One on One with Francesco Guerrera of "The Financial Times"
Tuesday, April 28, 2009
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SUSIE GHARIB: Joining us now with more analysis of Fiat and how it can help Chrysler, Francesco Guerrera, U.S. business editor at "The Financial Times." Hi Francesco.
FRANCESCO GUERRERA, US BUSINESS NEWS EDITOR, FINANICAL TIMES: Hi.
GHARIB: All right, so when do you think that Fiat is going to announce whether or not it's going to have a partnership with Chrysler? Are they going to wait right down to the deadline of Thursday? What are you hearing?
GUERRERA: My sources are telling me that things are going very well, that talks after the agreement with the union talks are going very well and at least the Fiat camp is cautiously optimistic that they'll be able to do it by Thursday, by the deadline of Thursday, might not have to go right to the deadline.
GHARIB: The big question though is, does Fiat have what it takes to make Chrysler into a successful company? We know that Daimler-Benz, a big German company, couldn't pull it off. Can Fiat do what's need?
GUERRERA: Well, Sergio Marchionne, the chief executive of Fiat, has a reputation in Europe and Italy as a miracle worker. He pulled Fiat back from the brink. He turned it around. He did a deal with the unions. He has proven that he can do it before. The problem is he has to do it in a difficult car market, a U.S. car market, in a very difficult economy and with the unions in a commanding position because they have 55 percent of the company.
GHARIB: Does Fiat have the financial muscle to do what it takes, because just as you mentioned, car sales are slow, not only in the U.S., but also in Europe. So do they have the money to back any kind of changes that it wants to make?
GUERRERA: The good thing about this deal from Fiat's point of view is the fact that they're not putting money into it, so they save money. And the question is, can they bring the design, the ability to bring efficiency to the plants and the ability to drive, to build cars that people want to drive to the United States. So I don't think it's a question of financial muscle. It's more a question, whether they have the managerial bandwidth to do everything.
GHARIB: And does it? Does it have enough people to run both Fiat and Chrysler?
GUERRERA: Fiat, he's Marchionne (INAUDIBLE) so he is be all and end all within the company. So he has said that he wants to take a hands-on approach to Chrysler, because it needs his managerial skills. And so fiat will have to prove they have a deep bench to run the company back in Italy and in Europe and then also do what needs to be done for Chrysler. So expect Marchionne to spend a long time, a lot more time here in the United States, in Detroit to turn around Chrysler, at least for the first year or so.
GHARIB: And what do you think it means in terms of saving jobs in the U.S. and creating new ones?
GUERRERA: I think that for a while we won't see any creation of new jobs. I think that's the least that we can expect. You know, the best thing for the workers of Chrysler at the moment is the fact that Chrysler doesn't go into bankruptcy and therefore there won't be massive job losses. There will be some job savings. There won't be any job creation for some time and that's because the market is so down.
GHARIB: How committed do you think Fiat is in turning Chrysler around? After all, as you said, they're not putting any money into this partnership.
GUERRERA: I wouldn't worry about Fiat's commitment. If this is important for Chrysler, it's crucial for Fiat because Fiat has not ever really cracked the U.S. market. The U.S. market remains the biggest car market in the world. Fiat needs to have a successful U.S. operation in order to become a global car company, so Fiat is also staking its reputation and its future over this, on this adventure.
GHARIB: Francesco, thanks a lot for coming on the program.
GUERRERA: Sure.
GHARIB: Gave us a lot of good information. We appreciate it.
GUERRERA: Thank you.
GHARIB: My guest tonight, Francesco Guerrera, U.S. business editor of "The Financial Times."
