Chrysler merged with an European manufacturer for the second time in 20 years

For the second time in 20 years, the Chrysler Group has merged with European car maker , Fiat this time , in an attempt to survive in the increasingly competitive auto industry.

On January 29 , John Elkann , chairman of Fiat, announced the expected merger and the formation of the Chrysler Fiat Group Automobiles ( FCA) as the beginning of ” a new chapter” in the history of the company.

” FCA allows us to face the future with a renewed sense of purpose and vigor ,” said Elkann .

The merger of the two automakers is a personal success for the CEO of Fiat and Chrysler, Sergio Marchionne , who less than five years ago the U.S. manufacturer decided when it was insolvent and on the verge of disappearance.

“Today is one of the most important in my career at Fiat and Chrysler days. Five years ago we began to cultivate a vision that went beyond industrial cooperation to include cultural integration at all levels ,” said Wednesday the employer Italian- Canadian Marchionne .

Marchionne ‘s words have special meaning given the recent past , Chrysler Group.

In 1998 , Chrysler, then the third-largest U.S. automaker behind General Motors and Ford and fifth in the world , merged with the German industrial giant Daimler- Benz to form DaimlerChrysler AG .

Then , the transaction was described as a “merger of equals’ , but in reality was an acquisition in which the German company paid U.S. $ 38,000 million for Chrysler , which dramatically ended a decade later.

In 2007 , Daimler sold Chrysler to Cerberus Capital Investment Fund Management by 7,400 million as a result of pressure from shareholders of the German company , which saw the value of their shares plummet after the creation of DaimlerChrysler.

For analysts , the failure of the union between the two companies was culture . While Daimler- Benz was ” conservative , efficient and safe ,” Chrysler was ” bold , diverse and creative ” according to author Steven H. Appelbaum .

Since mid-2009 , Marchionne and Fiat reached an agreement with the U.S. government to manage the Chrysler Group, the only solution that prevented the disappearance of U.S. manufacturers, Italian- Canadian entrepreneur has endeavored to synchronize the corporate cultures of the two companies. The results seem to support that Marchionne has achieved what the German Daimler- Benz could not materialize .

Under the baton of Marchionne , Chrysler Group back in 2011, before term, 7.600 million U.S. and Canada had borrowed to reorganize and avoid extinction.

Chrysler Group sales have grown steadily over the past five years with a major renovation of its products and image. On Wednesday, Marchionne announced that the manufacturer sold 2.4 million vehicles in 2013 , 9% more than in 2012 , and earned 1,600 million dollars.

With these results , it is not surprising that the U.S. government should not put any qualms about that Marchionne has taken the seat of FCA to Holland and tax resident in the UK for its low taxes .

When the Thursday White House spokesman Jay Carney was asked about the change of venue , downplayed its significance , noting that what matters is that the U.S. auto industry is again profitable.

” What we have seen from these initiatives ( the rescue of Chrysler and General Motors in 2009 ) were taken is the amazing recovery of the American automotive industry , an industry that now produces excellent , more efficient cars and , what is more important , is expanding its operations and workforce, ” he said.

While analysts such as Marchionne , recognize that the merger is an attempt to Fiat and Chrysler to bridge the gap with the major industry , Toyota , Volkswagen, General Motors and Ford.

These manufacturers are taking economic advantage of using the same architectures cars in all markets of the world, something that Fiat and Chrysler will accelerate once confirmed their merger.