Saturday, May 9, 2009


Many people seem not to realize that the industrial cities of Northern Italy were center points of the development of the automobile from its beginnings. Now with FIAT making a move to become one of the very top auto producers in the world, we should at least take a look here. Even if you're like me, and believe that foreign interests should not be able to own anything in America, you may want to look into the very interesting history of FIAT and other auto makers in Northern Italy. There's a good amount more of history and information on the Wiki page, and YouTube has many videos on FIAT.

FIAT (from description on its Wikipedia webpage):

"Fiat S.p.A., an acronym for Fabbrica Italiana Automobili Torino (English: Italian Automobile Factory of Turin), is an Italian automobile manufacturer, engine manufacturer, financial and industrial group based in Turin in the Piedmont region. Founded in 1899 by a group of investors including Giovanni Agnelli. Fiat has also manufactured tanks and aircraft.

[Left: FIAT 1899 Model]

"Fiat based cars are constructed all around the world—the largest concern outside Italy is in Brazil (best seller). It also has factories in Argentina and Poland. Fiat has a long history of licensing its products to other countries regardless of local political or cultural persuasion. Joint venture operations are found in France, Turkey, Egypt (with the state owned Nasr car company), South Africa, India, and China.

"Agnelli's grandson Gianni Agnelli was Fiat chairman from 1966 until his death on 24 January 2003. However, from 1996, he only served as an "honorary" chairman, while the chairman was Cesare Romiti. After their removal, Paolo Fresco served as chairman and Paolo Cantarella as CEO. Umberto Agnelli then took over as chairman from 2002 to 2004. After Umberto Agnelli's death on 28 May 2004, Luca Cordero di Montezemolo was named chairman, but Agnelli heir John Elkann became vice chairman at age 28 and other family members are on the board. At this point, CEO Giuseppe Morchio immediately offered his resignation. Sergio Marchionne was named to replace him on 1 June 2004."

Fiat eyes new company with GM Europe, Chrysler (Yahoo News 5-3-09)

By Nicole Winfield, Associated Press Writer

ROME – Fiat Group SpA confirmed Sunday it was in talks to acquire General Motor's European operations with the aim of possibly creating a new company to also include its newly acquired Chrysler automaker.

Combined, the new automaker would have euro80 billion ($105 billion) in annual revenues, Fiat said in a statement.

Fiat said it was evaluating the possible spinoff of its auto business to form the core of the new company. Fiat Group Automobiles includes the Fiat, Alfa Romeo and Ferrari brands.

The statement was issued on the eve of a meeting in Berlin between Fiat Group CEO Sergio Marchionne and the German economy and foreign ministers to discuss Fiat's offer for GM's German unit, Opel.

GM Europe also includes the British company Vauxhall and the Swedish carmaker Saab.

GM has been trying to find investors for its noncore and unprofitable assets as part of a restructuring in which it has sought billions of dollars in aid from the U.S. government to avert collapse.

Opel has said it needs euro3.3 billion ($4.3 billion) to get through the economic crisis. The German government has said it doesn't foresee giving direct state aid. Chancellor Angela Merkel has suggested the government could help an Opel investor with loan guarantees.

Fiat said that over the next few weeks, Marchionne will be looking "to assess the viability of a merger of the activities of Fiat Group Automobiles (including the interest in Chrysler) and General Motors Europe into a new company."

"As part of this process, the group would evaluate several corporate structures, including the potential spinoff of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe."

In an interview Sunday with Corriere della Sera, Fiat Chairman Luca Cordero di Montezemolo called GM's Opel an "ideal partner" and a possible takeover by Fiat an "extraordinary opportunity."

Fiat is not the only suitor for Opel, however. Last week, Canadian car parts maker Magna International Inc. presented German Economy Minister Karl-Theodor zu Guttenberg with what the minister called a "rough concept for a commitment with Opel."

Guttenberg has said the German government would wait to determine its role in any full or partial Opel sale until after the U.S. government had weighed in.

Fiat, meanwhile, has pressed ahead with a takeover of Chrysler, with attorneys for the U.S. auto manufacturer saying the company would file a motion to sell substantially all of its assets to the Italian automaker.

In addition to Fiat Group Automobiles, the Fiat Group also includes its agricultural vehicles branch CNH and its Iveco trucking unit, as well as a media arm.

Associated Press reporter Colleen Barry contributed to this report.

