies. Fiat has been chomping at the bit to expand into U.S. markets more aggressively and Chrysler covets Fiat’s production expertise and high-tech innovative approach. Fiat will direct Chrysler on how to make smaller, greener vehicles and Chrysler will learn how to cut costs in manufacturing. At least that’s the idea. Hopefully in the end, President Obama will also be more receptive to the idea of helping the carmaker out, knowing that they’re now partially owned and partnering with a respected name like Fiat.
The Italians have long been fans of the United States and have given us many great things—including gelato, panini sandwiches, carpaccio and the actress Sophia Loren — not to mention Lamborghini, Ferrari, Alfa Romeo and Lancia – all owned by the aforementioned Fiat, by the way. Fiat is a smart company. This is not a Mother Teresa charity gesture by any means. The Italian carmaker is banking on a Chrysler comeback and it’s all about the money, no doubt.
I know several parts managers at Chrysler dealerships, and they’re ecstatic about the acquisition. “We need some good news right about now,” said an unnamed source. “This is good for the company, but one of the best things is that it will give Chrysler employees a little more faith and confidence. We’ve been around a long time and this is an indication we’re not going anywhere.
Article originally posted in the Wall Street Journal after the jump:
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