After acquiring much (of what is left of Chrysler), FIAT now wants to acquire OPEL (the German unit of GM). My question is:wasn’t FIAT itself on the ropes a few years ago? Where are they getting all the money for these acquisitions? Is FIAT mostly owned by the Italian government? If so, what constrainst do they have in foreign acquisitions?
First of all, it’s Fiat and Opel, not FIAT and OPEL. Also, Fiat isn’t owned by the Italian government at all. It’s publicly traded on the Milan stock exchange, and the largest stockholders are the Agnelli family, the descendents of Giovanni Agnelli, who founded the company.
I don’t get the impression that Fiat is actually putting up any money. They are making promises to help Chrysler with their small car engineering expertise (sigh), but they aren’t putting any money into the company that I have heard of. Last I heard they decided not to bother continuing with the Opel deal since the German Gov’t wanted assurances that there would be minimal if any job cuts. Fiat was willing to assure the workers that everything would be fine, but not promise not to cut jobs if the assurances didn’t pan out.
Although Americans remember Fiat from its days as “Fix it again, Tony”, it has transformed itself. It is now one of Europe’s most successful and innovative car companies.
Ed
They have had serious financial trouble this decade, though, and required help from the Italian government to stay affloat. That was one of the reasons that Sergio Marchionne came in as CEO (and managed to turn the company around).
Word.
I had a Fiat Panda as a rental car a few weeks ago, and I thought, “Fiat is getting a huge chunk of Chrysler in exchange for technology and engineering expertise, what-wha-what?”
Vaguely remembered NPR story -
A European car company (could have been Fiat, but I wouldn’t trust my memory, here) was going to be purchased by an American car company (ACC), years ago, when things were relatively rosy for ACC. Far into the sale, ACC decides not to buy and pays millions in contracted disengagement fees.
European car company uses millions to turn their company around and is now in a position to buy pieces of the same ACC as it’s selling stuff off.
Does this sound familiar to anyone?
That was Fiat and GM. GM paid Fiat 2 billion to get out of the contract.
Ouch! Thanks for fillng in a hazy memory.
That would be enough money to do a little something with.