“FIX IT AGAIN TONY” EYES CHRYSLER

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It may not be as titanic as the futile Studebaker-Packard merger of the 1950s, but the recent overture by FIAT for a “no cash” stake in Chrysler appears desperate.

With Chrysler’s deadline to come up with a survival plan looming and Chrysler hemorrhaging capital, Fabbrica Italiana Automobili Torino, S.p.A. (FIAT) has proposed a “strategic alliance” and possible equity stake of up to 35% to 55% in what’s left of Cerberus’s mangy dog of a carmaker.

None of that silly “merger of equals” gibberish this time around. FIAT clearly is bargain hunting for a quick and cheap beachhead in the U.S. market.

This is the same FIAT that abandoned the U.S. market decades ago in a haze of awful quality and poor market perceptions (excluding, of course Fiat’s subsidiary Ferrari and the relatively recent micro-reentry of Maserati to America).

This is the same FIAT that Sergio Marchionne brought back from the brink of disaster in 2004.

This is the same FIAT that General Motors spent $2 Billion to get away from earlier in this decade.

This is the same FIAT that provided the building blocks and some of the know-how to the old Soviet Union in a joint venture named AutoVAZ (a/k/a Lada outside the former USSR).

This is the same FIAT who worked with Yugoslav carmaker Zastava (parent of the FIAT127-derived Zastava Koral, which was best known around these parts as the Yugo).

How is this supposed to impress the 535 automotive ignoramuses in Congress who are poised to send Cerberus to the pound at the end of March 2009?

Will Chrysler’s Robert “Home Depot” Nardelli – and even Jim “Toyotathon” Press – will drive to their next verbal flogging before Congress in Michael Schumacher-edition Ferraris instead of corporate jets to demonstrate FIAT’s technical prowess?

Sergio, however, sees this as a cheap way to build a national dealer organization for the FIAT 500 small car, slated to immigrate stateside in 2010. Of course, some analysts suggest that Chrysler’s dealer base is about 75% larger than is sustainable, which would make it probably about 90% too big for the FIAT 500.
FIAT is probably banking on the short memories of Americans to forget “Fix it again, Tony” and all of the other 1970s jokes about FIAT’s legendary quality shortfalls and repair shop gouging. Yet teaming up with the quality-challenged Chrysler is sure to prompt know-it-alls like “Click and Clack, the Tappet Brothers” and various flacks for “Team Toyota” to “yuk it up” at FIAT’s expense.

Moreover, whether Americans are clamoring for Italian small cars – regardless of how well they’re received over on “the Continent” -- remains an open question.

Still “Dr. Z’s Daimler and Cerberus both have left Chrysler with minimal small car options. And the universe of potential mates for Chrysler is very limited. Perhaps an alliance with FIAT is the best Chrysler can come up with for its breathlessly-awaited viability plan.

But if somehow Chrysler lives long enough to hawk FIAT 500s in the heartland along side SRT-8s, Chargers, and Ram pickups, will they hire Tony Shalhoub, who voiced “Luigi” the 1959 Fiat 500 in Disney/Pixar’s film Cars, to announce “Dis tinga does NOTA have a Hemi?”

Or will we see an automotive version of the Maytag repair man (named Tony, of course) lamenting the bulletproof reliability of new FIAT-Chryslers.

And will the few FIAT Topolinos that haven’t been altered with a honkin’ Hemi V8 now be welcomed at the MoPar Nationals?

Only time will tell.

CHRYSLER ON THE BRINK: WILL OBAMA MAKE A DEAL WITH CERBERUS?

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Remember that $11 billion in cash that General Motors was coveting through a possible "Hail Mary" with Chrysler, L.L.C.?

Not so fast . . . .

It turns out that (according to unnamed sources who aren't supposed to be blabbing to the press) that:

"The $11.7 billion the struggling automaker said it had as of end-June has seen a substantial decline because of the company's deteriorating performance marked by a 35 percent slide in October sales and increasing cash incentives . . . ."

Perhaps that minor little detail has stalled the "trick or treat" merger with GM. Too many tricks. Not enough treats.

These same "unnamed sources" are claiming that without a merger or government help, Chrysler will run out of money by the middle of 2009!

Short term survival strategies involve "parting out" Chrysler's brands and outsourcing more operations.

However, like the rest of the Detroit 3, a cash injection from the "OBAMAcrats" is at the top of the survivor wish list.

Chrysler, privately owned by Cerberus Capital Management, LP, is arguably in a weaker position to demand public largesse than publically-held GM and Ford Motor Company.

Yet the three-headed venture capital hound guarding the gates of Hades will have to "cut a deal" to keep Chrysler from slipping into the fiery abyss.

The irony is that Cerberus Capital Management, LP counts among its top executives one Dan Quayle. Quayle, the oft-lampooned Vice President under George H.W. Bush (Bush 41), is hardly a beloved figure among Obama's "netroots" supporters. Speedzzter wonders how the hard-core OBAMAmaniacs would react to a bailout deal between "The One" and Murphy Brown's chief critic . . . .

Will the OBAMAistas put preservation of union jobs over political retaliation? Only time will tell.

GM-CHRYSLER . . . A "JUNKYARD ROMANCE?"

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Following the conventional wisdom of "Autoextremist" and others, Jerry Flint pans the prospects and wisdom of a GM-Chrysler merger.

Flint seems to be doing the bidding of Carlos Ghosn. He opines that a "Renault Alliance" with Chrysler is a better idea than the apparent game of chicken going on between Cerberus (GMAC & Chrysler) and General Motors. But given Nissan & Renault's cutbacks, the future of such a pairing might be dim.

A GM-Chrysler merger probably isn't as horrible as Flint depicts it. But it would be a historic challenge to pull off without fumbling.

Too bad Cerberus Capital can't or won't "part out" the good parts of Chrysler. Buying Jeep, the Hemi, the minivan operations, Chrysler's half of the GM-Chrysler electric hybrid automatic, and the RWD car designs from Chrysler is probably cheaper than starting from scratch.

If someday all that's left in the American mass market is a bland assortment of FWDs from Korea, Japan and China (albeit some will probably be screwed together in low-wage Southern assembly plants--even if Obama and the Democrats kill the secret ballot in union elections), we will all regret the day when we -- as consumers, auto executives, politicians, investors, bankers, union leaders, and as a nation -- killed Detroit.