Chrysler Fiat: Strategic Alliance Essay
Case Brief: The 2009 Chrysler-Fiat Strategic Alliance
Facts of the Case
• Historically, Chrysler has been the number 3 auto manufacturer in North America, behind GM and Ford in market share; maintained number 3 designation after entry of Asian OEMs.
• Chrysler: o Founded 1925 by Walter P. Chrysler o Manufactured cars for the masses o 1980s: saved from the verge of bankruptcy by US government o 1990s: starting receiving positive reviews from analysts, but remained behind Ford and GM o Merged with Daimler-Benz in May 1998 for $36 billion o 2007: Cerberus Capital Management, LP acquired 80% of DaimlerChrysler for $7.4 billion o April 2009: Fiat SpA establishes …show more content…
1. What are your views of the 2009 Chrysler-Fiat strategic alliance and its future prospects in the auto industry?
The 2009 Chrysler-Fiat strategic alliance appears to be a win-win situation for both companies. Chrysler was struggling, recently and historically and needs the support of a stable company. Since Marchionne took over leadership of Fiat in 2004, Fiat has been just that: stable…and rising. As a condition of the 2009 bailout by the US government, Chrysler was required to restructure and seek “partnership with an auto manufacturer for future survival” (Anwar, 2009). The partnership will substantially benefit both parties as each brings assets to the table of which the other is in need: Chrysler has access and networks in the North American market and the large car, SUV and truck brands and Fiat has the European market access with the small car technology. If the corporate and brand integration can be achieved smoothly, then the success of the strategic alliance will be profound and Chrysler will again see itself competing strongly with other US manufacturers. However, if Fiat and Chrysler cannot coexist and pull each other