Turning down an offer above market value probably wasn’t a good idea

Just a few days ago, it was reported Fiat Chrysler Automobiles had an offer on the table and could ultimately be sold to an unknown Chinese company. Since then, it has been said that Geely was out of the running, as was Dongfeng, and now you can add Guangzhou onto the list of companies that said “no thanks.” Word was that a well-known Chinese automaker had put up an offer, and after being reported to the masses via TV and Internet, FCA’s stock even climbed a bit. That being the case, it tells us that investors have more faith in Chinese automakers than FCA itself, but despite this, the most recent offer was rejected because it just wasn’t enough. Of course, that doesn’t mean there aren’t other companies that could bring some much-needed love to FCA, including brands like SAIC, Chery, and even BYD. But, rumor has it that the most recent offer was just over FCA’s market value, which is right around $20 billion. It almost sounds like Sergio Marchionne seems to think FCA is more valuable than it really is.

Let’s look at past events. An FCA purchase, or at the very least, a partnership, has been on the table for years. General Motors was a potential suitor, but that all fell apart, and Volkswagen ran away screaming. (No surprise there after the financial problems it ran into with the Dieselgate scandal.) And now, we’ve got three well-known Chinese manufacturers that would rather go it alone than obtain even a portion of FCA. That brings the total of companies to give FCA the middle finger up to five, including one American manufacturer and one German manufacturer. Of course, since the most recent deal was rejected, the potential buyer could come back with more money and see what old Sergio says, but at this point, I’m not sure. It just doesn’t look like anyone is dumb enough to buy into FCA. Yeah, that’s pretty harsh to say, but I have my own reasoning. Keep reading to find out more about it.

Jeep and Ram Support all of FCA, Build Quality has been Crap

First, let me point out that, as a mechanic, I’ve wrenched on my fair share of cars from a good portion of the big boys. Of course, all manufacturers have their own problems, but there’s just something about FCA vehicles that really drive me crazy.

2015 Chrysler 300 High Resolution Exterior
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One of my most hated cars produced by FCA was the Chrysler 300. Not only did it look like a wannabe Phantom, but the front ends were complete junk for many years.

One of my most hated cars produced by FCA was the Chrysler 300. Not only did it look like a wannabe Phantom, but the front ends were complete junk for many years. The 300 was plagued by bad bushings, annoying clunks, and a fairly rough ride if not maintained to a high standard. This has changed a bit with the introduction of the second-gen model, but it still had some major problems that I just couldn’t get over.

On top of that, Chrysler’s designers don’t know what the public wants. As a brand like Chrysler, this should be instinctual, but look at what happened with the Chrysler 200. Its entire life cycle lasted for a total of six years with two generations… two generations. That’s roughly three years a piece, and it’s because nobody wanted the damn thing. Not that it wasn’t a nice car. It was even comfortable, but that’s not enough in a world where SUVs reign supreme and little cars have been gradually dying off. Sorry, Chrysler, but you’ve dropped the ball a lot.

Jeep is more valuable than FCA as a whole.

Next, let’s talk about this whole situation with Jeep and Ram. Within the last couple of months, it was said that Jeep is more valuable than FCA as a whole. Let me say that again: Jeep is more valuable than FCA as a whole. FCA; a group of companies that includes Jeep, Ram, Chrysler, Fiat, Alfa Romeo, Maserati, and Dodge. How does this happen? Sure; the SUV market is booming, and we Americans love our go-anywhere off-road machines, but that’s a little ridiculous. So, it’s quite possible that Jeep could be spun off into its own brand just like Ram was a few years back.

Be that as it may, Chrysler is a bit of a troubled company as far as I’m concerned, and turning down an offer that was even slightly above market value isn’t exactly the smartest idea. Then again, I’ve never had good luck with anything I’ve owned from the FCA group, so maybe I’m just a little jaded.

But, what do you guys think? Will FCA eventually find itself a buyer, or will it continue on as it is, and eventually spin off the Jeep brand in an attempt to save FCA as a whole? What Chinese manufacturer will be willing to step up to the plate? Let us know what you think in the comments section below.

References

Chrysler 300

2015 Chrysler 300 High Resolution Exterior
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Read our full review on the Chrysler 300.

Chrysler 200

2015 Chrysler 200 High Resolution Exterior
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Read our full review on the Chrysler 200.

2018 Jeep Wrangler

2018 Jeep Wrangler Exterior Exclusive Renderings Computer Renderings and Photoshop
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Read our speculative review on the 2018 Jeep Wrangler.

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