silvrsvt Posted August 31, 2015 Share Posted August 31, 2015 http://www.autonews.com/article/20150830/INDUSTRY_ON_TRIAL/308319981?template=mobile Well he is presistant! Quote Link to comment Share on other sites More sharing options...
PREMiERdrum Posted August 31, 2015 Share Posted August 31, 2015 I just read this (off your FB page!) and it was about here I realized that Sergio is becoming less "cooky old uncle" crazy and more "hide the scissors" crazy. Here's where he lost me: "It would be unconscionable not to force a partner," he said. That sounds like a hostile takeover bid is in the works. "Not hostile," said the FCA chief. "There are varying degrees of hugs. I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you. Everything starts with physical contact. Then it can degrade, but it starts with physical contact." Quote Link to comment Share on other sites More sharing options...
jpd80 Posted August 31, 2015 Share Posted August 31, 2015 Sergio is getting desperate... I wonder if it's all about to go pear shaped without a partner and bridging finance. Quote Link to comment Share on other sites More sharing options...
Bob Rosadini Posted August 31, 2015 Share Posted August 31, 2015 Read the book "Once upon a Car" by Bill Vlasic. This guy is far from dumb. Is he getting desperate? Perhaps. In any case wonder what ever happened to "anti trust"?? Quote Link to comment Share on other sites More sharing options...
jpd80 Posted August 31, 2015 Share Posted August 31, 2015 (edited) Read the book "Once upon a Car" by Bill Vlasic. This guy is far from dumb. Is he getting desperate? Perhaps. In any case wonder what ever happened to "anti trust"?? Bob, you watch Sergio start thrashing around when the pond starts drying up. Fiat were cunning to "con" GM into a deal with a $2 billion Put Option, they won't get caught again. Fiat uses other people's money, it's what they do and everyone now knows it, every deal has been about others putting in cash to benefit mostly Fiat... "This is not a question of telling me to screw off. I understand [GM's] desire to be alone and execute [its] plan. I've listened to the comments ... 'we're still merging with ourselves,' which I do not buy for a company that is 107 years old. You can't merge with yourself." One Ford..... Edited August 31, 2015 by jpd80 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted August 31, 2015 Share Posted August 31, 2015 (edited) you think the capital markets are full of schmucks that owe you something I've obviously made some arbitrary assumptions we're talking about cataclysmic changes in performance There are people who are interested in doing deals. I'm not interested in doing deals with them I'm not trying to date Mary Send the shark. I'd come off the table. I guarantee you that I can carry half the market An attack on GM, properly structured, properly financed, it cannot be refused The benefits are so high that I don't think you can stop the machine. This is not a question of telling me to screw off. A super-cut of Sergio quotes------------------ I can't even imagine what a less professional outlet would have done with this interview. I mean, AN is about the most staid, conservative, buttoned-down outlet in the industry---and this is what they ran with. I wouldn't let a man this crazy restock paper clips at a small town grocery store. Edited August 31, 2015 by RichardJensen Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted August 31, 2015 Share Posted August 31, 2015 (edited) Half the market. Good. Lord. Where? Where? WHERE? What a nightmare company. Dodge, Chrysler, Buick and Chevrolet: Might as well bring back De Soto and Oldsmobile and Saturn and GEO and Pontiac and Plymouth and Eagle and AMC and Willys and Nash. And Oakland and Viking and Marquette. Edited August 31, 2015 by RichardJensen 1 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted August 31, 2015 Share Posted August 31, 2015 At this point one of the following statements is true: Sergio believes this nonsense, in which case he is incompetent. or Sergio is lying through his teeth, in which case he cannot be trusted. 2 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted August 31, 2015 Share Posted August 31, 2015 (edited) Without specifying how he arrived at the figures, Marchionne cites a staggering combined EBITDA (earnings before interest, taxes, depreciation and amortization) figure that he says would result from the merger of FCA and GM "Look, the combined entity can make $30 billion a year in cash. Thirty. Just think about that [expletive] number," he said. "In steady-state environments, it'll make me $28 to $30 billion," at a seasonally adjusted annual selling rate of 17 million. Arndt Ellinghorst, head of global automotive research at Evercore ISI, says the target is realistic. "A combined GM-FCA will generate almost $25 billion in EBITDA this year," Ellinghorst wrote in an email. "If you assume some synergies and peak U.S. cycle market conditions then, yes, they could get to 30 billion in EBITDA." On background, a GM official said company executives have not seen Marchionne's analysis of what a combined company would look like. But he expressed doubts about