Archive for Chrysler

Chrysler has decided to grab the axe and split Dodge right in half, severing the ties between Dodge’s Ram truck business and the rest of the company that makes passenger vehicles. Apparently this will allow Dodge to “protect and develop the unique nature of the product offerings within the Dodge brand”, according to Chrysler boss Sergio Marchionne, who is also the CEO of Fiat.

The Dodge Ram truck business will be renamed simply RAM, and will be headed by Fred Diaz. “Dodge Car”’s new head will be Ralph Gilles. Chrysler’s new CEO and marketing head will be Olivier Francois, another man from Fiat where he plays a double role as Fiat marketing chief and the head of the Lancia brand.

Chrysler now has two predominantly truck-based brands – RAM and Jeep. The Dodge Ram is currently in its fourth generation called the Dodge Ram 1500, and is available in various 2-door and 4-door cab bodies.

It’s powered by a choice of a 5.7 liter Hemi V8 producing 390 horsepower and 552Nm of torque, a 4.7 liter Magnum V8 making 310 horses and 447Nm of torque, or a 3.7 liter Magnum V6 making 215 horses and 319Nm of torque.

Dodge also has the smaller Dodge Dakota and the Dodge Durango based on the Dakota. I guess it would make sense for these to follow the Ram to the new RAM brand.

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Dodge Ad Video – Ram Rash!

The GEMA alliance has ended this month. GEMA stands for Global Engine Manufacturing Alliance, and was a joint venture between Mitsubishi, Chrysler and Hyundai-Kia to develop a family of 4-cylinder engines.

There are currently three different sizes available – 1.8 liter, 2.0 liter and 2.4 liter. In Malaysia, there are a few cars that use engines derived from the GEMA project – the 2.0 liter motors in the Lancer and Lancer Evolution X, and the 2.0 liter motors in the Hyundai Sonata, Kia Optima and Naza Rondo.

Chrysler says it intends to replace its GEMA engines with new small engine technology it will gain access to from its new Italian partner Fiat. But interestingly, despite Chrysler stating an intention to replace its GEMA products with Fiat products, Chrysler is the one who has ended up with full ownership of the GEMA plant. Mitsubishi and Hyundai have just sold their stakes to Chrysler. It is likely that the plant will be converted to a plant making Fiat engines in the future.

Technology bought to GEMA by an individual company will remain the intellectual property of that company, so Hyundai and Mitsubishi will likely be able to continue using their Theta/Theta II and 4B series of engines respectively.

Chrysler’s financial situation may be worse than anyone had thought. Their bankruptcy plan involves selling its healthy operations to “New Chrysler”, a company owned by the worker union trust, Fiat, and the Canadian and US governments. The remaining will be used to settle outstanding claims.

Here comes the killer – Chrysler’s lawyers from Jones Day have asked for special priority for their fees to be paid. University of Pennsylvania law professor David Skeel says he has never heard of any lawyer ask for this in a bankruptcy case as they normally don’t take cases where there is little chance of being paid.

Skeel suspects Jones Day are not optimistic about a payment, and because they know what is going on, that is very scary indeed.

Source

GM Europe’s Insignia has been getting good reviews

Well, the conditions for Fiat to take up a stake with the now bankrupt Chrysler has been fulfilled, and Fiat has been quick to look to something else in order to hasten the move towards consolidation of the auto companies during this recession.

Many have predicted that there will only be a few automakers left after this slump, with the rest either eliminated or merged. Datuk Syed Zainal’s suggestion for Proton to merge with Perodua a couple of weeks back would put Proton under the Toyota umbrella via Perodua’s Daihatsu shareholding, which is in turn owned by Toyota.

Lancia, Alfa Romeo, Fiat, Vauxhall and Opel could share B and C platforms

Anyway back to Fiat and the New Chrysler – a third piece of the puzzle that Fiat is said to be interested in acquiring is GM Europe, which covers Opel, Vauxhall, and other GM European operations. The resulting company would be a giant with annual sales of 6 to 7 million cars, which is claimed to be similiar to how much the Volkswagen Group puts out. Saab is pretty much a separate thing, and at least 10 parties are interested in acquiring them at the moment, according to Saab spokersman Eric Geers.

The new company is temporarily given the codename Fiat/Opel and is described by Fiat head Sergio Marchionne to be a “marriage made in heaven” as Fiat and Opel could consolidate their B and C segment cars to use the same platforms, while Fiat continued with its small A-segment platform and Opel’s D-segment platform. Apparently Fiat offered 1 billion Euros for Opel, but GM considers the amount too small for the moment. No updates if any other follow-up offers were made.

