FCA/Renault merger
- Thread starter JC68vert300
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I agree with you analysis of the politics involved with saving jobs. As a practical matter, Fiat is an inefficient auto company that has lost money on it's European operations for many years. The US taxpayer ate $1Billion of the funds loaned to Chrysler as part of the bailout and sale to Fiat. Fiat was unable to come up with all of the funds needed to complete the deal to buy Chrysler even at the deeply discounted price as Banks were unwilling to loan Fiat $350 million in additional funds as Fiat was already deeply in debt. The Obama administration effectively gave Fiat the $350 million as a clean energy grant to encourage the production and development of electric powered vehicles. As you might have noticed, whatever the money was actually spent on, it was not for electric vehicles. Fiat/Chrysler is not really even in that market save for a few hybrids. The other aspect of deal was that Chrysler needed to be restructured as part of the bankruptcy process, that way the parts that were profitable and could be self sustaining could have been saved or sold to other companies. That did not happen and Chrysler is still burdened with excessive overhead that will return to bankrupt the company again at some future date. Does anyone really think the US government will rush in to save Chrysler now that it is foreign owned?
Dave
I very much disagree with your assessment of how well Chrysler has been managed "by Fiat". The reality is that the Fiat owners and Sergio Marchionne did a really good job in my opinion in bringing the company back to life and just last year paid off their debt finally and are now investing heavily in new plants and prosperous vehicle models such as Ram and Jeep. They did dump the Dodge Darts and the Chrysler 200s because they could not make profits on those vehicles. The money the banks cost us in the fall of the economy in 2008 were never paid back either, were they? The reality is that I don't think the vehicle manufacturers could have been all that responsible for the fall in the economy that the big banks set us up for or for the reality they faced that all of a sudden consumers had no money. Ford saw the writing on the wall at the last minute and Mullaly then mortgaged the company to the hilt to avoid going bankrupt. He saved them from bankruptcy only by the last ditch, last minute move. Chysler is making very high quality, competitive vehicles these days in my opinion and that is the bottom line as to what counts in being successful.
And it wasn't just a "political move" to save the manufacturing and engineering jobs at the company, it was an essential part of the successful bailout. It was, simply put, the smart thing to do, despite what Romney or you apparenty thought. Would you call it a political move if Trump had been in the same spot and made the same decision? I am not a big supporter of Trump, but I surely would not accuse him of making a purely political move to save jobs. It is the right and smart thing to do. I don't care how profitable/successful Fiat has been or was at the time, as they at least stepped up to the plate, provided a substantial portion of the funding and put good, very capable leadership in charge. They deserve credit for that. As for investing in electric vehicles, Chrysler had to get its house in order first and now it is doing more. The Pacifica Hybrid minivan is a really good design and has received notable reviews. It appears there is going to be a glut of pure EVs on the market very soon, and I am not so sure how much profit will be made on them going out the gate. I don't believe, given the realities before them back in 2008 we could have hoped Chrysler would do as well as they have actually done. I really like that at Ram for example, they are really driven to be the best in that segment and have now achieved that according to all the press critics and if they keep it up, they will eventually eat some of Ford's share and have already passed Silverado in sales. And the push at Jeep is also the kind of management that excells and generates plenty of profits. FCA is now looking for an alliance to restructure itself to achieve greater economies of scale to reduce their overhead and in fact, I am sure they are not the only ones. The business just keeps getting more cut throat.
I suggest you drive a new Ram pickup and then tell me it isn't the best pickup made today. And the excitement of Jeep has never been greater. And more SUVs are coming. No one knows what to do with the passenger car segment but even there, due to creative and driven engineers the aging Challengers are, last time I looked, outselling much newer designed Camaros.
And whether Chrysler is foreign owned or not in part, it still makes good sense to bail them out if they are basically doing a good job and the economy crashes for reasons beyond their control. Subprime loans are again inching up and defaults are growing as well. Most of the engineering is done in the U.S. and the manufacturing jobs that would be saved would be instrumental in success of another bailout, godforesake that it happens again so soon. The banks are still not on a proper leash in my opinion. And yes, I do believe President Trump would do all he could to save them again if we suffer a crash again - I do believe he is committed to a successful United States and bringing back and saving all the jobs he can. I do give him credit for that even if I don't always agree with some of his other moves in other areas of the world.
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GJS
Senior Member
70bigblockdodge
Old Man with a Hat
Does anyone else get the feeling that all this autonomous car is a crap shoot that no one really knows the marketability of such a convenience. Didn't Honda and GM have 4 wheel steering because of around 2-3 dipshits that could not negotiate a turn?
What exactly is going to be the cost of this not needed option. How many people are asking for the self parking option that isn't part of a package they already want?
