RSS
Fiat CEO Sergio Marchionne presented his plan for the merger of Fiat with GM’s European Opel, Saab and Vauxhall divisions to German officials yesterday, and is already defending his proposal.
In an interview published in the Bild daily, Marchionne rejects criticism that Opel and Fiat would be mismatched because the two companies’ vehicles compete with each other.
“The models fit together very well and complement each other,” he said. “But what is more important is that we can build cars on a common platform and so save immense costs.”
“Opel and Fiat build a million cars on the same platform,” he said, pointing out that the Fiat Punto and Opel Corsa are already sharing components. Marchionne’s envisioned cost-cutting scenarios are being protested by Opel union workers, who foresee job cuts and plant closures in Germany.
German Economy Minister Karl-Theodor zu Guttenberg said that Fiat would keep three of Opel’s German assembly plants open, but the future of one engine plant is uncertain if the Italian automaker takes control. Opel employs about 25,000 workers in Germany, and GM’s European operations employ about 54,500 total.
Marchionne’s envisioned company would have sales between six and seven million, on par with Volkswagen and second only to Toyota.
As Marchionne attempts to become the architect of a massive congregation of automakers, Volkswagen CEO Martin Winterkorn said that Marchionne may be biting off more than he can chew.
“I think Sergio Marchionne is trying to increase volumes to lower costs and to survive through Chrysler and possibly Opel, but I wonder if he will be able to succeed because successfully managing several brands and obtaining true synergies is really difficult,” Winterkorn said at an award ceremony for Italian magazine InterAutoNews. The magazine gave Winterkorn with the 2008 top automotive manager award.
Winterkorn warned that creating the type of money-saving, performance-improving relationships between brands that Marchionne is seeking takes years to orchestrate.
“Ferdinand Piech began applying the platform strategy at VW group back in 1992,” Winterkorn said. Today, Winterkorn oversees Audi, Bentley, Bugatti, Lamborghini, Seat, Skoda, and Volkswagen.
Winterkorn also challenged Marchionne’s view that the auto industry players will consolidate into five or six global players in the next 24 months. The Volkswagen CEO predicted that over the next five to ten years, there will be two or three automakers in Germany, one or two in France, two each in the Japan and U.S., one in South Korea, and possibly one in Italy. Winterkorn didn’t make any predictions on what the Chinese auto market would look like.
Source: Automotive News, The Detroit Free Press
MOST COMMENTED ON