The 2009 Chrysler-Fiat Strategic Alliance (Teaching Note copyright Syed Tariq Anwar)
The case is intended to have students look at the 2009 Chrysler-Fiat strategic alliance, its current issues, and future viability in the global auto industry. The new landscape of the American auto industry and the role of Fiat is analyzed in the cross-border tie-up. After de-merging with Daimler in 2007, Chrysler did not do well because of the 2008-2009 global financial crisis and its bankruptcy filing. Chrysler’s other problems included its financial constraints and heightened competition in North America. The company had no choice but to look for a partner. During this process, Chrysler explored the possibility of a tie-up…show more content… This is also attributed to the auto industry’s consolidation, restructuring, and cost-cutting activities. Chrysler and Fiat ended up seeking an alliance because of their compatibility, product portfolios, and markets. In Chrysler’s case, the main motive was to seek a partner who could help strengthen its financial problem regarding new technologies, markets, and quality standards. Chrysler did very well after its 1980 's reorganization and introduced many new models. In 2008-2009, Chrysler suffered because of the global financial crisis and weakened demand in the auto industry. Before filing for Chapter 11 in 2009, the only alternative Chrysler had was to seek a partner. As of May 2009, Chrysler-Fiat Strategic Alliance looks feasible. At the same time, cross-border alliances are difficult to succeed because of differences in corporate cultures, ownership issues, regulatory barriers, and labor unions. As discussed in the case, Marchionne may become the CEO of Chrysler if Fiat raises its stake in the company. According to analysts, the Chrysler turnaround is possible if Fiat shares appropriate technology with Chrysler. In Chrysler’s case, the company can add a good value-added to the alliance by sharing its two cash cow products (Jeep vehicles and Dodge trucks) with Fiat.
Harbour, James E. and James V. Higgins. (2009). Factory man: How Jim Harbour discovered Toyota 's quality and