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New Fiat Designed Chrysler Products May Be Available In About 18 Months

With the Chrysler bankruptcy and reorganization taking place at break-neck pace in a federal courtroom, new Fiat designed Chrysler products might be available to public in as little as 18 months. Under the terms being worked out, the UAW workers union will get a 55% share in ownership of the company, the federal government 8%, and governments in Canada and Ontario both will get 2% ownership shares. Fiat will get a 20% share in the company, but that might eventually rise to a total 41% share if the government get paid back for their bailout funds.fiat500.jpg

Fiat has always had very serious marketing difficulties in North America, so this new bid to become part owner of Chrysler and revamp their car line with more fuel efficient models, will also give Fiat an opportunity to market their imported cars that do very well in Europe in sales. It will give both Chrysler a second chance to succeed as well as Fiat a second chance to improve their U.S. marketing.

Just like the mid70's when Chrysler marketed too many larger cars that got poor fuel mileage and their sales suffered and the company nearly went under for the first time requiring a government bailout, this latest crisis for Chrysler came from marketing too many larger cars, SUVs and trucks with poor mileage just when gas prices spiked a few months ago as well as the recession taking a huge bite out of Chrysler sales. During both of these crisis moments for Chrysler, the company was totally unprepared for the current market conditions, and had the wrong sorts of vehicles to market in a market hostile to larger vehicles with poor mileage.

The tiny Fiat 500 could be one of the first Fiat models to be sold in the U.S. once problems with safety and air pollution emissions are solved for the American market. The model is even smaller than the very popular BMW designed Mini Cooper cars sold here. And America seems to have a love affair for retro-styled cars, of which this latest 500 model is a new version of a longtime classic model once sold by Fiat.


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Comments (9)

drlava:


If they would put LiO batteries in it with a 150 mile range, a USB port in the stereo and sell it for 12 grand I'd buy one.

FIAT = "Fix It Again Tony", except this time Tony is a UAW thug who will fire shots through your living room window, smash your windshield with a baseball bat, or pour aluminum roofing nails in your front yard and on your driveway if you question why you have been ordered to surrender your Chrysler 300 and replace it with a FIAT 500.

Seriously though ... I can't think of a bigger case of "be careful what you wish for" than the UAW having a 55% ownership of Chrysler. How long will it take for Chrysler employees to strike against their own union? What happens if Americans don't buy Chrysler/FIAT 500's?

Truth is, Chrysler's PT Cruiser, Dodge Caravan, Chrysler Pacifica, and Chrysler 300 sedan have all been enormously popular. I see far more of these cars on the road than I see Mini Coopers. Any American car company that decides to eliminate family-sized "kid-haulers" from their inventory is going to be in for a very rude suprise.

Allen:

Ref #2. I have to wonder why you call a UAW person a "thug," I do agree with your last paragraph. But one question that has never been answered is why Ford won't sell it's 65+MPG auto here in the states? Argue all you want, but the technology for better gas mileage has been around for years. The VW rabbit got over 50 MPG, and they disappeared from the states?

Did big oil have a hand in that?

Doubting Thomas:

I had a Fiat in the late '70s - a 128 station Wagon. It worked, kind of. Ate clutch cables like spagetti. I kept a couple of spares in the car, and got to the point where I could change one in about ten minutes.

I wouldn't buy a Fiat again, unless there was no other option. Even with a Chrysler nameplate...

Paul Hooson:

Hello Doubting Thomas and others. Certainly that reputation of Fiat as a quality challenged brand has hurt their U.S. sales. Both Fiat and Renault are two large foreign automakers who have had serious marketing problems selling their cars in the U.S. as well. Renault made several attempts to sell their cars, the last being their ill-fated mission to rescue the ailing American Motors Corporation by buying a 49% share in the company. Eventually the financial losses were just too huge, and Chrysler was able to buy what was left of the AMC assets mainly to get their Jeep line. For a very short time, Chrysler attempted to sell the Eagle line of cars which the Renault designed products, but poor sales as well as some quality control problems doomed this car line within a very short time span.

Fiat is also making an attempt to purchase GM's European divisions which include the UK's Vauxhall, Germany's Opel as well as Saab. With these purchases, as well as buying into Chrysler, Fiat is hoping to witness annual sales that top over $100 billion a year. While many companies are pulling back with this severe global recession, Fiat is making a very bold effort to become one of the largest auto brands in the world. This stands in contrast to some Italian brands such as Italjet, a motorcycle and motorscooter maker which actually went out business recently, selling the corporate assets to an Indian company.

Doubting Thomas:

Well, we'll see about Fiat.

But if they partner with Lucas as a supplier - I wouldn't give 'em a chance. They'd be likely to spontaneously combust in your driveway. (Lucas is LEGENDARY for the quality of goods it puts out...)

Paul Hooson:

Hello Doubting Thomas. I also think that it's not an encouraging sign that many Fiat products might require extensive redesigns of some components to pass U.S. safety or pollution rules. Some European states have fairly strict air pollution rules, and the idea that some Fiat products come up a little short there should be a slight concern. This is a large reason that it may take up to 18 months to actually see any real Fiat products show at Chrysler dealers. But my best guess is that probably Chrysler is headed on the way out, where just the Jeep division is likely to be sold and survive. I look at the ill-fated attempt by Renault to rescue AMC as case exhibit one here.

Certainly, Fiat can easily solve safety or pollution problems. But turning around American car buyers minds to buy Fiat products will be a bigger order by far. But then again look at South Korea's Hyundai. There was a brand with a terrible quality reputation in the late 80's, that now is greatly improved as well as accepted by many U.S. buyers, so stranger things have happened. Fiat might just surprise us all here.

Tim:

Sad that GM is taking Opel down the drain with it. Back in the '80s, it seemed like Opels were very solid, reliable cars. I had a Rekord with the most God-awful paint job in history. Seriously, it was day-glo lime green, with lighter aand darker patches. Whoever did it must have used a spray can. The car ran great, though.

Allen, "union thug" is a bit of a throwback to my childhood days growing up in a very blue-collar union town. If desperate workers ever crossed a picket line, or failed to fall in line with the union bosses, they were often subjected to many different kinds of late-night vandalsim - broken windows, slashed tires, and yes, the roofing nails. They always used aluminum nails too, because you can't pick those out of your yard with a magnet. And they make dangerous projectiles if you hit them with a lawn mower.


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Publisher: Kevin Aylward

Editors: Lee Ward, Larkin, Paul S Hooson, and Steve Crickmore

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