how Marchionne could hit his profit projection while keeping a promise made to dealers last week in Las Vegas not to impact retailers or cut manufacturing jobs. The devil is in the detail, the company making 75% of the projected EBIT would be GM yet it would seem that most of the merged cost savings benefit FCA. So far this year, GM and FCA's after tax earnings have been nowhere near those figures. Sergio is painting a lot of blue sky that simply does not stack up with this year's figures... Edited August 31, 2015 by jpd80 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted August 31, 2015 Share Posted August 31, 2015 (edited) That number is based on cost-cutting assumptions in the NA market that are wholly, entirely, absolutely and unequivocally unjustified. The assumption is that you're going to see major savings in COGS, labor costs and SG&A. Well, here are my questions: How are they going to save on COGS, when major components are either sourced internally (engines, transmissions), or sourced from suppliers that are going to stridently resist efforts to extract lower prices? And in terms of SG&A (Sales/General/Administrative), where are the savings going to come from? They aren't going to shutter Buick, RAM, Fiat, GMC, Dodge and Chrysler and replace them all with Chevrolet/Opel and Jeep are they? They're not going to kill Alfa and Maserati and keep Cadillac. So where's the savings in SG&A going to come from? And labor? Pfft. Forget about trying to rationalize your labor expenses in the US-----much less Europe, where the labor expenses are even more of an issue. These projections imply that the merger of two companies less well managed than Ford or Toyota will generate margins that are half-again as high as those companies.... --- FINALLY: Even *if* those absurd cost savings were there to be had, what reason is there to believe that these companies, combined, will be able to obtain them? Why should we believe that a company that has squeaked above 10% NA margins based on three shifts of output from a BOF SUV factory and a company that is drowning in debt are, collectively, going to be competent enough and ruthless enough to strip the combined company of its redundant product and redundant engines and redundant platforms and redundant badges? Edited August 31, 2015 by RichardJensen Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted August 31, 2015 Share Posted August 31, 2015 (edited) I mean, ultimately, all of Sergio's numbers require that GM purchase and extinguish Fiat--but that's the last thing that he will ever permit. He's got these numbers that look wonderful---and he will fight to the death to prevent the actions that would be required to achieve them. (he and the UAW and the CAW and the EU and the elected representatives of seven or eight states and dozens of Tier 1 suppliers and thousands of employees at both GM and Fiat). Edited August 31, 2015 by RichardJensen Quote Link to comment Share on other sites More sharing options...
jpd80 Posted August 31, 2015 Share Posted August 31, 2015 (edited) The language used by Sergio shows his veiled desperation, he needs this deal FINALLY: Even *if* those absurd cost savings were there to be had, what reason is there to believe that these companies, combined, will be able to obtain them? Why should we believe that a company that has squeaked above 10% NA margins based on three shifts of output from a BOF SUV factory and a company that is drowning in debt are, collectively, going to be competent enough and ruthless enough to strip the combined company of its redundant product and redundant engines and redundant platforms and redundant badges? They can't do it and if Sergio manages to bring this on, Ford will be breaking out the champagne glasses. If there was a ghost of a chance at any savings, GM would be in there and signed up but this plan stinks so bad that GM wants no part of it, that should tell us plenty, Sergio is pushing hard for merger because he knows his own spend figures on platforms exceed the capacity to pay for them and without a big company like GM to swallow the costs, FCA is going to go down the plug hole, not immediately but in the near future. Edited August 31, 2015 by jpd80 Quote Link to comment Share on other sites More sharing options...
PREMiERdrum Posted August 31, 2015 Share Posted August 31, 2015 That number is based on cost-cutting assumptions in the NA market that are wholly, entirely, absolutely and unequivocally unjustified. But didn't you hear? He has charts and graphs... on a tablet. Quote Link to comment Share on other sites More sharing options...
jeff_h Posted August 31, 2015 Share Posted August 31, 2015 The language used by Sergio shows his veiled desperation, he needs this deal Thankfully here was Mary's response Quote Link to comment Share on other sites More sharing options...
Anthony Posted August 31, 2015 Share Posted August 31, 2015 Another great article from autonews about how big a hole FCA is currently in: http://www.autonews.com/article/20150831/INDUSTRY_ON_TRIAL/308319980/marchionne-wants-a-partner-but-says-fca-can-survive-alone-in Quote Link to comment Share on other sites More sharing options...
