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TEACHING NOTE
Fiat Chrysler Automobiles N.V. (2015):
From an Alliance to a Cross–Border Merger
by
Syed Tariq Anwar
College of Business
May 25, 2015
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Fiat Chrysler Automobiles N.V. (2015):
From an Alliance to a Cross–Border Merger
Case Synopsis
The case is intended to have students look at the 2009 Chrysler–Fiat auto alliance as well as
the two companies’ cross-border merger, which took place in 2014. The Fiat Chrysler
Automobiles is a useful case that discusses two struggling firms and their survival and expansion
problems and had no choice but to look for a partner. Fiat was the only viable alternative because
of the company’s compatibility and product lines. Chrysler did explore the possibility of a tie-up
with GM, Ford, Volkswagen, Tata Motors, and Nissan. Eventually, Chrysler decided on creating
an alliance with Fiat, which agreed on taking a 20 percent stake in the company. In 2011, Fiat
Case Objectives
The primary purpose of this case is to analyze and discuss the 2009 Chrysler–Fiat auto
alliance as well as the two companies’ 2014 cross-border merger in the global auto industry.
Issues that are important in the case are their high-profile alliance, modular technologies, global
integration, and reorganization of the brand portfolio. Students need to look at the intricacies of
Suggested Teaching Approach and Student Assignments
As of 2015, Fiat Chrysler Automobiles has become a visible auto company because of its
brand portfolio and aggressive global expansion. It is recommended that instructor-led class
discussions should revolve around the new company’s history and its evolutionary growth (see
Tables 1–4 in the case). Also important are topics such as strategic alliances, cross-border
mergers and acquisitions, new technology platforms, and brand portfolios. The questions
included in the case for class discussion will require web-based and library research. It is
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Discussion Questions & Answers
Question 1. What are your views of the Chrysler–Fiat strategic alliance in 2009?
Answer. Within industry-specific issues and circumstances, the Chrysler–Fiat auto alliance had
two goals, first to help Chrysler survive as well as restructure its global operations and, second,
Question 2. Analyze and evaluate the new Fiat Chrysler Automobiles (FCA) and its strengths
and weaknesses in global markets.
Answer. Fiat and Chrysler are established brands in North America and Europe. At the same
time, both companies have seen losses and quality problems. Chrysler owned Jeep and Dodge
brands that carried a major brand identity in North America. Major weaknesses of Chrysler were
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Question 3. Compare and contrast Fiat Chrysler Automobiles with three other auto
manufacturers (Toyota, General Motors, and Ford) in the global auto industry.
Answer. As of 2015, Chrysler and Fiat can be compared and contrasted with other auto
manufacturers as follows (see case Tables 1–4).2
(b). GM In 2014, GM’s sales stood at $155 billion versus Chrysler’s $116 billion. After its
bankruptcy, GM has recovered and made many corporate changes. GM’s major weaknesses are
Question 4. What do you anticipate beyond 2016 regarding the growth of Fiat Chrysler
Automobiles in the automotive industry?
Answer. Within today’s auto industry, Chrysler’s brands (Ram, Dodge, Chrysler, and Jeep) and
the minivan range have been selling well in North America. Fiat has been assembling some good
small car models and two types of engines in North America. Alfa Romeo has arrived in North
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Question 5. What did you learn from the Fiat Chrysler Automobiles case?
Answer. In today’s global business, auto alliances and cross-border mergers are common and
can bring cost efficiencies and corporate rationalizations if planned properly. Alliances and
mergers can also fail because of the mismatch of corporate goals and ill-conceived synergies.
Case Analysis
Fiat Chrysler Automobiles is a useful case in the global auto industry because of heightened
competition and a changing business environment. The case provides a good opportunity
regarding discussing survival and global expansion strategies. It is evident that both companies
have benefitted from their 2009 alliance as well as merger and will continue to do well in the
next five years if markets and business conditions remain the same. Interestingly, in March 2015,
Fiat Chrysler Automobiles proposed a megamerger with GM but was declined. Fiat and Chrysler
carry marketable brands in their product portfolio and have created a collective force in the
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As of 2015, Fiat Chrysler Automobiles is doing well, although the company faces financial
problems and lethargic sales. At the same time, alliances and cross-border mergers are difficult
to succeed because of differences in corporate cultures, ownership issues, regulatory barriers,
and labor unions. As discussed in the case, Marchionne has done a good job for Fiat and
Supplementary Reading
Books and Special Surveys
Clark, J. (2011). Mondo Agnelli: Fiat, Chrysler, and the Power of a Dynasty. New York: John
Wiley.
Gibbs, R., and Humphries, A. (2009). Strategic laliances and Marketing Partnerships: Gaining
Competitive Advantage through Collaboration and Partnering. Philadelphia, Pennsylvania:
Kogan Page.
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Tillemann, L. (2015). The Great Race: The Global Quest for the Car of the Future. New York:
Simon & Schuster.
Vlasic, B. (2011). Once upon a Car: The Fall and Resurrection of America’s Big Three Auto
Makers—GM, Ford, and Chrysler. New York: William Morrow.
Periodicals/Journal Articles
Anginer, D., and Warburton, A. J. (2014). “The Chrysler Effect: The Impact of Government
Intervention on Borrowing Costs,” Journal of Banking & Finance 40, pp. 62–79.
Chiarini, A., and Vagnoni, E. (2015). “World Class Manufacturing by Fiat: Comparison with
Toyota Production System from a Strategic Management, Management Accounting, Operations
Management and Performance Measurement Dimension,” International Journal of Production
Research 53, No. 2, pp. 590–606.
Collins, P. “Special Report—Cars: Gloom and Boom,” Economist (April 20, 2013), pp. 1–16.
Nishitateno, S. (2013). Global Production Sharing and the FDI-Trade Nexus: New Evidence
from the Japanese Automobile Industry,” Journal of Japanese and International Economies 27,
p. 64–80.
Roe, M. J., and Skeel, D. (2010). Assessing the Chrysler Bankruptcy,” Michigan Law Review
108, pp. 727–771.
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Sharman, A., and Mishkin, S. “Detroit Dinosaurs Hit the Road to Silicon Valley,” Financial
Times, (February 7–8, 2015), p. 10.
Endnotes
1 Also see Bloomberg Businessweek, Economist, Financial Times, Fortune, New York Times,
Wall Street Journal, Value Line, and S&P Industry Surveys.
2 See Value Line.