Fiat / Chrysler rejects Chineese automakers buying bid

From what I'm hearing the plan is & has been to kill Dodge automobile. Incase you haven't noticed there was no replacement for the Avenger or Caliber. The Dart had a replacement that was built in several countries. Mexico was the one that was planed for import but problems with the Trump admistration that so far has kept that car from comming to Dodge dealers. My bet is it ain't comming. The Challenger & Charger are selling well as of now.

Chrysler is down to the mediocre selling 300 & Pacifica van. The PT Cruiser was not replaced & I just spoke to a dealership principle Wednesday & he said as of now no replacement for the 200 he also told me FCA wants all dealers to separate Chrysler & Jeep. Different buildings to showcase each car. He told me at his store Jeep would get the larger showroom & is considered the main car line. Rumors & dribbles have long been that Chrysler & Alpha would merge. Notice FCA just brought back the Alpha. A sweet car called the Julia. FCA has been wanting to bring many of its Italian cars over but the Fiat brand is struggling mightily & has dampened that.

Ram trucks have already split of from Dodge & likely will be the only US built FCA product other than the Grand Cherokee to survive all of this. (Charger & Challenger are up in the air) The 300 may live on as an Alpha & no longer on a platform with Charger/Challenger. The long rumored smaller Challenger ??? Well I ain't seen it yet. Not even spy photos. If anything like that exist Brenda Pritty company would have them & ive seen nothing.

MOPAR looks safe for now as attempts to incorporate Magnetti Marrilie bombed. And I don't know if you have noticed but Dodge has left most of the racing series it was participating in. They pulled out of all 4 NASCAR series , NHRA Pro Stock, The Ray Barton team has complained they get little to no help with the Drag Pak cars, The Viper is gone. Leaving a couple of Monster trucks & a couple of Trans Am 2 cars & Don Schumakers 3 Funny cars as all I'm aware of. As soon as those contracts expire who knows what will happen.

It's going to get ugly I believe. When FCA bought CHRYSLER for penny's on the dollar I had mixed emotions. I knew it was bad but it was the only offer on the table. A full bank ruptcy would have destroyed most of the remaining CDJ dealerships (2 of mine died just during the buyout from FIat & that went rather smooth) I believe the company would have been in trouble again within 5 years & no one would have come along then
 
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The Chinese own both Volvo and Jaguar at present, and both brands are thriving quite well finally, and much of the engineering continues to come from both Sweden and Britain still. Personally, given the options, I would rather some Chinese company with investment money buy Chrysler out and keep the Chrysler and Dodge brands, but infuse some much needed cash into them to expand their line ups. I wouldn't mind if Fiat died completely. The way Chrysler is going, I also fear, like Bob, that the Chrysler and Dodge brands will disappear. The thought of a Chrysler becoming an Alpha and Dodge being dropped is terrible, and I would never forgive Sergio for his putting money into Alpha instead of renewing the Chrysler and Dodge namplates with a full line up of models. Can the Italians run any business right? But then, no one is buying anything but SUVs these days - yuk! The continuing hollowing out of the U.S. manufacturing/ownership base, no matter who is in the white house, isn't changing.

Corporations exist these days here in the U.S. to increasingly satisfy the share holders, and that means jobs continuing to be shipped overseas to keep costs low. Their prime goal is to make sure their share holders are continuing to get ever more dividends. Our U.S. based corporations don't even care that the middle class doesn't make enough money to buy their cars, as the Chinese market is bigger than ours now, and they will continue to be fine as long as the Chinese buy their cars. Corporate America is now just a money generator for the share holders - building good cars is secondary. Thank you ever increasing greed and fewer and fewer good jobs here.
 
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Handwriting's on the wall as they say.. to me.

So I wouldnt be surprised by anything that happens on the business transaction front in the next 12 months.

First, I aint dissin' FCA or any part of it. Nor am I insensitive to the people issues if it (or big chunks of it) were to change hands in a transaction(s). And I have absolutely NO non-public info .. i just read the same public info everybody can access.

To me, I agree with others above that FCA most looks like a collection of brands: Commercial/industrial vehicles, "Chrysler" minivans, "RAM", "Jeep", "Maserati", and "Ferrari".

Passenger cars for everyday people? Not for long. Nary an electric vehicle or driverless car (despite the deal with Intel last week) as ready as the others have .. and without the "lettuce" to stay in the until those nascent markets take off.

PLUS all the stuff a few of you noted - especially stuff happening with the requests of the dealers to make it easier to "break up." I didnt know any of that.