This seems like a idea that is very polarizing and lots of people that are bored with their commute say that would be awesome. In reality if it adds $10,000 to the price of a car that you are only buying to commute with, are you going to say yes that's awesome.
I know the insurance companies will play a part in this one but even if they get it to work well the cost will ultimately decide this market.
Yes a LeCar that drives itself makes me want to vomit
What exactly is going to be the cost of this not needed option. How many people are asking for the self parking option that isn't part of a package they already want?
This seems like a idea that is very polarizing and lots of people that are bored with their commute say that would be awesome. In reality if it adds $10,000 to the price of a car that you are only buying to commute with, are you going to say yes that's awesome.
I know the insurance companies will play a part in this one but even if they get it to work well the cost will ultimately decide this market.
Yes a LeCar that drives itself makes me want to vomit
Remember, people buy cars today based on monthly payment and if they can get financed. If the price comes down to $50 a month, even if it means more months of payments, you'll see a lot of them.
My first wife's little brother had one exactly like that. He called it the French Yugo.
BillGrissom
Active Member
I think the purpose is for EV credits, which are more burdensome in Europe than even CA. Previously, FCA had announced spending $$$$ to buy credits from Tesla for Europe, so looks like this merger will nix that plan. I was a little happy when Daimler owned Chrysler since I have two 1980's M-B diesels. I recall they even shared some engines or trannies w/ M-B cars during that, though parts are sourced worldwide regardless.
If you wonder how Fiat was able to buy Chrysler, I understand they developed most of the direct-injection and common-rail diesel technology and licensed it to M-B and others. Renault isn't known much in the U.S., other than the cheap Le Car. Delorean used a Renault engine. I think both can produce high-end cars if they choose. For some reason, only the cheapest ones have been exported to the U.S., mainly as quick fixes for the gas crises of the 1970's.
If you wonder how Fiat was able to buy Chrysler, I understand they developed most of the direct-injection and common-rail diesel technology and licensed it to M-B and others. Renault isn't known much in the U.S., other than the cheap Le Car. Delorean used a Renault engine. I think both can produce high-end cars if they choose. For some reason, only the cheapest ones have been exported to the U.S., mainly as quick fixes for the gas crises of the 1970's.
Mike66Chryslers
Senior Member
Why is the Nissan ownership stake going to be reduced? I believe Nissan owns 15% in Renault, and that stake would get watered-down by half to 7.5% because Renault would only be half of the new company. However Renault's ownership of Nissan would not be reduced because of an FCA and Renault merger.
Mike66Chryslers
Senior Member
GM invested in Fiat previously, and there was a clause in their partnership agreement that Fiat could exercise which would force GM to buy 100% of Fiat. GM did not want to buy Fiat but Fiat threatened to activate the clause. GM paid a large amount of money to Fiat to have that clause struck form their agreement. Fiat then used that money for the R&D to develop the 500.
Fiat basically got Chrysler for free during the Chrysler bankruptcy proceedings, provided it could meet certain requirements including developing a new small car for the US market. That was the Dodge Dart and Chrysler 200.
The DeLorean used the PRV engine, which is short for Peugeot, Renault, Volvo. The engine was jointly developed by all three companies.
Mike66Chryslers
Senior Member
My take on the push to develop autonomous cars is that it initially started with Baby Boomers. They are a huge cohort which has commanded the consumer market for their entire lives. Now they are retiring and aging, but they don't want to give up mobility and driving. Automakers realized that, if they can provide Boomers with a car that drives itself, it will sell like hotcakes. Except the technology is taking longer to bring to market than they had hoped, and most of the Boomers are going to be dead by the time it's truly ready to drive them door-to-door without any human intervention as well as affordable.
The second reason for developing autonomous vehicles is rising minimum wage. Big business will pay for this technology because it will ultimately save them money. At some point it will become cost effective for all delivery vehicles to be autonomous rather than pay someone to drive them. That will include everything from taxis, pizza delivery, UPS trucks, even large transport trucks. Eventually this IS going to happen. Field trials are already taking place.
Samplingman
Old Man with a Hat
I would think that the only way an autonomous car would work is if they were all autonomous. Can you imagine Google controlled cars driving 55 MPH while the rest of us weave in and out to get a head of the pack? Municipalities and states would have to foot the bill for new dedicated roads, "self drivers only", while our taxes go through the roof and azzhats like Elon Musk laugh all the way to the bitcoin bank.
Millennials are probably the bigger push towards this tech then Boomers, I'd think. Texting while self-driving, they would pay any premium to do that.
Millennials are probably the bigger push towards this tech then Boomers, I'd think. Texting while self-driving, they would pay any premium to do that.
