Originally Posted By: bigjl
Originally Posted By: Nate1979
Chrysler is paying for Fiat's lunch. Fiat sales are down and are a disappointment in the US. On the otherhand Chrysler is doing great with RAM and Jeep especially.
Lol.
Is that what you think?
You need to consider what else Fiat own.
And how long Fiat has been in business.
Just because they sell fewer cars in the US than some manufacturers means little.
People outside of the US buy cars you know.
Except it's the truth.
Fiat needed Chrysler as much as Chrysler needed Fiat.
Nobody would touch Chrysler after a bankruptcy. After the failed merger with Daimler and the absolute gutting by Cerberus, Chrysler was worthless and would have likely been picked apart... if not for the US government and Fiat.
Fiat had a different problem: They had no free cash flow. Europe had undergone a massive industry shrink and was stagnant. Since 2009, there has been little growth in Europe. There was no way to grow Fiat's business and they desperately needed more revenue. Enter... US government and Chrysler.
"People outside the US buy cars you know" is a true statement... but North America is the #2 market in the world and it's a massive liability to not sell here. When a government gives you the opportunity, FOR FREE, to begin operations by assuming management of an existing automaker, you don't say no.
Chrysler isn't dead. Fiat has a HUGE new source of revenue. Plus, Fiat got a free pass to reorganize it's operations. All in all, it cost Fiat about $5 billion to assume all of Chrysler, controls about $118 billion in yearly revenue, and sits on a paltry $14 billion in net debt.
All because of the sweet deal they got on Chrysler. So, yes, Chrysler is paying for much of Fiat's success over the past 5-6 years.
The lack of Fiat sales in America are a complete non-issue. Why do you need to sell Fiats in America when you can sell Jeeps and Rams? It all goes into the same coffers now.