On the same day our new 47-year old president took his oath and spoke of “renewing America” and re-establishing our leadership in the world, the 84-year old Chrysler Corporation, once an American icon of engineering and manufacturing, announced the second off-shoring of the company, this time in a “global strategic alliance” with Italy’s gigantic and quasi-governmental carmaker Fiat.
What’s the deal worth? Nothing; Fiat isn’t paying a single lira or penny for their chunk of Chrysler; it’s a deal they couldn’t refuse (but which still must be approved by the US government).
The deal, the companies say, provides Chrysler access to “competitive, fuel-efficient vehicle platforms, powertrain and components,” while Fiat will receive a distribution network in “key growth markets” as well as “substantial cost savings opportunities.”
Chrysler’s first gift to Fiat is allowing them to be in charge of submitting the company’s viability plan to the US Treasury by March 31.
A year from now, Fiat will have the choice to take another 20% of Chrysler, giving the Italian company majority ownership.
Germany’s Daimler purchased Chrysler in 1998 for $36 billion, and the companies, but what was first called a “merger” turned-out to be a Daimler takeover.
Chrysler ended up gutted, and Cerberus Capital, a Wall Street finance outfit, bought 80% of Chrysler from Daimler for just $5 billion in 2007, taking advantage of the incredibly quick loss in Chrysler’s value.
So Chrysler is, again, majority-owned by overseas corporations (Fiat has 35%; Daimler still has 20% of Chrysler, which they’ve been trying to off without success).
During the Lee Iacocca years in the late ‘70s and into the 1980s, and after the company had paid back their federal loan guarantees early, and with interest, Chrysler was a very successful US company.
This was due more to Iacocca’s TV ads, best-selling books, powerful personality and marketing prowess than Chrysler’s actual products; he brought his friend from his years at Ford, race driver and marketer Carroll Shelby, into Chrysler to make some limited edition Dodge cars, and the Shelby name helped sell a goodly number of jazzed-up small autos.
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