2010 Porsche PanameraEnlarge Photo
It's enough to make a historian weep. While General Motors chainsaws brands off its core like old-growth redwood, Europe's automakers think they have a better idea: turn themselves into carbon copies of GM.
The latest: Porsche and VW. Instead of pursuing a shareholder takeover of Volkswagen, as it's been doing for more than a year, Porsche's struck a deal with Germany's largest automaker in which the two will combine all their management operations under one roof. The car brands include Porsche, Volkswagen, SEAT, Skoda, Bentley, Bugatti, Audi, and Lamborghini (we're not forgetting anyone, are we?) Porsche said in a statement that the new operation would ensure it retains its independence. We shall see.
The epic tilt in the balance of power, meanwhile, is leaving America's automakers in the dust. Ford has already spun off most of its acquisitions from the 1990s and 2000s, including Jaguar, Land Rover and Aston Martin. At GM, plans to sell off HUMMER, Saab and Saturn are well underway--with thought being given to handing control of Opel over to Fiat, too.
Chrysler, which always seems to find a dance partner, is heading into the arms of Fiat, another automaker that thinks it can juggle an armful of brands better than the Americans, and do so through the classic ups and downs of the auto industry. Fiat's already in the process of taking control of Chrysler, Jeep and Dodge--and if Opel also comes its way, it will have built a global operations that builds everything from the Jeep Wrangler to the Maserati Granturismo.
And now with the latest from this morning, GM may be seeking a chunk of the new Fiat-Chrysler in exchange for Fiat running its Opel subsidiary around the world. Sigh.
Overreaching is nothing new in the auto industry, and in this latest ten-year cycle, the players who remain on the sidelines get left out of the headlines. But while alliances like Renault-Nissan struggle with integration and making their virtual mergers work, the temptation to create megacompanies with constellations of brands still hold.
Fiat and VW/Porsche may succeed where others have failed--but are shoppers ready to accept Dodge Rams and Fiat 500s on the same showrooms floor? Or a Buick Astra built by Fiat-Opel for GM, which also indirectly has a stake in Chrysler?