Plus softening demand in its biggest markets (Europe and NA) , the "overhang" the short-term leases that mature next 18-24 months on top of that (e.g., good USED cars will be CHEAPER, eating into NEW car sales), and then the quality of product .. well let's just say that that doesn't make the company more valuable.

Won't bore anyone with a technical analysis (nerdy, bean counter and financier stuff) from a past life, but my back of the envelope scribbles says to me the "breakup value" is worth more than it is as a "going concern".

Translation: if you sell the pieces and you get more TOTAL money for it than selling the whole thing intact. I don't see it getting more valuable (market cap) in the future either.

I dunno what's gonna happen, or what's really in the minds of FCA management, about the future of their company. I am saying that, to me, a breakup scenario is easiest for me to see with TODAY's facts.

TOMORROW, it could all change. Maybe Alphabet or Apple -- both with gazillions of dollars from loose change under the couch cushions in their corporate lunchrooms -- finally decide to MAKE cars. Not IC-engined vehicles .. but rather autonomonous electrics.

Dont laugh. :)
 
amazinblue82 said:
Handwriting's on the wall as they say.. to me.

So I wouldnt be surprised by anything that happens on the business transaction front in the next 12 months.

First, I aint dissin' FCA or any part of it. Nor am I insensitive to the people issues if it (or big chunks of it) were to change hands in a transaction(s). And I have absolutely NO non-public info .. i just read the same public info everybody can access.

To me, I agree with others above that FCA most looks like a collection of brands: Commercial/industrial vehicles, "Chrysler" minivans, "RAM", "Jeep", "Maserati", and "Ferrari".

Passenger cars for everyday people? Not for long. Nary an electric vehicle or driverless car (despite the deal with Intel last week) as ready as the others have .. and without the "lettuce" to stay in the until those nascent markets take off.

PLUS all the stuff a few of you noted - especially stuff happening with the requests of the dealers to make it easier to "break up." I didnt know any of that.

Plus softening demand in its biggest markets (Europe and NA) , the "overhang" the short-term leases that mature next 18-24 months on top of that (e.g., good USED cars will be CHEAPER, eating into NEW car sales), and then the quality of product .. well let's just say that that doesn't make the company more valuable.

Won't bore anyone with a technical analysis (nerdy, bean counter and financier stuff) from a past life, but my back of the envelope scribbles says to me the "breakup value" is worth more than it is as a "going concern".

Translation: if you sell the pieces and you get more TOTAL money for it than selling the whole thing intact. I don't see it getting more valuable (market cap) in the future either.

I dunno what's gonna happen, or what's really in the minds of FCA management, about the future of their company. I am saying that, to me, a breakup scenario is easiest for me to see with TODAY's facts.

TOMORROW, it could all change. Maybe Alphabet or Apple -- both with gazillions of dollars from loose change under the couch cushions in their corporate lunchrooms -- finally decide to MAKE cars. Not IC-engined vehicles .. but rather autonomonous electrics.

Dont laugh. :)
Click to expand...

Your prognostication seems on point as China's Great Wall is in the process of offering to buy Jeep, and Jeep only. They aren't dumb, as that is the most valuable piece of FCA, and why would they want anything else (except Ram maybe)? And the money guys are saying that Jeep alone is worth more in terms of stock value than FCA is WITH Jeep? I don't get that, but you probably do.
 
Oh.. thought the Chinese was after the WHOLE thing. Jeep makes sense then for market entry/acceptance in US. I COULD see them paying MORE for Jeep Brand (tools/ trademarks, maybe toss in a factory and some engineers) than FCA.

The economic "logic" of "breakup value" is right there then. Example.

Company A has three divisions making three different things. Company A is publicly traded, so take ALL the stock outstanding mutiply by price of stock and that's "market cap" (cap is short for capitalization") of the "equity".

Market cap is NOT the same, generally, as value of the WHOLE company .. but leave that aside. Not needed for this illustration

So Company A has market cap of $100. One division is a superstar, making money as fast as the OTHER two divisions chew it up. Superstar division has a bright future .. the dogs do not. And so on.

Somebody making the same stuff (Companies B through G for example) as Company A's superstar division may really WANT that division. but they DONT want those two dogs eatin' up all the cash.

Because somebody WANTS something, and IF MORE than one Company wants the superstar division, that makes IT MORE valuable.

SO, if you valued (fancy finance stuff .. no need to get into that either) Company A's three divisions, you might get the Superstar worth $125, and the dogs worth NEGATIVE $25, which equals the $100 market cap.

