Thoughts on this industry rumor?

SomeGuyInTexas · Jun 10, 2015

Not sure if this belongs in General Discussions or in the Lounge - mods please move if I picked the wrong spot.

Yesterday there was a lot of rumor in the Financial news sectors of Fiat-Chrysler's CEO going to the General Motors executive team about a merger of the two, which the GM CEO acknowledged had occurred but the GM board dismissed. Now here's today's news rumor/conversation - SAIC Motor May Be Fiat Chrysler Buyer (NYSE: FCAU) - 24/7 Wall St.

I'm not sure which one would be worse. I deal very heavily with Chinese companies in the electrical design world. They are not bad people, and can deliver quality work - provided you manage everything very closely. The shaving of costs is a CONSTANT activity, and you can never keep your eye off of that fact. A merger w/a Chinese company with no other "obvious" product line overlap would provide Fiat-Chrysler with a new market (potentially), but I can very much see parts for their other markets being predominately manufactured in China with lots of cost reductions and quality concerns arising.

A merger with GM - well, the thought made me throw up in my mouth a little.

Sir John · Jun 10, 2015

For as long as I have a choice, I would never buy a Chinese made car. My father-in-law has been living in China for the last 10 years (about 9 months per year) to start up a factory for his employer. The crap I've heard in those 10 years makes me wonder how everything in China just doesn't fall apart. The builders of the Great Wall of China would be so disappointed.

NorthTexasHemi · Jun 10, 2015

I believe that Fiat wants to get a better footing in the Chinese market. Volvo is now Chinese owned (Zhejiang Geely Holding Group). SAIC appears to have recently opened an office in Michigan and was greeted by GM. You never know man. The whole auto industry is a mish mash of global conglomerates. Personally I just get a kick out of parking next to a Fiat 500 and saying hello little brother to the owner lol. They freak out a little hahah

SomeGuyInTexas · Jun 10, 2015

Sir John said:
For as long as I have a choice, I would never buy a Chinese made car. My father-in-law has been living in China for the last 10 years (about 9 months per year) to start up a factory for his employer. The crap I've heard in those 10 years makes me wonder how everything in China just doesn't fall apart. The builders of the Great Wall of China would be so disappointed.

Yeah, definitely issues over there, especially with the incredibly fast building projects. I have seen MUCH scarier construction in India though.

NorthTexasHemi said:
I believe that Fiat wants to get a better footing in the Chinese market. Volvo is now Chinese owned (Zhejiang Geely Holding Group). SAIC appears to have recently opened an office in Michigan and was greeted by GM. You never know man. The whole auto industry is a mish mash of global conglomerates. Personally I just get a kick out of parking next to a Fiat 500 and saying hello little brother to the owner lol. They freak out a little hahah

Heh, here in the Austin area there are lots of opportunities for parking a Ram next to one of the F500s, along with the little Smart car thingies. The weird thing with the Fiat CEO is how aggressive he is being with the thought of merging... Going from GM to SAIC that fast just sounds like a C-suite jive turkey looking for a big payout.

Garce421 · Jun 11, 2015

I wonder what it will mean as far as parts manufacturing and the brands as a whole. How much would change? Will they stay the same? New models? Crazy

NorthTexasHemi · Jun 11, 2015

I think a GM/FCA merger would not happen, regulators would most likely have a tizzy fit about that. Well unless they are upset Ford stayed out the gov't bailouts and now want to stick it to them (highly unlikely) If they merge it would have to be a small player in the US market with operations in the EU and China. My guess, Geely. FCA gets their foot into China with a company with operations in EU (Volvo). Volvo has already produced a car that will probably only be sold to China. They removed the front passenger seat and gave the space to the rear passenger. That is designed solely for the congested streets of Bejing without needing to drive around in a huge Limo.

Volvo's Lounge Console Is the Ultimate in Chauffeured Pampering

charonblk07 · Jun 11, 2015

SomeGuyInTexas said:
Not sure if this belongs in General Discussions or in the Lounge - mods please move if I picked the wrong spot.

Yesterday there was a lot of rumor in the Financial news sectors of Fiat-Chrysler's CEO going to the General Motors executive team about a merger of the two, which the GM CEO acknowledged had occurred but the GM board dismissed. Now here's today's news rumor/conversation - SAIC Motor May Be Fiat Chrysler Buyer (NYSE: FCAU) - 24/7 Wall St.

I'm not sure which one would be worse. I deal very heavily with Chinese companies in the electrical design world. They are not bad people, and can deliver quality work - provided you manage everything very closely. The shaving of costs is a CONSTANT activity, and you can never keep your eye off of that fact. A merger w/a Chinese company with no other "obvious" product line overlap would provide Fiat-Chrysler with a new market (potentially), but I can very much see parts for their other markets being predominately manufactured in China with lots of cost reductions and quality concerns arising.

A merger with GM - well, the thought made me throw up in my mouth a little.

FIAT is looking for a partner and has been looking for a while, they have said they're not looking to divest their holdings, they just don't want to have everything riding on them. Partnering with a Chinese company will free up a lot of capital as well as increase their market into China which is the largest growing automotive market in the world.

Sir John said:
For as long as I have a choice, I would never buy a Chinese made car. My father-in-law has been living in China for the last 10 years (about 9 months per year) to start up a factory for his employer. The crap I've heard in those 10 years makes me wonder how everything in China just doesn't fall apart. The builders of the Great Wall of China would be so disappointed.

And as for the builders of the Great Wall:

clh1220 · Jun 11, 2015

I think they made ram its own brand so they could sell it off.

Upthewazzu · Jun 11, 2015

Would hate to see FCA merge with GM. Would probably have to sell the Ram.

rduchateau2954 · Jun 11, 2015

Let's hope this doesn't happen. I've talked too much smack to drive a Ford.

CherryRed · Jun 11, 2015

This article over on AllPar suggests a rumor of FCA attempting a hostile takeover of GM :buffer:

FCA to Attempt Hostile Takeover of GM? • Allpar News

Garce421 · Jun 11, 2015

It sounds more like FCA will be sold off to a company in the Far East instead of GM. I wouldn't mind if GM and FCA merged in more scared of a company from outside the U.S. With little U.S. Auto experience or who's focus is not with Ram.

smurfs_of_war · Jun 12, 2015

With the splitting off of the brands over the last few years (Ram, Jeep) it may be that the "Dodge/ Chrysler" brand is going its own way (I think most of us figured that out already) but Ram and Jeep are solid enough on their own two feet. It honestly wouldn't surprise me to see Ram and Jeep make a "brand" of themselves totally apart from Mama Fiat- even more than they already have.

TruckNut · Jun 12, 2015

smurfs_of_war said:
With the splitting off of the brands over the last few years (Ram, Jeep) it may be that the "Dodge/ Chrysler" brand is going its own way (I think most of us figured that out already) but Ram and Jeep are solid enough on their own two feet. It honestly wouldn't surprise me to see Ram and Jeep make a "brand" of themselves totally apart from Mama Fiat- even more than they already have.

Boy I hope you are right!

Sir John · Jun 12, 2015

charonblk07 said:
And as for the builders of the Great Wall:

Lol....the Great Wall of China was built by soldiers, convicts and commoners.....not slaves.

Thoughts on this industry rumor?

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