By now it should be obvious that Fiat Chrysler Automobiles is for sale.
Not in a desperate do-a-deal-now kind of way. But in a persistent, strategically logical way.
Why? Because CEO Sergio Marchionne says as much, repeatedly. He understands better than most the capital demands of today’s global auto industry -- and FCA’s limited capacity to meet them.
His problem is that would-be buyers — from General Motors CEO Mary Barra to Renault-Nissan’s Carlos Ghosn — are not inclined to cooperate. To that august list can now be added Volkswagen CEO Matthias Mueller.
Mueller followed his “not interested” in FCA at the Geneva auto show with a “we’ll always talk.” That seems to have done little more than whet the appetite of ol’ Sergio.
Marchionne told Reuters he’s “waiting with anticipation. There are 4 or 5 of us (carmakers) at the global level … if something needs to be done, it will be done.”
Maybe. The truth is more complicated.
The recent history of the global auto industry is littered with grand mergers and acquisitions that seldom delivered the so-called “synergies” they promised. Ford Motor’s luxury-brand spree of Jaguar and Land Rover, Volvo and Aston Martin, proved a big fat distraction that needed to be jettisoned when times got tough.
Daimler-Chrysler’s highly touted “Merger of Equals” turned out to be neither. It failed. The Germans buried deep inside Mercedes-Benz had no intention of tarnishing their gleaming three-pointed star with the likes of Chrysler, Dodge and Jeep. And they seldom missed a chance to say so.
General Motors spent much of the past decade dumping brands foreign and domestic it could not afford, could not leverage, or both. Names like Oldsmobile, Pontiac, Saturn, Saab and Hummer are relegated automotive history. Subaru, a one-time partner, is independent. And GM’s Opel and Vauxhall brands in Europe soon will be owned by the French.
Only Carlos Ghosn’s Renault-Nissan experiment has withstood the test of time. Credit the CEO’s charisma and the industrial logic 18 years ago of marrying Renault to Nissan.
No, the players who stick to the core brands, execute and watch the industry round-robin from the sidelines are the ones who’ve done best over the past generation. It’s no accident you don’t hear the names Toyota, Honda and BMW when people start talking about deal-making. They generally don’t play.
Executing the theory behind a deal is far harder than conceiving it. Just ask old Chrysler hands. They lived the Daimler-Chrysler mendacity. They lived its peddling to the New York sharpies from Cerberus Capital Management. They lived the collapse into bankruptcy and Chrysler’s rescue by the feds and Marchionne.
Creating and holding value has proven more difficult than architects of those deals probably ever imagined. Those lessons are not lost in the c-suites occupied by the likes of Barra and Ghosn, VW’s Mueller and Ford CEO Mark Fields.
If you’re looking for reasons the industry brass isn’t keen to buy what Marchionne keeps trying to sell, look at the past 20 years of auto history. That would be a decent place to start.
Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.
