Automobile sector will receive a severe blow if Euro falls, says Fiat-Chrysler CEO Sergio Marchionne – Part 2

According to Rainieri, every other company wants the same thing as Fiat-Chrysler but all of them are either shy to say it or are mere followers. “Others are standing in the shadow,” he said. “But if he succeeds, they’ll be behind him.”

However, the recent activities of some of the biggest carmakers in the world tell an entirely different story. General Motors is not joining Fiat in the lay-off bandwagon. The American corporate has negotiated with labour unions in Poland and England on some mutual terms and is in the same process in Germany.

GM CEO Dan Akerson was quite open to register his disapproval of the aforementioned proposal. “Why is the stock down?” he told reporters before the company’s annual stockholders meeting Tuesday. “Because there’s uncertainty in the future. The most obvious is Europe. We have to fix Europe or at least get it where it isn’t draining the corporate coffers.”

Nissan CEO Carlos Ghosn was of the same opinion as Akerson. “Is Europe going to be breaking?” he said. “I don’t think so. I think the euro will stay. I think at the end of the day Europeans will find the solutions in order to hold Europe together.”

However, for Marchionne and for Fiat-Chrysler the things are little different. The company has a lot at stack in the current euro debt crisis. For one reason, Fiat is the seller of economic cars that generate lesser profits than the luxury brands like BMW and Audi. Moreover, Fiat’s largest market is its native country Italy that is the next in line after Greece and Spain in crisis.

Chrysler is returning back of profitability; the brand showed 33 percent increase in sales so far and is expected to churn $1.5 Billion in profits. However, with Fiat’s support, the still unstable brand might not be able to withstand the global economic uncertainity.

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Posted by Usman Khalid on Jun 13 2012. Filed under Automobiles. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.