OPINION - Flirting is fine, but passion can be fleeting

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Thread: OPINION - Flirting is fine, but passion can be fleeting

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    OPINION - Flirting is fine, but passion can be fleeting

    Flirting is fine, but passion can be fleeting

    Edward Lapham | | Automotive News / July 28, 2006 - 10:50 am


    To some, it must seem as if Carlos Ghosn is having second thoughts about parking Nissan and Renault in a relationship with General Motors.

    That's because on Thursday in France, Ghosn said he would steer clear of an alliance if the potential rewards weren't at least tenfold greater than the risks.

    Quantifying the risks will be trickier than simply calculating the possible financial benefits.

    But that doesn't necessarily mean Ghosn is having a change of heart. He may just be trying to manage public expectations about what could happen. Two weeks ago, Ghosn came across as passionate and assertive about the proposed alliance. By dialing back public expectations, he can avoid being mousetrapped into supporting an arrangement that might not work or that GM execs might ultimately feel isn't needed.

    As they should, Ghosn and GM CEO Rick Wagoner are waiting to see the analysis and hear what the numbers tell them before deciding whether to proceed. They know that just because you do due diligence doesn't mean you do a deal.

    Remember that before the old Chrysler Corp. hooked up with Daimler-Benz, it sniffed around BMW.

    More recently, GM and Fiat already had exchanged gifts and were about to say their vows when GM bought its way out of what would have been a shotgun wedding and probably a stormy marriage.

    When you think about it, Fiat has been promiscuous.

    In 1985, Fiat and Ford flirted with the idea of combining forces in Europe to create a powerhouse that could dominate the fractious market. After a courtship that lasted several months, they called it off -- although they agreed to remain friends.

    In the early 1990s, it was Fiat and Chrysler that talked about shacking up. According to a former Chrysler exec who spent time in Torino working on the potential partnership, Gianni Agnelli tabled the discussion because he had jitters about the Gulf War. After the war, Chrysler's prospects at home improved, and its ardor waned.

    Mom was right: It takes more than passion to make a relationship work.
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    Re: OPINION - Flirting is fine, but passion can be fleeting

    Quote Originally Posted by adplusone
    When you think about it, Fiat has been promiscuous.

    In 1985, Fiat and Ford flirted with the idea of combining forces in Europe to create a powerhouse that could dominate the fractious market. After a courtship that lasted several months, they called it off -- although they agreed to remain friends.

    In the early 1990s, it was Fiat and Chrysler that talked about shacking up. According to a former Chrysler exec who spent time in Torino working on the potential partnership, Gianni Agnelli tabled the discussion because he had jitters about the Gulf War. After the war, Chrysler's prospects at home improved, and its ardor waned.

    Mom was right: It takes more than passion to make a relationship work.
    Fiat was like this in the past, it's true, but it's even more so now just on a different level. We've seen Fiat made small agreements in the past (these alliances/combinations from the past Lapham points out aside) -- look at their vehicle development with Saab to create the original Fiat Croma, Lancia Thema, Alfa Romeo 164 and Saab 9000, or their commercial van development with PSA, etc.

    Today though Fiat has any number of cooperative agreements either in place or in the works. There is the aforementioned/continued agreement with PSA to build commercial vehicles, the cooperation with Tata of India to produce vehicles for the Indian market as well as looking at synergies for the Latin American market, Fiat builds the Sedici with Suzuki (basically an SX4) as well as an upcoming Lancia version tagged "Pangea", they have an agreement with Ford to build a new Ford Ka and Fiat Cinquecento (500) from the Fiat Panda platform in Poland and they're looking to expand to other ventures. But in Europe this is the norm it would seem --- Ford builds engines with PSA, Toyota builds small cars with PSA, Volvo once built the S40 with Mitsubishi, BMW used to buy the Mini's 1.6L I4 from Chrysler, SEAT and FIAT used to cooperate at one time (truth be told, FIAT basically created SEAT during Franco's reign. Look HERE for more details), Mini used to outfit an Italian company called Innocenti with basically an Italian-ized Mini, VW/SEAT/Ford built MPV/Minivans together in Spain (think Alhambra, Galaxy), etc. --- everyone seems to cooperate more on such projects in Europe since the market is fragmented.

    As for the proposed Tie-Ups of Fiat in the past, before the early-mid 1990s, there was speculation over Fiats survivability and the Agnelli family wanted to insure their continued existance and try to expand their partnerships. Plus I think that Gianni Agnelli was a bit of dreamer and ego-maniac who wanted to see Fiat be part of something larger than what it was at the time. Then in the early-mid-90s Fiat was actually Europe's largest carmaker until the end of the 90s when VW catapulted to that position and Fiat had nothing but financial problems galore.

