The 2009 Chrysler - Fiat Strategic Alliance



The 2009 Chrysler - Fiat Strategic Alliance

Introduction

The paper aims to explain the Chrysler - Fiat Strategic Alliance in detailed manner. Several questions are answered critically such as the future prospects of the alliance in the auto industry, Chrysler and Fiat's strengths and weaknesses are also being discussed along with the recommendations for managing multinationals in the changing global business. Fiat owns 20% of the new company and will be able to increase this stake to up to 35% if and when certain objectives. Fiat cannot become a majority owner until all of Chrysler's debts to the U.S. government are paid (Deresky, 2008). Cars partnered Unions, by the United Auto Workers' Retiree Medical Benefits Trust, owns 55% and the U.S. and Canadian government and 8 and 2 percent respectively. The board of nine people will have three representatives from Fiat, four representatives of the U.S. government, one from the Canadian and one for cars operate slot (Bazerman, 2001). The strategic alliance between the two giants will bring the opportunities to the auto market of United States. It will just only bring up new job opportunities but also will provide new options for new product developments.

Discussion & Analysis

The strengths that first led to this alliance are an automaker with world top-level technologies, motivated employees, improved efficiency, a global distribution network and a strong desire to build cars that consumers want (Lax & Sebenius, 2006). The share of Fiat will progressively increase to a total of 35% subject to achieving certain objectives of the agreement. However, Fiat cannot obtain a majority stake in Chrysler until the debts resulting from public funding have not been fully repaid. The alliance will cause positive impact on both sides through increase in the market with respect to profit and growth. The alliance will allow for a combination of Fiat's technology, which is among the most innovative and advanced in the world, its platforms and engines for small and medium-sized cars as well as an extensive distribution network in Latin America and Europe, with a great legacy of Chrysler, which has a strong presence in North America and talented and committed employees. This all will help to create a new strong brand name and help keep together with jobs, manufacturing a key role in the economy of the United States and Canada.

While it will take several weeks to carry out the agreement by the legal procedures of the United States, preparing for the return of Chrysler in the shortest possible time to the position of a reliable and competitive manufacturer. This is a milestone in the rapidly changing world of motoring and the evidence strongly Fiat and Chrysler to keep relevant in a global scale. The agreement will provide the companies the opportunity to access to the most interesting automotive markets with innovative product offerings and organic, in which Fiat is a recognized world leader - and the benefits of cost synergies. Apart from the possibility of significant cost savings, would ...