The 2009 Chrysler-Fiat Strategic Alliance

The 2009 Chrysler-Fiat Strategic Alliance

1)      What are your views of the 2009 Chrysler-Fiat strategic alliance and its future prospects in the auto industry?

In the future, Fiat is expected to own 35 percent of Chrysler by 2013 and could acquire 51 percent of the company. If each company achieves their alliance objectives in the areas of cost cutting, technology sharing, global integration, product rationalizations, and R&D savings, the tie-up will definitely be rated as a major achievement.

2)      Analyze and evaluate Chrysler and Fiat’s strengths and weakness before and after their 2009 strategic alliance (see table II and III).

Fiat has been successful in Europe and Chrysler has a brand name in North America. However, Fiat lacks visibility in North America and Chrysler does not carry a strong dealer network in the European markets. They offset each weakness and use each advantage.

3)      Compare and contrast Chrysler and fiat with five other global auto manufactures (GM, Ford, Toyota, Volkswagen, and Daimler) in the areas of global operations and manufacturing issues (see table IV and Exhibit III).

Chrysler always trailed both GM and Ford in market share, technology, and consumer satisfaction. Chrysler was called the “Number Three”.  To make matters worse, the company was further downgraded in the auto industry with the arrival of Japanese companies. However, Chrysler-Fiat got big competitive advantage recently because of the merger and acquisition.

4)      Analyze Chrysler and Fiat’s brand portfolios in the world auto industry. How do you see both companies revamping and overhauling their brands in the short and long terms (see Exhibit I)?

Basically, both companies’ brand portfolios (passenger cars and commercial vehicles) are compatible for each company. However, this will be a daunting task in the short term.

5)      What did you learn from the Chrysler-Fiat Strategic Alliance regarding managing multinationals in the changing global business? What role did the U.S. government play in the formation of this alliance?

If Fiat helps Chrysler, government will give Chrysler additional loan. Moreover, in February 2009, the Obama administration initiated the auto bailout but they required that Chrysler file bankruptcy.

6)      What has happened to the company since this case was written as the alliance was being formed? Give an update as of the time of your reading this case?

In this text book ( International management Managing Across Borders and Cultures) said that Chrysler is expected to sell its shares to public in  2011. However, one update information of article said “Marchionne still isn’t saying when the automaker will go public, but he is saying staging an IPO will be relatively easy once the time comes. (http://www.thestreet.com, 03/07/12 – 10:47 AM EST)”

Marchionne said the preparing of IPO is already done but he didn’t make final decision of going public.