Sergio Marchionne: “The landscape in Europe is abysmally poor”

Sergio Marchionne: “The landscape in Europe is abysmally poor”

Fiat CEO Sergio Marchionne (pronounced Mar-key-OWN-ee) is also the CEO of Chrysler Group, which includes Chrysler, Dodge, Ram, Mopar and Jeep. Currently ownership of the Chrysler Group is: Fiat S.p.A. 58.5 percent, VEBA 41.5 percent. On July 3, 2012, Fiat announced that it intends to exercise a call option to acquire an additional 3.3 percent of Chrysler from VEBA. As of the time of this interview, that acquisition has not occurred as of yet.
Why not just buy Opel and put it out of it’s misery?

When asked why Fiat didn’t just buy Opel and put General Motors out of their misery Marchionne gave us some valuable insight. Marchionne had offered to buy Opel back in 2008/2009, and been denied. Marchionne said that had he been able to buy Opel’s marketshare and combine it with Fiat’s marketshare the two, together, would have been equivalent to Volkswagen’s marketshare in sheer volume.
At the beginning of the year, 2012, rumors were swirling that Fiat was in talks with Peugeot Citroen (PSA) to buy them. Marchionne admitted that he had been in talks with Peugeot Citroen to buy their marketshare, at the same time he was talking to Opel. Both companies rebuffed the offers, but if you listen carefully you will hear Marchionne say the French told him no and the old General Motors told him no. Was it the French pride that didn’t want Italy’s Fiat to own them, or Peugeot Citroen, the French car company?
As the chairman of ACEA, the European automakers’ lobby group, Marchionne had called for consolidation of the European automobile industry and a contraction in production capacity across the board. That didn’t happen either
Reuters reported that Volkswagen wants Marchionne to step down as chairman of ACEA. Apparently, Marchionne is upset because, Marchionne says, Volkswagen has been aggressive with it’s incentives during the European economic downturn. The word incentives (to me) implies Volkswagen is taking money off the Manufacture Suggested Retail Price (MSRP), but still making a profit. In this video Marchionne is suspect about the margin of profit being made.
Reuters reported that Volkswagen has threatened to leave the ACEA if Marchionne doesnt step down.

In a subsequent scrum after lunch Marchionne talked about Fiat’s relationship with Volkswagen, “we have, what I consider, to be a healthy competitive rivalry. They (Volkswagen) are much bigger than we (Fiat) are. We’re small guys in Europe.”

About the Author:

Lou Ann Hammond is the CEO of Carlist and Driving the Nation. She is the co-host of Real Wheels Washington Post carchat every Friday morning and is the Automotive, energy correspondent for The John Batchelor Show and a Contributor to Automotive Electronics magazine headquartered in Korea. Hammond is a member of the North American Car and Truck of the Year (NACTOY), Women's World Car of the Year (WWCOTY), and the Concept Car of the Year.