    But the possible combinations were all interesting. Ford always wanted to get their hands on Ferrari after Henry II was spurned by Enzo Ferrari (Which we all know led to the GT40's reign at LeMans). Ferrari was controlled by the Agnelli family who had an agreement with Enzo to take majority ownership after his death (Piero Ferrari has 10% of the company). So a combination of two powerhouses in Europe (with Ferrari as a boon) would have made sense in the mid-80s. Plus the idea of two dynastic familys like the Fords and Agnellis jumping into bed with each other might have seemed appealing to both families since they'd be guarenteed to call the shots.

    The tie-up with Chrysler would also have been an interesting partnership fueled by Lee Iacocca. Iacocca is Italo-American and is incredibly proud of his hertiage and the thought of tying up one of America's Big 3 with the company that brought you the Cinquecento appeal to him enormously. Plus, don't forget that Chrysler owned Lamborghini at the end of the 1990s, so this was also interesting as Lambo and Ferrari might have ended up under the same corporate umbrella.

    It's interesting how things work out though, eh?
    "La vita come un albero di Natale..c' sempre qualcuno che ti rompe le palle!"

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    Re: OPINION - Flirting is fine, but passion can be fleeting

    Quote Originally Posted by adplusone
    As they should, Ghosn and GM CEO Rick Wagoner are waiting to see the analysis and hear what the numbers tell them before deciding whether to proceed. They know that just because you do due diligence doesn't mean you do a deal.
    And this is ultimately the truth of the matter. Just cause they're talking doesn't mean it makes any sense at all to do it. And with the new financial reportings proving how well GM is doing in its turn around, Goshn might be back peddling a bit to leave himself wiggle room.

    Fact is that in light of due dillgence, Kerkorian let it slip to piss off Rick & Co. But in most cases, these things don't get anounced to the Public unless talks are far enough along. Case in point is DCX and how the merger between Daimler-Benz and Chrysler Corporation moved along behind the scenes before it was announced to the world. So this 90 day review they're doing is actually what should have been done behind the scenes before it was even public. But we all know how that worked out.
    "La vita come un albero di Natale..c' sempre qualcuno che ti rompe le palle!"

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    Re: OPINION - Flirting is fine, but passion can be fleeting

    Quote Originally Posted by nadepalma
    Fiat was like this in the past, it's true, but it's even more so now just on a different level...
    It's interesting how things work out though, eh?
    Interesting post, nadepalma. Actually, it was more enlightening than the Lapham article that inspired the thread!

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    Re: OPINION - Flirting is fine, but passion can be fleeting

    maybe this whole GM/Nissan/Renault thing should get its own area?

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    Re: OPINION - Flirting is fine, but passion can be fleeting

    Quote Originally Posted by IMPALAon20s
    maybe this whole GM/Nissan/Renault thing should get its own area?
    Good idea. Almost half the articles on the news ticker are about Ghosn, Nissan or Renault anymore.

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    Re: OPINION - Flirting is fine, but passion can be fleeting

    Good to hear that the Jackal is having second thoughts. 10-fold reward? No alliance with anyone is going to yield those rewards. Who knows what Satan Jerkorian promised him in the first place. Carlos, go back and fix your Datsun mess, don't fall for Jerkorian's lies.
    Last edited by cfch3399; 07-28-2006 at 03:21 PM.

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    Re: OPINION - Flirting is fine, but passion can be fleeting

    Quote Originally Posted by cfch3399
    Good to hear that the Jackal is having second thoughts. 10-fold reward? No alliance with anyone is going to yield those rewards. Who knows what Satan Jerkorian promised him in the first place. Carlos, go back and fix your Datsun mess, don't for fall for Jerkorian's lies.
    I think the deal could have such a huge upside to Nissan/Renault. But not for GM of course. N/R would get access to all of GM's trucks, SUVs, and sports car know-how and platforms. GM would get a small car. Big whoop.
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    Re: OPINION - Flirting is fine, but passion can be fleeting

    Quote Originally Posted by tgagneguam
    Interesting post, nadepalma. Actually, it was more enlightening than the Lapham article that inspired the thread!
    Thank you tgagneguam for the thumbs up. I'm glad that someone enjoyed it. Much appreciated!
    "La vita come un albero di Natale..c' sempre qualcuno che ti rompe le palle!"

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    Re: OPINION - Flirting is fine, but passion can be fleeting

    In your face Kerkorian, it sounds like both GM, Nissan, and Renault, are having second thoughts. Which remind me, Kerkorian has been very quiet over the past few days.
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    Re: OPINION - Flirting is fine, but passion can be fleeting

    Quote Originally Posted by asim
    In your face Kerkorian, it sounds like both GM, Nissan, and Renault, are having second thoughts. Which remind me, Kerkorian has been very quiet over the past few days.
    You can say that again! We haven't heard from him or from York since the Q2 numbers were reported.
    "La vita come un albero di Natale..c' sempre qualcuno che ti rompe le palle!"

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