Fiat Chrysler CEO Sergio Marchionne recently announced the automaker would stop producing the Dodge Dart and Chrysler 200 sedan. It was a confusing move at first, but when you consider that Marchionne is trying to prop FCA up for a merger as best he can before he retires in 2018, dumping two slow-selling money pits like the Dart and 200 seems like a no-brainer.
As The Detroit Free Press’ Mark Phelan points out in a recent op-ed, Marchionne’s dumping of the Dart and 200 makes the company more desirable in the eyes of the automakers it could potentially merge with. Now a company like PSA Peugeot Citroen can have access to FCA’s cash cows, like the Ram 1500 and Jeep Grand Cherokee, without taking on the burden of weak products like the Dart.
Ridding itself of the Dart and 200 does not guarantee FCA will reach a deal on a merger with another company, as it still needs to address problems such as productivity and profit margins, but it’s a step in the right direction. Another automaker may also want in on FCA’s North American resources, such as its plants, engineers, line employees and dealer network, giving it a greater chance of reaching a deal.
FCA may be able to find a fellow automaker with a strong car lineup in need of more trucks and SUVs to link up with, such as the aforementioned PSA Peugeot Citroen, but just because their products are different doesn’t mean the partnership will work, analysts say.
“A partnership needs to be collaborative and mutually beneficial,” IHS Automotive senior analyst Stephanie Brinley told The Free Press. “That’s about attitude as much as product.
“Geely and Tata let the companies they acquired continue to do what they did well,” she added. “That’s the exception, not the rule. Just because the products don’t overlap doesn’t mean the companies fit. You can draw the lines on paper, but you can’t draw the cultures, and you can’t draw collaboration.”
If FCA can find a merger in the coming years, it may be able to turn itself around and continue making the cars and trucks its known for and keep employing a large American work force. But as The Free Press points out, if Marchionne can’t land the type of deal he’s looking for, there could be trouble in London-based automaker’s future.