Into the Dustbin of Nameplates Forgotten

"Groagun" (groagun) 07/17/2015 at 18:54 • Filed to: None

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Sergio Marchionne, the ‘sweater man’ looks so concerned these days. He should be and not for the reasons you may be thinking. Not because Chrysler/FCA may not see the light of the next decade but because he promised “X” and he is going to deliver “Y”.

If you do a serch on Jalopnik with ‘Sergio Marchionne’ as the subject you will get on the first page, as of July 17th 2015, 20 stories and 13 of them are the “Morning Shift” posts. That means on a daily basis for the past month or so, Marchionne has been in the news saying something everday that is news worthy.

That’s a lot of press and most of it’s been about attempted mergers. A short recap for the uninitiated: Sergio’s big 5 year plan had many holes in it, it promised billions in profit and efficiencies no one else had obtained, China would figure prominently and the world would bask in the glory that is Sergio.

So, much if not all of that is off to a rocky start to say the least and Jeep and Ram are the only things keeping them above water. Ferrari is about to become independant and Marchionne is looking a bit feeble when it comes to his traveling road show trying to court merger partners.

Then I saw this !!!error: Indecipherable SUB-paragraph formatting!!! I wrote an earlier piece using almost the same link, this one is just updated, that outlined that I think Mercedes Benz has way too many models and it will mean trouble for them down the road.

Today I thought this: “look at all of the choices, just in new and updated models, this does not include existing and carry over models. Would it really matter if FCA went under?”

I think Sergio is worried that he wont make his targets, and doesn’t care one way or the other if FCA sinks or swims. Yes that is at odds on the surface and absolutely means if Chrysler/FCA fails he wont make his targets. But he’s not worried about Chrysler/FCA, he’s worried about his reputation.

I understand and believe in his argument, in part, for a merger. I have to ask though, with all of the choice available to us around the world, would it really make any difference if Chrysler/FCA was no more? What guarantee or right does any company have to survive for any period of time?

I think most mergers make no sense to anyone but the executives and shareholders. For the rest of us it just means less competition and choice. If you play out the merger senario to it’s logical conclusion, you end up with 3 or 4 car companies producing the same car with different badges on the hood, that’s it.

Yes it’s more expensive and time consuming but the advancements and choice is what we are after. If a market gets too over crowed with choice, as I think we may have now, it means some will not survive, that is how it’s supposed to be. Why should Chrysler/FCA be or be treated any differently?

If they disappeared off the face of the Earth right now, we would be sad, people would need to find new work but life would go on and consumers would find another car/truck to put into their garages.

His plan is stupid, was born of arrogance, miscalculated at every step and may be the end of the company as we know it: it certainly isn’t the first time Chrysler/FCA was on the brink.

djmt1 > Groagun 07/17/2015 at 19:02

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Found out the other day that FCA is based in London. Considering Chrysler and Fiat’s reputation here in the UK, this is very odd.

Brian, The Life of > Groagun 07/17/2015 at 19:24

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Ferrari’s days will be numbered if they are not sold to another larger automaker. They need to
“spread the wealth” on engineering costs to be viable going forward.

Groagun > djmt1 07/17/2015 at 19:51

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It was done for tax purposes. Keep in mind that Chrysler is the second fidle here and Fiat is the head.

Groagun > Brian, The Life of 07/17/2015 at 19:54

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If this was being argued 20 years a go I would agree. Today however I’m sure they will be fine. It seems Ferrari can sell anything at any price and people line up to give them their money. The worst for you and I will be the entry level Ferrari will go from around $250K to $350K.

Brian, The Life of > Groagun 07/17/2015 at 20:07

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... and then sales will fall through the floor on the entry level Ferrari. Even if they don’t, I can’t imagine they have the kind of margins needed to stand alone.

Groagun > Brian, The Life of 07/17/2015 at 21:13

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You may be totally right but it seems that margins are detrmined by what the buying public is willing to pay and what the competition is setting. It seems as though there is no limit to what people are willing to pay and there is an argument to be made that Ferrari has no competition.

Brian, The Life of > Groagun 07/18/2015 at 02:40

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Ford has a flat-plane crank V8 and carbon fiber wheels on a $62k car. We don't know how it might measure up against a 458 yet but the very idea that wanting to find out isn't completely preposterous tells me that Ferrari would have a really hard time going it alone.

Declan Hackett > Groagun 07/21/2015 at 21:46

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No, the worst will be that Ferrari will now have to comply themselves with EU rules on average CO2 emissions, instead of counting on lots of Fiat 500s to balance the books!

Hence why the F1 team are not joining the frenzy to scrap hybrid powertrains, and why management have already leaked that the 458’s replacement will be turbocharged (and almost certainly hybrid)…

Of course, they could just slash production to below 1,000 units p.a. to avoid regulation and septuple prices to keep up the profits!

Groagun > Declan Hackett 07/21/2015 at 21:57

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Yes the 488GTB has gone turbo and reduced emissions and the next F12 will almost certainly use hybrid power, as will the replacement for the FF. The California was the first to reduce capacity and go turbo. I talked about this in one of my very first posts where I slagged Luca di Montezemolo for BSing us about future Ferrari plans and talking shit about hybrid power when he knew full well they would be going in that direction.

Keep in mind that if Ferrari does not meet CAFE standards they get fined a certain amount per vehicle but they will just pass along those costs to you and I. Only when we and the rest of the buying public say ‘enough’ will Ferrari be forced to really do something.

Perhaps a better example is Aston Martin.