Fiat-Chrysler Wants New Alliances image

Fiat-Chrysler is taking into consideration new alliances, given the flat and oversupplied European market.

Sergio Marchionne declared that the company is considering any company willing to make an alliance, anywhere in the world since there are not many left in Europe besides Suzuki and Mazda. He also said that General Motors was in advanced talks to buy a small stake in French automaker PSA Peugeot Citroen as part of their proposed alliance in Europe and elsewhere.

“It is key that the situation in Europe is addressed. If the potential Peogeot-GM tie-up becomes reality, I sincerely hope it deals with the overcapacity issue. It has to,” he said.

Marchionne believes that 2012 would be quite a difficult year, with a likely decline of volumes in Europe, the most optimistic forecast being for the new vehicle sales in Europe to be flat through 2014. Besides overcapacity and flat markets, the company also has to face labor flexibility, a far greater problem than labor cost. Fiat has tried to fight over flexible labor contracts in Italy. Opposed to Europe, the U.S. accepted multi-shift production.

“America fixed the problem in 2008 and 2009… Capacity has been taken out and the workforce has become incredibly flexible.”