Who could have imagined Chrysler Corp. being rescued by Fiat? When Fiats last appeared in the U.S. automobile market, they were viewed by most American drivers as quirky little cars from Italy with maintenance problems.
I owned a Fiat 124 Sport Coupe in the late 1960s. For the time, it was a great car. It had double-overhead camshafts, four-wheel disc brakes and a five-speed transmission -- features that few if any American cars had.
The Fiat had a solid rear axle. Since the axle was well placed, it had no effect on the car's excellent handling capabilities. The engine would willingly rev well past its 7,000 rpm limit if you let it.
I bought it because I wanted a sports car but had a family and needed something bigger. It met my needs extremely well, but there were problems.
The exhaust manifold gasket blew out at intervals between 5,000 and 10,000 miles. The turn signals stopped working at the same frequency. Then, the steering column wiring harness had to be replaced. The rear disc brake calipers slid on dissimilar materials and stopped working due to corrosion from electrolytic action when the car was driven on salted roads in the winter.
I was into working on cars then, so none of those things mattered to me.
Most U.S. consumers didn't take maintenance problems that lightly. When gas prices fell back after the 1979 crisis, consumers returned to big cars, pickup trucks and SUVs, and became unwilling to put up with maintenance problems in order to get better gas mileage.
The Fiat dealer service network was also a problem. Finally, Fiat withdrew from the U.S. market in 1984.
Fiat can bring a lot to Chrysler and visa versa. Fiat has a terrific small car, the Fiat 500, named after the much beloved in Italy Fiat 500 Topolino that helped Fiat get back into automobile manufacturing after World War II. Importing the Fiat 500 would give Chrysler a small, fuel efficient entry into a U.S. market that seems to be ready for it. The established Chrysler dealer network would give Fiat an advantage that it has never had in the U.S.
But, as with my Fiat, there are problems.
The new company will need to overcome Fiat's image. U.S. consumers are accustomed to cars that are virtually maintenance-free. They will be put off by any perception that a car has potential maintenance problems. Today, U.S. consumers want better gas mileage, but they have never embraced small cars like the Fiat 500.
Owning a car like the Fiat 500 may convey a message that you are a conscientious person interested in saving the planet. But to many in the U.S., it also says that you cannot afford a real car. U.S. cars have an aura of affluence and power that has been important to U.S. consumers. Small European cars do not.
If the Fiat-Chrysler merger does happen, watching the new company's progress in the U.S. will be very interesting. If gas prices go up again, the merger could be a great success. But success will require a makeover of the Fiat image in the U.S. and a permanent shift in U.S. consumers' decision-making patterns for automotive purchases.