What’s going on with FCA CEO Sergio Marchionne trying to create a new “merger of equals” between FCA (Fiat Chrysler) and presumably any takers – the latest being General Motors which is treating Sergio like the nerd in 16 Candles. Maybe we are on the brink of 1998 again, when Daimler came in and scooped up a Chrysler that was secretly on the brink of extinction – again.
That’s the news in the auto industry these days – besides the debacles at Takata with their deadly air bag system and GM with their faulty ignition switches – and the Chrysler news made me reminisce last night in Detroit when I spoke to the German-American Chamber of Commerce branch in the Motor City.
Leading up to and after Chrysler’s bankruptcy in 2009, Daimler was constantly blasted for their handling of their “merger” with Chrysler. The facts beg to differ as the Germans actually saved Chrysler and is the very reason Chrysler is alive and (somewhat) well today under the guidance of Mr. Marchionne, despite his latest shenanigans.
When Daimler “merged” with Chrysler in 1998, it did something very good and very bad. Let’s start with the latter. The “merger” masked a death dive Chrysler was just beginning and did not come to light until December of 2000. The good is that not for Daimler, Chrysler most likely would have gone into bankruptcy in late 2000 or certainly by early 2001. Alone. In 2001, with Chrysler filing bankruptcy alone, there would be no government bailout. Congress and the President would have concluded the U.S. had too much capacity and let Chrysler die. After all, Chrysler had already been saved two decades prior.
Daimler’s custody of Chrysler allowed the company to restructure under the tutelage of Dieter Zetsche and live another day until a perfect storm (led by Hurricane Katrina killing truck sales) hit and the German shareholders had had enough and Chrysler was finally “given” to the brain trust at Cerberus Capital Management. The rest is, well, hysteria, and, unfortunately, FCA CEO Marchionne is seemingly throwing fuel on another fire as we speak.
No matter what happens, Chrysler’s American employees and dealers owe the Germans a big danke schoen.