Fiat + Chrysler = ?

I've been reading with great interest the recent talk about a potential merger of Chrysler and Fiat. So many thoughts are crossing my mind and they include skepticism, disbelief, serious concern over heavy-handed White House influence, and laughter...can't help that. The laughter will be familiar to anyone old enough to remember the Fiats of our youth. Fun, inexpensive roadsters were Fiat's main export to the US, and fun they were. They were also notoriously unreliable, breaking down on a regular basis, as much or more than my beloved British sports cars (and they were in constant maintenance mode). So for us, we can't help but wonder at the spectacle of two of the most unreliable brands in the automotive world actually merging.

However, being a car guy from way back, I'm aware that Fiat makes pretty good cars these days! And they're very popular across Europe. So I can get past that. What I can't can't past is the potential for disaster in merging two disparate corporate cultures. Fiat has a fascinating and successful history of making popular cars and even tanks and planes back during the WW 2 era. More recently they have acquired Alfa Romeo and even Maserati, with the latter enjoying great success under Fiat control. Fiat's ownership and board have been dominated by family members even today. This is a quintessential European and notably Italian company.

Chrysler has a history of greatness, but I emphasize history, as in a long time ago. Who didn't love the great Chrysler muscle cars from the 60s and early 70s? But since then their only distinction has been the development of the minivan, which was a huge success, but now other companies have eclipsed Chrysler in sales and quality in their iconic product. Sales of other Chrysler cars plummeted as well. Plymouth is gone and Dodge struggles.

Chrysler is now owned by Cerberus, a private equity group, and a Cerberus principle is now CEO. That's Robert Nardelli, whose record of running Home Depot is somewhat less than stellar. Cerberus is not interested in cars per se, only in turning a profit from their takeover of Chrysler. Nothing wrong with profit! But they don't know the industry and I suspect they don't really care. And their cars still suffer from poor quality and high repair costs compared to other US auto manufacturers. Chrysler would gain access to European markets and Fiat to ours, but will Europeans buy low-quality Chrysler products? Fiat's best car is the Fiat 500, a terrific small car that some say would be competition to the Mini Cooper. But Americans still love larger cars so banking it all on small cars seems unwise, even if gas prices rise again.

So we have two disparate companies and cultures, and beyond the superficial and I think overly-optimistic cross-marketing business model, I see a culture clash reminiscent of another failed merger. As others have pointed out, anyone remember Daimler-Chrysler? Are the lessons of history being ignored again? I'd love to see Fiat in the US again, but not this way.