Fiat, Chrysler Union Not a Promising Marriage

Both company's are long on creativity, but short on needed cash.

Published: 21-Jan-2009

The last time Chrysler and Fiat talked about some kind of engagement, GM Vice Chairman Bob Lutz—then Chrysler’s President—called the Italian carmaker “a bride…lying on her deathbed.” Well, there is talk of a marriage between the two again, almost 20 years later. Reports say Fiat and Chrysler may cut deals for joint product development with Fiat taking a stake in the Detroit carmaker.

Fiat isn’t quite as bad as it was in the early ‘90s. Improvements in quality and productivity led by CEO Sergio Marchionne have made it into a decent carmaker. But a savior for Chrysler? No. What Chrysler needs is a parent company with technological prowess and a lot of cash. Renault-Nissan comes to mind. Fiat has neither, really. It does have a good set of diesel engines. That was what General Motors wanted when it took 20% interest back in 2001. But Fiat isn’t exactly fighting it out with Toyota for hybrid and electric drive technology. And cash? Not enough to save Chrysler.

At the Detroit auto show, Chrysler CFO Ron Kolka said the company had between $2 billion and $2.5 billion. That’s the bare minimum Chrysler needs to meet payroll, buy parts and keep the plants going. Fiat has excess capacity in Europe and will need cash to fix some of its own problems.


The company is working with a number of vehicle manufacturers on the development of batteries for hybrid and electric vehicles and expects more announcements like this one to come.

With seating up of four people who use all the large muscle groups, the car can easily cruise at speeds of up to 20 mph.

ZAP is hoping to keep the MSRP at $30,000 for the Alias three-wheeler pictured here.


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