Fiat is out to create automotive powerhouse (Yahoo News 5-4-09)

By Colleen Barry and Tom Krisher, AP Business Writers

MILAN – Fiat is trying to build a global automaking powerhouse out of parts scavenged from broken-down General Motors and Chrysler.

The Italian automaker struck a deal last week that could eventually give it a controlling interest in Chrysler, but its ambitions are bigger than that: Now it is negotiating to buy GM's main European unit, which includes the Opel and Vauxhall brands.

Fiat Group CEO Sergio Marchionne's grand plan is for Fiat to spin off the resulting automaker, which he said would be big enough to compete with the mightiest of car companies, with capacity to turn out some 5.5 million vehicles a year.

Fiat could become the fifth- or sixth-largest automaker in the world if it can complete its deals with Chrysler and GM, said Michael Robinet, vice president of global vehicle forecasts for CSM Worldwide, an industry consulting firm in Northville, Mich.

Currently, Fiat is considered a smaller, regional player, ranking 10th worldwide in cars and trucks produced.

Fiat's aim eventually is become the world's No. 2 automaker, behind Japan's Toyota, according to Germany's economics minister, who met with Marchionne on Monday in Berlin.

But there are lots of questions about whether Marchionne can pull it off.

The plan is audacious, not the least because Marchionne is hoping to execute it without putting down a cent. Fiat is hoping to take advantage of the crisis in the auto industry by obtaining billions in loan guarantees from the U.S., Canada and various European governments.

"We're in the middle of an automotive yard sale," Robinet said. Marchionne has "gone to a yard sale and picked up the really good stuff."

Fiat's deal to take a big piece of Chrysler could not only save Chrysler, it would give Fiat access to the huge North American market.

And by buying GM's main European operations, Fiat could cut its production and development costs through economies of scale and gain expertise in building midsize and larger cars. Fiat, the maker of Fiats, Alfa Romeos and Ferraris, specializes in small cars.

Marchionne made the rounds in Berlin on Monday, seeking to persuade German Chancellor Angela Merkel and her economics and finance ministers that Fiat can save many of the 25,000 jobs at Germany's Opel, not to mention its supplier network. GM employs some 54,000 in Europe, including at Sweden Saab and Britain's Vauxhall. It is not clear whether Saab would be part of a deal with Fiat.

Max Warburton, a Sanford C. Bernstein auto analyst, questioned whether a collection of loss-making auto companies can generate cash, noting that Fiat's auto business posts a profit only because of its Brazil operations. But the really big question is: Where will the capital come from for the new company?

Warburton suggested that Fiat will need to sell off its "jewel assets," CNH agricultural and construction vehicles and Iveco trucks. Marchionne has ruled that out.

In Germany, Economy Minister Karl-Theodor zu Guttenberg said Fiat estimated its short-term financing needs in Europe — stemming from GM's debts and pension obligations — at $6.6 billion to $9.3 billion, which could be covered by loan guarantees from various governments.

"Fiat wants to get into this deal without debts of its own," Guttenberg said.

GM, for its part, has been trying to find investors to help stave off collapse.

"We are talking to them, amongst other parties. Not solely Fiat, but several parties who have an interest in making investment in our European business," GM CEO Fritz Henderson said in an interview Monday with The Associated Press.

While analysts see advantages in a Fiat-Chrysler combination, there is much more skepticism among industry experts and unions in Italy and Germany about the wisdom of a play for Opel. German unions are worried about jobs, and sour about the $2 billion that Fiat walked away with when a previous partnership with GM was dissolved.

Asked what the plan might mean in terms of job losses or plant closings, Guttenberg said Marchionne "hasn't offered any specific numbers yet, but he described them as not being too dramatic."

In a note to investors, Warburton, the industry analyst, said an Opel deal "makes sense if it can be made to function."

"We remain unconvinced that Fiat has the management depth to pull off this very ambitious task," Warburton said, "although we acknowledge that the company clearly keeps its talent obscured."

But Adam Jonas, auto analyst with Morgan Stanley, said if anyone can pull off such a spectacular gambit, it is Marchionne. Jonas said Marchionne is known for putting in long hours and cultivating talented management teams.

Tom Krisher reported from Detroit. AP Auto Writer Kimberly S. Johnson in Detroit, and Associated Press writers Geir Moulson and Patrick McGroarty in Berlin contributed to this report.


6-9-09 UPDATE: 'High court won't block Chrysler sale' (Yahoo news w/slideshow)

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