Post Merger Period of Fiat and Chrysler Essay Example for Free

Post Merger Period of Fiat and Chrysler Essay First of all, they wanted to further solidify their brand presence. Fiat has been successful in the European market but lacks visibility in North America; while Chrysler does not carry a strong dealer network in the European markets. What’s worse, historically, Chrysler was referred to the â€Å"Number Three† auto manufacturer and even today, it still remains as the â€Å"Number Three† after GM and Ford. This impression links to poor brand visibility and low customer royalty. In order to change the status quo, Chrysler focused more on brands differentiation. It planned to reposition itself as an upper scale brand. In 2011, Chrysler unveiled their new Imported From Detroit campaign. It defined itself as the â€Å"import-fighter† and focused on quality, technology, fuel saving and sustainability. As for fiat, they invited celebrities to advertise for them. For example, they invited American singer Jennifer Lopez. This offered them the opportunity of a 360-degree partnership, which triggered the greatest awareness growth ever. Without being shown on television or through the networks, it gained global attention. The second problem they have is labor issues. The relationship between Fiat and labor union has never been satisfying. It suffered from the large layoffs and rigid Italian labor laws. Also, FIOM (labor union in Italy) instigated strikes in the fear that Fiat might pull out from Italys employer’s association and Italian auto market. The disputes between Fiat and Italian labor union are still in heat even today. On the other hand, the UAW (United Automobile Workers), who is the part owner of Chrysler, used to provide cheap labor for Chrysler in order to profit from low production cost. However, this happened no more because their friendly relationship broke off as Fiat and UAW were sharply disputing over the value of Chrysler’s equity. During this argument, the US workers were also fighting for better treatment that further intensified the conflict. Additionally, one of the biggest problems they encountered after the merger was how to form a new and effective management structure. In Nov 2009, two companies announced their new plan for management structure. In detail, Chrysler is ready to break even operationally in 2010; net in 2011, nd repay TARP (Trouble Asset Relief Program) by 2014. (Chrysler had operational profits in the first and second quarters of 2010 and repaid TARP in 2011). Chrysler handles large displacement and hybrid engines, as well as â€Å"all cars above C size,† for Fiat worldwide. That implies Chrysler will engineer and possibly build mid-sized cars for exports (In progress). Quality improvements will continue and extend to dealer service (Quality confirmed; dealer service, likely to take many years). In these four years, Chrysler and Fiat achieved their alliance objectives in the areas of cost cutting, technology sharing, global integration, product rationalization, and RD savings. Furthermore, since this is a trans-Atlantic alliance, two companies would encounter problems caused by cultural differences along their way of integration. For instance, Italians are used to the typically relationship-oriented culture, meaning that â€Å"relationships† come before tasks and relationships are often pre-requisites for the concluding transactions. However, Americans tend to follow the rule of law and regard legal documents as binding. As another case in point, two cultures differ in their attitude towards time. Americans usually attempt to control time, view it as a limited resource, and value it for defining what and when things need to be done while Italians, see â€Å"time† as the context in which everything take place so that we never run out of it. In conclusion, two companies would have a hard time communicating and reaching an agreement when it comes to make strategic decisions.