Mike66Chryslers
Senior Member
I agree the combination of self-driving and autonomous cars is the worst case scenario, but since it's impractical to legislate all of us off the road, that's the reality we are stuck with. There are already quite a few vehicles driving autonomously on highways at least. Tesla or any company with self-driving tech makes headlines every time one of their vehicles is involved in a crash, which makes them appear unsafe, but per mile driven I'm confident their record is actually very good. There are trucking companies driving cross-country autonomously already. Here's one example I found searching Google. A company called TuSimple has a fleet of 17 autonomous transport trucks which have been on the road since last August. They have now partnered with US Post for a trial.
Post Office to test autonomous semi trucks for hauling mail across state lines
Boomers are currently age 55-75, nearing or in retirement, so their purchasing power is declining. There are 76 million of them in the US.
GenX are 40-54, moving into their peak earning years, and there are 82 million of them.
Millennials are 25-39 and there are 73 million of them (less than the Boomers), but because they are still young and therefore at different stages of their lives, they are broken into two subgroups for marketing purposes:
25-29: 31 million
29-39: 42 million
https://communityrising.kasasa.com/gen-x-gen-y-gen-z/
In general, Milennials can't afford self-driving cars yet, but in 15 years they will be at the age where GenX are today. Self-driving tech (and public policy concerning it) will probably be mature enough and starting to appear in less expensive cars by then. So you are likely right that Millennials, not Boomers, may have been the target market all along. Self-driving cars will hit the mainstream just at the right time for them.
Wasn't PRV part of the same consortium that brought in all of those fuel efficient mid-range diesel trucks, Magirus and Mack that were sold in the late '70's that promptly blew up all over the freeways? The Volvo, Mack and Magirus all shared the same cab and chassis, Volvo used their own diesel engine the TD60 which held up fairly well. The Mack used Peugeot and Renault diesels that were a POS. Not sure which engine was in the Magirus, but it was the worst of the three. One of the local Garbage companies here traded in their White Compacts on a fleet of the Magirus trucks and had to replace them all after about two years because they could not keep them running.
Dave
Mike66Chryslers
Senior Member
You've got me there Dave. I am not up to speed on manufacturer tie-ups in the trucking world.
70bigblockdodge
Old Man with a Hat
I would like to buy that robot that will set up the racks, direct where the coil goes on the trailer to the craneman or robot crane, then through the chains and hook them up bind them down , make sure the chain is not twisted and will pop loose as soon as the truck moves, hears the chain pop loose retightentens it, checks all the coils after the first 50 miles rechecks every 2 hours throughout the trip. Then opens up the trailer, unchains the coils, stows the racks and dunnage for deadhead closes the trailer back up.
The list goes on.
For mail and terminal to terminal work. Door swinger work I guess it would work fine. For long haul version of that we actually have a better system than that, container trains eliminate a lot of trucks on the interstate running coast to coast and it's already up and running. That's going to be hard to compete with.
I will be retired long before anyone is going to allow 60,000-70,000 #of steel coils to roll down the road with a robot chaining them down, and be at the wheel.
I get the argument that business would be interested in them to remove the expensive, unreliable human that just sits there staring out the window.
I get John's argument that payments make everything affordable. The $10,000 was a number I was pulling out of my butt. Could be more could be less. I seem to remember the auto companies telling us that 2 door cars are dead, nobody wants them. Man they like to fill a niche market don't they.
I do believe there is very limited market. They will be a splash in the pan with frenzy sales in the beginning then it will settle into a small size market.
In 3rd world countries how are you going to sell a car that drives itself when they can't even sustain themselves. In cheap labor countries with industrial base. Who is buying the cars?
In NA even though we joke about kids these days, I have a whole scout troop that half are turning 16 in the next year that's all they talk about is getting their licence, and stuff they want to do, same crap my friends and I talked about 35+ years ago.
I'm calling B.S. on this "can't wait for self driving cars idea". It will happen but not the overwhelming numbers some predict. The insurance companies will level the $ playing field and it will dry up after a few years and some big lawsuits.
Well so much for that....can I get a refund on the French classes I’m taking????
FCA US Media - FCA withdraws merger proposal to Groupe Renault
FCA US Media - FCA withdraws merger proposal to Groupe Renault
Amen to that !
LeBaron1973
Old Man with a Hat
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Now Renault may offer to take over FCA???
I really never thought anything would come of it. Without Nissan in such an alliance, it would have been a big mistake. And I feel that the whole effort to get rid of Goshn was spearheaded by Nissan, who wants more control over what they do without having to bow to Renault or Goshn or anyone else. I never thought Nissan would be a part of this proposal, and indeed they have killed it. I am glad FCA pulled out of the whole thing.
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