While the number of divorces in England and Wales fell for the third straight year last year — it’s now at it’s lowest rate for 26 years — the likelihood of car company marriages lasting into ripe old age and producing any decent offspring just keeps on plummeting.
Last year, Ford and Jaguar went their separate ways, after 20 years of non-conjugal bliss. To be fair, some fine cars resulted from the wedlock. And the vulnerable (British) partner in the marriage has since moved to the protective bosom of the giant (and rich) Tata corporation of India. But for the giant US auto maker, the coupling was a financial disaster that made the Donald and Ivana Trump divorce look like a low-key goodbye. Jaguar ended-up costing Ford more than $5bn.
This year, the General Motors-Saab matrimony ends and the future of both makers look uncertain. Unlike the Jaguar-Ford nuptials, this one had not one single moment of wedded bliss. The large conservative American and the quirky Swede had few synergies and no cultural empathy.
Other famous motor-marriages-from-hell include the Daimler-Chrysler dalliance — which ended in the most expensive divorce in car company history and Chrysler’s eventual bankruptcy — and the BMW Rover fiasco. BMW’s ‘English patient’ eventually went out of business. Rover itself was also a merger of various disparate British car brands — Austin, Morris, Wolseley, Triumph, MG — all of which now have as much national relevance as The Woodentops or Captain Pugwash.
Carlos Ghosn, joint boss of Nissan and Renault, reckons all car company mergers or takeovers of the past 20 years have been failures because a strong partner forcibly took over a weaker one and imposed on it an alien and inappropriate culture. The Nissan-Renault alliance, he contends, has been different. Both companies kept their independence, sharing best practices rather than cultures or management. But Renault’s recent loss of form has started to undermine Ghosn’s bullishness. Many blame its travails on Ghosn stretching himself too thinly.
All of which is not great for Sergio Marchionne, boss of Fiat, which has entered high-profile connubiality with bankrupt Chrysler. Although Italian-Canadian Marchionne might claim to understand the two cultures, it is hard to imagine more unlikely bedfellows than the working class Michigan motor maker (speciality: pick-up trucks and SUVs) and the suave Torinese manufacturer (area of expertise: small cars).
Yet no car boss is better respected than Marchionne, who claims his Fiat/Chrysler model sets a new industry paradigm. Fiat, at least initially, is not putting a dime into Chrysler. The US government is doing that, thank you very much. Rather, Fiat is providing technology and managerial expertise. That limits Fiat’s risk, argues Marchionne.
Marchionne has turned around Fiat by concentrating on fun new cars that also make a profit (such as the new 500 baby car), by slicing production capacity, boosting sales and strengthening the Fiat brands (which include Alfa Romeo, Maserati and Ferrari). He is a quirky man, famed for wearing scruffy sweaters in a land
where his peers typically wear immaculate Armani or Brioni suits. He loves jazz, Russian literature and opera, and chain smokes. Despite his deceptively casual nature — and I have met him a number of times — he is anything but casual in business.
If he sorts Chrysler, he will have rejuvenated a car maker that has been in trouble for much of the past three decades, as well as boosting the industrial credentials of President Obama. He will also have turned around the perceived wisdom that, with motor makers, marriage just doesn’t work.
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