Volkswagen’s platform-sharing success is an inspiration to all

But of course whenever there’s any news to do with GM you have to listen to what their unions have to say. Opel senior labor leader Klaus Franz says if the Fiat and GM Europe merger does happen, between 9k to 10k jobs may be lost via factory closures and other restructuring. He then accused Marchionne of trying to build a global carmaker financed with German and American taxpayer money.

Volkswagen’s CEO Martin Winterkorn also warned that achieving and maintaining real synergies between multiple brands while increasing volumes and lowering costs is a very difficult thing to do. He added that Volkswagen’s platform-sharing strategy started all the way back in 1992 and it was alot of hard work and planning for it to be the success that it is today.

And Fiat and GM have already been in some sort of alliance from the year 2000 to 2005, which ended in GM paying over US$2 billion to get out of the arrangement because it was not going very well. At that time Fiat was burning cash at a rate of nearly US$2 billion a year, accumulating $14 billion in net losses during the 5 year period. It was the time of the Fiat Stilo which went nowhere, and a Fiat Punto that shared components with an Opel Corsa.

Whatever happens, it’s really one thing to build a huge empire that could be the second largest carmaker in the world and perhaps the largest in the future, but another to structure and manage it properly once formed. Just look at GM and its mess of brands. You could end up flourishing like the Volkswagen Group or just another GM or DaimlerChrysler.

According to a published report by Reuters, struggling American auto makers General Motors and Chrysler may end up getting funds from private institutions, if the U.S Government decides not to provide further funds to both companies, that will then force the auto makers to file for Chapter 11 which basically mean that both companies will go into restructuring, to become viable businesses.

A number of external advisers to The Treasury are rumored of trying to secure the funds from private institutions, which will be needed to restructure both companies. The amount which is rumored to be about U.S $ 40 billion, and to be backed or guaranteed by the government would also be used to pay back the U.S $ 17.4 billion the government initially lent General Motors and Chrysler late last year.

This means that the U.S Government would not tap into “the people’s” money to give a helping hand to both auto makers. However, this brings us to the next question; will these private institutions be able to extend the above mentioned amount during such uncertain times? If both companies file for Chapter 11, they would also be temporarily protected from creditors.

Click for enlarged version

Chrysler has unveiled their business restructuring plan for submission to the US government in order to quality for the rest of their bailout money. The total money asked for us now US$9 billion, up US$2 billion from the original US$7 billion amount, of which they have already received US$4 billion. Anyway that is not the point, what we’re here to look at is how they plan to integrate Fiat models into their product line-up.

Chrysler will be grabbing 9 models for the US market together with Fiat’s Multi-Air engines (FIRE and FAMB), commonrail turbodiesel engine technology and a dual clutch transmission. Chrysler will be able to supply Fiat with the Dodge Journey, the GEMA world engine with displacements between 1.8 liters to 2.4 liters, and the Phoenix family 3.6 liter V6 engine. The 9 Fiat models include models that will be sold as their original brands which are the Fiat 500, the Alfa Romeo Mito, the Fiat Punto, the Alfa Milano and Giulia (149 and C-EVO based 159 replacement), and an unnamed Alfa crossover.

The other three will use Fiat underpinings but will be Chrysler-branded vehicles: a B-segment 5-door hatchback, a sedan based on the 159’s C-EVO platform, and a larger vehicle based on the D-EVO platform.

Of course whether this will all happen or not depends on whether Chrysler gets the bailout money. Fiat will only confirm its on board with a share take-up (for free!) if that happens.

Scrapped small car project could have been the Dodge Hornet

Chrysler and Nissan originally planned to expand their current cooperation of marketing the Nissan Versa in South America as the Dodge Trazo with another two cars – another Chrysler-designed Nissan (Japanese)-built small car (dare we say this might be the Dodge Hornet?) and a full-sized Nissan pick-up based on a Chrysler (next gen Nissan Titan). But right now in face of a depressing economy and unfavorable dollar to yen exchange rates, that plan has been put on hold. The Versa project will go on as planned.

Other than the Versa, there are also other third-party sourced small cars sold there, such as the Hyundai Atos and the Hyundai Accent, sold as the Dodge Atos and Dodge Attitude respectively. Word is that the Versa-based Trazo will replace the Attitude as Hyundai has officially entered the Mexican market.