Bob Rosadini Posted August 31, 2015 Share Posted August 31, 2015 Bob, you watch Sergio start thrashing around when the pond starts drying up. Fiat were cunning to "con" GM into a deal with a $2 billion Put Option, they won't get caught again. Fiat uses other people's money, it's what they do and everyone now knows it, every deal has been about others putting in cash to benefit mostly Fiat... One Ford..... Jp- Agree for sure on the "drying pond" issue. I guess that is where he is right now-he has been rebuffed repeatedly and this is but another push. And for sure with GM having their pants taken down one time already by these guys, you can only imagine GM management's feeling about this guy. Like I said though, read the book- When you look at what the great Dieter and Cerebus did with Chrysler, this guy looks good. In any case, mind boggling to me that the thought of such a merger is even contemplated-but I'm showing my age. Such a thought 30 years ago would have been a huge stretch and the Fed anti-trust lawyers would be ready to jump in. Quote Link to comment Share on other sites More sharing options...
Mad Hatter Posted August 31, 2015 Share Posted August 31, 2015 "It would be unconscionable not to force a partner," he said. "Not hostile," said the FCA chief. "There are varying degrees of hugs. I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you. Everything starts with physical contact. Then it can degrade, but it starts with physical contact." IOW, you gonna get raped! Quote Link to comment Share on other sites More sharing options...
Anthony Posted August 31, 2015 Share Posted August 31, 2015 ...and now DeLorenzo has his say: http://www.autoextremist.com/current/2015/8/31/the-full-sergio-a-truly-ugly-sight-to-behold.html Quote Link to comment Share on other sites More sharing options...
grbeck Posted August 31, 2015 Share Posted August 31, 2015 Jp- Agree for sure on the "drying pond" issue. I guess that is where he is right now-he has been rebuffed repeatedly and this is but another push. And for sure with GM having their pants taken down one time already by these guys, you can only imagine GM management's feeling about this guy. Like I said though, read the book- When you look at what the great Dieter and Cerebus did with Chrysler, this guy looks good. In any case, mind boggling to me that the thought of such a merger is even contemplated-but I'm showing my age. Such a thought 30 years ago would have been a huge stretch and the Fed anti-trust lawyers would be ready to jump in. But 30 years ago GM alone had about 40 percent of the market, so any potential merger with another company selling vehicles here would have drawn close scrutiny from the federal government. Those days are long gone. GM is now down to about 18 percent of the American market. Quote Link to comment Share on other sites More sharing options...
grbeck Posted August 31, 2015 Share Posted August 31, 2015 (edited) Another great article from autonews about how big a hole FCA is currently in: http://www.autonews.com/article/20150831/INDUSTRY_ON_TRIAL/308319980/marchionne-wants-a-partner-but-says-fca-can-survive-alone-in Interesting article. What struck me was that Fiat-Chrysler, faced with stricter government mandates and very tough competition, is going to spend $6 billion in an attempt to revive a brand - Alfa Romeo - that even Europeans really don't care about anymore. This quote is interesting: "The Germans can all look at this [and say] this is another one of those minestrone solutions. This car is better than a German car. I've been driving German cars all my life. That car technically is better." How is trying to beat the Germans at their own game working for Cadillac... Edited August 31, 2015 by grbeck 1 Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted August 31, 2015 Author Share Posted August 31, 2015 Wonder how long till we see the shit hit the fan with FCA.... Quote Link to comment Share on other sites More sharing options...
J-150 Posted August 31, 2015 Share Posted August 31, 2015 Regulators would force the sell off of Ram and Jeep. Which leaves second rate cars. Quote Link to comment Share on other sites More sharing options...
bzcat Posted August 31, 2015 Share Posted August 31, 2015 Another great article from autonews about how big a hole FCA is currently in: http://www.autonews.com/article/20150831/INDUSTRY_ON_TRIAL/308319980/marchionne-wants-a-partner-but-says-fca-can-survive-alone-in That article reads more like a prosecutor's indictment... Jeebus... FCA is really in a dire situation and you can pin point most of its current crisis on the quixotic Alfa project. Quote Link to comment Share on other sites More sharing options...
Bob Rosadini Posted August 31, 2015 Share Posted August 31, 2015 But 30 years ago GM alone had about 40 percent of the market, so any potential merger with another company selling vehicles here would have drawn close scrutiny from the federal government. Those days are long gone. GM is now down to about 18 percent of the American market. True-I did not factor that number in-still GM's 18 and FCA's 12 is 30%-not exactly insignificant. In any case, look at recent mergers- no where is the fear of merger impact on market like there was in old days IMO Quote Link to comment Share on other sites More sharing options...
aneekr Posted August 31, 2015 Share Posted August 31, 2015 At this point one of the following statements is true: Sergio believes this nonsense, in which case he is incompetent. or Sergio is lying through his teeth, in which case he cannot be trusted. Never ascribe to malice that which can be explained by incompetence. - Hanlon's Razor Quote Link to comment Share on other sites More sharing options...
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