Monday, January 26, 2009

Chrysler - Fiat strategic alliance

Few days back I received a mail from my OSPD prof. Nagendra sir on this strategic alliance, which was published in 'Business Week'.
Many experts said that the bailout, the companies have got, wasn't sufficient. I accept that $4bn bailout package given to Chrysler isn't sufficient. But the company itself is responsible for its condition. The US govt. is giving huge amount of money to these companies because these companies (GM, Chrysler, Ford) have acquired such a massive size that US economy relies on their success (blindly). To save thousands of people from being unemployed, US govt. is bound to take this step. But it is a big game that is played among various companies, big or small. It should be left upon them how they strategies their game and how well they play it. If big companies fail, small companies on the other hand get something (opportunity, profit whatever you say). Let the game be fair and just for all. otherwise save small companies too. Everyone knows how much the senior officials (even presidents and CEOs) spent their time standing outside the office of US president, or higher govt authorities and congressmen and lobbied to get bailout. Small companies cannot do this. I think govt should not have interfered.
Now one major benefit I could understand from this strategic alliance is the Distribution Network that both the companies will get in eachother's countries and also in those places where they have their stable foot. but what 'Complementary benefit' both of them will get as was said by Bob Nardelli, Chairman & CEO, Chrysler, I am not able to understand. Both are car manufacturers. both use new technology. Being in contact with German manufacturer Daimler-Benz, Chrysler might have learnt German technology (which itself is a brand). One, of small use benefit Fiat can get, is access to Chrysler's superb jeeps & minivan models. But there is no such thing as complementary in that.
Let us see what will come out of this deal. A Diamond or a black Diamond....

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