How does Company A get the $125 (or MORE!)? They "divest" (sell outright) the superstar division.

OR maybe they dont GET to decide. Somebody BUYS (either friendly-like or a 'hostile" takeover) all of Company A, and "breaks it up" -- keeps the superstar division, scuttles/sells/ the two dogs and then Company A is gone.

Its "harder" to calculate for real than this simple example .. but THAT's the gist of it.

In this case, Company A is FCA, superstar division is Jeep, and IF FCA sells Jeep, but keeps running the rest of FCA, thats a divestiture of Jeep.

IF somebody buys (an acquisition) ALL of FCA, keeps what they want, and pitches/sells the rest, that's a "Break up"

In either scenario. Jeep is likely worth WAY more than the whole of FCA -- TO the CHINESE or Apple or Alphabet -- still which BIG pieces in it that NOBODY wants as much as they want Jeep (or RAM, etc.).

As long as that economic relationship's true, and assuming it is, yes JEEP could be worth more than ALL of FCA together, and particularly so if a BIDDING war breaks out for JEEP.
 
I believe its LESS likely FCA will give up Jeep .. willingly. That's tantamount to "surrender" .. then you're looking at firesale prices for the rest, and a host of deal leverage FCA has would be gone..

UNLESS the Chinese sent several boatloads of Maersk seatainers packed with cash to Sergio .. i mean a mad, crazy money giving him strategic options he DIDNT have before.

otherwise, my guess would be Sergio still wants a deal for the WHOLE company, of some sort. He's been knocking on doors with that deal for almost 2 years tho.

Anyway, I would be surprised if they peddled Jeep -- but it surely could happen. These are strange days in the global car biz.
 
Speaking from inside at the Dealer level I can tell you that there seems to be a realization that the brand has become all about Ram and Jeep. The five year product plan is rarely spoken of and when asked District reps have little to no information. Sergio once viewed as saviour is now thought of as destroyer...

I write this cruising down the road with Critter on a sunny day in a 70 Fury....some things Chrysler got right...
 
Oh man ... thats very telling right there. wow.

The three to five year product plan a mystery to the dealers -- that's roughly like the coach NOT giving the game day plan to the team.

Maybe that have it .. but its in flux to the degree they DONT wanna mislead anybody? Or, the baby's so ugly they're hidin there ain't no Dodges in it, or passenger cars at all other than electrics, past 2021 or something.

enjoy the sun. cruise on bros :)
 
Dobalovr said:
Speaking from inside at the Dealer level I can tell you that there seems to be a realization that the brand has become all about Ram and Jeep. The five year product plan is rarely spoken of and when asked District reps have little to no information. Sergio once viewed as saviour is now thought of as destroyer...

I write this cruising down the road with Critter on a sunny day in a 70 Fury....some things Chrysler got right...
Click to expand...
Agreed. At one point I believed in Sergio. Especiality after the 60 minutes piece several years ago.
 
I like this statement:
GAC already has a relationship with FCA. Under Chinese law, foreign manufacturers must partner with a local company to produce vehicles in the country, and the Jeep Renegade began rolling off an assembly line operated by GAC Fiat Chrysler Automobiles in April 2016.
Click to expand...

Why we don't require that is beyond me. If Sergio partners that is one thing but if he sells off then that is altogether different. If we required the same thing China does then whoever bought Jeep would be forced to partner with a local company.

But what the hell anyway. When big money is involved people will avert their eyes here. Did one know that when the Long Beach Naval Shipyard was turned over to the City of Long Beach there was a Navy and DOD stipulation that the property could not be used by any mainland Chinese company. The property was used by Hanjin Shipping out of South Korea but they went under. The City of Long Beach has now leased it to COSCO out of China and violated their DOD contract.
 
amazinblue82 said:
I believe its LESS likely FCA will give up Jeep .. willingly. That's tantamount to "surrender" .. then you're looking at firesale prices for the rest, and a host of deal leverage FCA has would be gone. . .

. . . Anyway, I would be surprised if they peddled Jeep -- but it surely could happen. These are strange days in the global car biz.
Click to expand...

Its not on the same scale, but remember: Sears sold off Craftsman. . .
 
The Chinese are buying up all our industries/companies now. You people just haven't come to realize the immensity of it yet.
If we declared war on China, they could shut down the U.S. within 5 minutes without even alerting their military.
 
I fear, too that the Chrysler&Dodge nameplate could be gone in the not so far future
 
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