(American World Driving Champion Phil Hill piloting his Ferrari GP car in the 1961 Belgian Grand Prix; Fiat owns Ferrari, as well as Alfa Romeo, Lancia and Maserati).
On the same day our new 47-year old president took his oath and spoke of "renewing America" and re-establishing our leadership in the world, the 84-year old Chrysler Corporation, once an American icon of engineering and manufacturing, announced the second off-shoring of the company, this time in a "global strategic alliance" with Italy's gigantic and quasi-governmental carmaker Fiat.
What's the deal worth? Nothing; Fiat isn't paying a single lira or penny for their chunk of Chrysler; it's a deal they couldn't refuse (but which still must be approved by the US government).
(This Ferrari California, as seen at the 2008 Paris Auto Show, has a push-button hardtop convertible; Ferrari is owned by Fiat).
Fiat, founded in 1899 in Turin, is Italy's largest manufacturing group and owns and makes its eponymous cars as well as the Alfa Romeo, Lancia, Ferrari and Maserati brands, and has interests in other carmakers and auto parts suppliers. As mentioned, Fiat is a quasi-governmental organization, which means the Italian government always stands ready to back-up their "automotive division."
In fact, the former head of the Ferrari Formula One team and top executive of Fiat, Luca de Montezemolo, is expected to someday be named Prime Minister of Italy (seems they name a new one every year or so). I've had the great pleasure of dining with Montezemolo a few times, and in his $5,000 Italian suits and a beautiful woman on each arm, he is the very epitome of the chief executive of a European high-performance carmaker. Enzo Ferrari himself would be proud.
(Luca de Montezemolo with Ferrari's 7-time World Champion of Driving Michael Schumacher, the world's highest-paid athlete; unlike Jerry Seinfeld, who is a knowledgeable Porsche fanatic, Montezemolo apparently doesn't mind wearing a "puffy shirt").
Fiat's hope is to eventually sell their brands in the US and Canada; the company had been in the US for decades, but ongoing and well-known poor quality plus the many millions Fiat would have had to spend to meet new US emissions requirements, saw the company finally pack-up and leave in 1984 ("that great Italian car quality" wasn't a common phrase in the US then).
The deal, the companies say, provides Chrysler access to "competitive, fuel-efficient vehicle platforms, powertrain and components," while Fiat will receive a distribution network in "key growth markets" as well as "substantial cost savings opportunities." If anyone knows any "key growth markets" in the car world, please let me know.
Chrysler's first gift to Fiat is allowing them to be in charge of submitting the company's viability plan to the US Treasury by March 31.
If the company makes and sells their super-popular Cinquecento, the "500," which was born decades back as the Italian version of the Mini-Cooper, the company could enjoy some success here.
(Fiat executives Luca deMeo (l) and Sergio Marchionne introduce the 2010 "500").
A year from now, Fiat will have the choice to take another 20% of Chrysler, giving the Italian company majority ownership.
Germany's Daimler purchased Chrysler in 1998 for $36 billion, and the companies, but what was first called a "merger" turned-out to be a Daimler takeover (many lawsuits will run through the world's courts for years).
Chrysler ended up gutted, and Cerberus Capital, a Wall Street finance outfit, bought 80% of Chrysler from Daimler for just $5 billion in 2007, taking advantage of the incredibly quick loss in Chrysler's value. Many of us thought at the time, "Well, Cerberus obviously knows nothing about cars, but at least they are based in America." Within a short time, though, the former head of Home Depot, who had been fired by his own board of directors from that job when the company's stock tanked, Bob Nardelli, was hired to run Chrysler. Great move, that. Did I mention former-VP Dan Quayle is on Cerberus' board of directors? Apparently they send him around the world to glad-hand potential clients. Quite a line-up they have there.
So Chrysler is, again, majority-owned by overseas corporations (Fiat has 35%; Daimler still has 20% of Chrysler, which they've been trying to off without success).
Chrysler has quite a history in Europe, beginning in the 1960s, when sports cars were very popular and awareness of Grand Prix racing (now known as Formula 1) was first growing in the US.
Chrysler figured going to Europe would be cool, so bought majority interests in the British Rootes Group, Simca of France and Barreiros of Spain, all in 1964, to form Chrysler Europe.
Just a decade later, never having achieved the positive results they expected, Chrysler sold-off all their European holdings.
During the Lee Iacocca years in the late '70s and into the 1980s, and after the company had paid back their federal loan guarantees early, and with interest, Chrysler was a very successful US company.
This was due more to Iacocca's TV ads, best-selling books, powerful personality and marketing prowess than Chrysler's actual products; he brought his friend from his years at Ford, race driver and marketer Carroll Shelby, into Chrysler to make some limited edition Dodge cars, and the Shelby name helped sell a goodly number of jazzed-up small autos. 
(Lee Iacocca (l) and Carroll Shelby enjoyed success at both Ford and Chrysler; they are both as they appear here, garrulous, enthusiastic guys).
And another, newer Chrysler car demonstrates the company's on-going problems in Europe.
When he was at Ford, Italian-American Iacocca had started a friendship with the late (all-Italian) Alejandro de Tomaso, which led to the De Tomaso Pantera model, a sort-of Ford GT for the street, with all the cost, drama, problems and idiosyncrasies of a race car.
Fired from Ford just before becoming chairman (Henry Ford II would never allow an "immigrant Catholic" like Iacocca to run the family company) and now running Chrysler, Iacocca and de Tomaso hooked-up again.
(While at Ford, Lee Iacocca and Alejandro de Tomaso developed the still-valuable and -popular Pantera; a de Tomaso sports car with Ford running gear and engine).
Out of that came the "Chrysler TC by Maserati," a Chrysler K-car platform turned into a supposed-Grand Touring car by the two companies.
The front-wheel drive piece was introduced at the Los Angeles Auto Show in 1986; I was there and remember it well. A lot of us laughed at the car; we weren't wrong.
The car's first serious problem was that it wasn't available until late 1989. The TC (Touring Coupe) was intended as a showroom halo car for Chrysler; used to pull in customers off the street. Only 7,300 TCs had been made (very expensively and by hand in Milan; similar to what Cadillac did with their ill-fated Allante) when it was canceled in 1991. And its price ranged from $33,000 to $37,000 during the few years it was available.
(Chrysler's TC Maserati was an engineering and sales disaster).
The TC was ugly, with a porthole rear-window which looked ripped from a 1957 Thunderbird, ran terribly, handled worse and the cars were quickly worth nothing; people who owned them couldn't give them away. The car is one of the industry's all-time automotive jokes.
De Tomaso owned the Maserati brand when the TC was made; today, the company which owns Maserati, Fiat, owns much of Chrysler, too.
Comments