The word is that the cancellation/postponement of the other two vehicle projects have nothing to do with the recent involvement of Fiat in the American company, but it’s just that the projects were a deal done during better times, which unfortunately have ended what feels like a long time ago.

After the marriage and the short “family planning” course, Fiat and Chrysler have unveiled details on their new American family. 7 new cars will make their way into the US market, four with Chrysler brands and three with either Fiat or Alfa Romeo badges.

The Chrysler-badged cars could stretch all the way from the A-segment up to the D-segment. Something based on the Fiat Panda/500 platform (also used by Ford to underpin their Ford Ka) would give Chrysler the city car they need. The B-segment will be served by the Grande Punto/Mito platform. A C-segment car will utilize Fiat’s C-Evo platform, which could replace the Dodge Caliber.

Finally, a D-segment car would use a stretched version of the mentioned C-Evo platform to replace the Chrysler Sebring and the Dodge Avenger. This apparently fits well into Chrysler’s vehicle roadmap according to Chrysler executive VP Frank Klegon, as Chrysler does not have an A or B-segment vehicle and their C-segment Dodge Caliber is due to be replaced soon.

The Fiat/Alfa Romeo branded cars are likely to be hits such as the Fiat 500, the Alfa Romeo MiTo, and a new vehicle based on the C-Evo platform for the C-segment which could end up being the Alfa Romeo “149″ (successor to the aging 147).

Chrysler will also get access to Fiat’s Fire T-JET small displacement engines (1.4L to 1.8L). If I’m not mistaken, Chrysler’s smallest engine family right now is the GEMA engine, something it gained from DaimlerChrysler times. The GEMA family ranges from 1.8 liters (4B10) to 2.4 liters (4B12), and Chrysler uses these (including a turbocharged 2.4 liter) in cars like the Dodge Caliber (photo shown above).

Not wanting to lose out on the latest fad of automobile manufacturers sponsoring movie franchises, Chrysler has announced it will be sponsoring the new Terminator 4: Salvation movie, which will see Chrysler cars being product placed in the movie. Chrysler did not say how much money it would be spending on this though.

The other big Detroit automakers also have/had movie deals. Notice the many Ford cars in the last two James Bond movies and the new Knight Rider, and the GM placements in the Transformers movie.

I checked out the trailer and didn’t notice any Chrysler cars. You can watch it yourself after the jump.

Click here to read the rest of Chrysler to sponsor Terminator Salvation movie

Fiat S.p.A today confirmed that it has signed a “a non-binding term sheet to establish a global strategic alliance” with Chrysler and Chrysler’s majority shareholder Cerberus Capital Management. Initial details of the alliance have been revealed. It includes Fiat taking up a 35% stake in the American automaker as well as allowing Chrysler to use “competitive and fuel-efficient” vehicle platforms, components and powertrains to be produced at Chrysler manufacturing bases.

Fiat will also allow Chrysler access to its distribution network in areas that are key for growth, and you could probably assume Chrysler would be the way for Alfa Romeo to get back into the American market. The word is that the Italian company plans to increase this 35% up to 55% over time. Fiat will also assist Chrysler with the viability plan it needs to support to the U.S. Treasury. And apparently the 35% deal does not involve any money. In return for the platforms and management consultancy help with restructuring, 35% of Chrysler will be handed over to Fiat for free.

The other two Detroit companies already have suitable platforms and powertrains to enter the European (Eastern Europe in particular) and Asian markets. GM has Daewoo while Ford has always built decent cars for the European market in the first place. This announcement fills that missing piece in the puzzle of how Chrysler plans its turnaround. It already has existing deals with Nissan mainly for Latin America, and a failed partnership with Chinese automaker Chery, but nothing like this new Fiat deal.

The last time Fiat and Chrysler had alliance talks was in the early 1990s, but that did not go anywhere, and many blame that on disagreements between Lee Iacocca and Bob Lutz, who is now at GM. Then a Chrysler exec, Bob Lutz had likened Fiat to “a bride lying on her deathbed.” Well Mr Lutz, Fiat has turned itself around and both the company you used to work for and the company you are looking for are going around asking for multi-billion dollar bail-outs.

I wonder what happened to the supposed upcoming merger between PSA Peugeot Citroen and Fiat, as reported by an Italian newspaper. Are we looking at a new PSA-Fiat-Chrysler trinity in the future?