Currently reading: Alfa Romeo overhaul stalls due to Fiat-Chrysler buyout
Delay in Chrysler buyout halts Fiat’s investment in its premium car division
2 mins read
10 November 2013

The overhaul of Alfa Romeo has stalled as Fiat boss Sergio Marchionne turns his attention to completing Fiat’s buyout of Chrysler.

These spy shots show a mule of the planned Alfa SUV heading for Fiat’s Balocco proving ground in northern Italy. That this prototype is no more advanced than the one spotted by Autocar in Los Angeles 12 months ago shows that Alfa’s mainstream models are effectively on hold.

Autocar understands that the only new Alfa currently progressing is the Mazda MX-5-based roadster. The Alfa SUV is now unlikely to appear before 2015, a delay which also holds up a planned sister SUV from Jeep. There’s no news either on the planned Fiat 500X and its related ‘baby Jeep’ model.

Analysts say Marchionne cannot fully execute his plans to create a premium car-making division from Jeep, Alfa and Maserati without access to Chrysler’s cash reserves, but Marchionne has failed to hammer out a deal with Chrysler’s co-owners.

Fiat currently owns 58.5 per cent of Chrysler. The balance of 41.5 per cent is held by the United Auto Workers Retiree Medical Benefits Trust, a holding acquired as a consequence of GM’s bankruptcy and government bailout.

The UAW wants to maximise its investment to provide funds for retiree pensions and healthcare costs. It covers ex-Ford, GM and Chrylser workers and has 860,000 people on its books.

However, Fiat and the UAW fund have failed to broker a deal after the Union valued its holding at around £3.1bn, which is perhaps understandable considering the Trust’s responsibilities. 

Last week, Marchionne said talks had failed and he wanted to see the initial public offering executed by the year’s end. One advantage for Fiat is that the move will establish market price for the shares. However, Fiat will have to ensure it ends up as the majority owner of the UAW’s stake or the merger, which is essential to the health of Fiat, will fail. 

Analysts say Marchionne might eventually have to borrow as much as £2.5bn to complete the buyout and finally invest in the much-delayed Alfa-Jeep-Maserati division.


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10 November 2013
Surprising lack of direction at Alfa these days. If I was heading for Balocco, I'd be in the right hand lane.

10 November 2013
Well at least Marchionne saved a few million by completely ruining the look of the 4C. I note Jeep's latest products seem to be "challenged" in the headlight dept, too. Maybe it's catching.

10 November 2013
Alfa could be revitalised with a relatively modest investment. A small front wheel drive coupe based on the Fiat Panda to replace the Mito (AlfaJuno) would be top on my list, then a 4-dr Giulietta based sedan badged as the 156. All these cars could be made in the US or Mexico too. An Estate Ghibli (and a new Shamai) would be required to bring a bit of extra good fortune to Maserati. I'm not sure if 4x4s based on the Cherokee and Grand Cherokee are the answer for Alfa or Maserati, but a focus on 4x4 road cars/suvs (and a return to rallying) would make sense for Lancia. A large Lancia 4x4 (HyperGamma Integrale?) would be good.....

11 November 2013
When i read this article at the weekend the first reply on here was questioning the facts behind this article - the comment stated that the 500X was in fact due to go into production, with the new small Jeep, first quarter next year. So who has removed this comment? The user or Autocar? And if it was Autocar, then why not just post a reply underneath the comment? They also pointed out that the car in the pictures was an old picture of the mule for the new Cherokee, disguised as an Alfa. What's happened here Hilton?

11 November 2013
I see autocar have removed off my comments I geuss that proves one thing that the person who wrote the article isn't up to speed on what is happening with the manufactures. just for the record AUTOCAR removed my comments

11 November 2013
Plenty of scope for an emergency 'Seat Exeo' style model plan. Some of Chrysler's sportier entries would make interesting Alfas. The Dodge Charger would make a nice 159 / 166 replacement - give it a Brera style front and all set. The Dodge Challenger would be a great Brera / GT replacement, a real competitor to the A5 coupe. The Dodge Dart Rallye, with the rearmost side window blanked off to create a larger C pillar, would make a 145-style car between the Guilletta and the Charger-based car.

11 November 2013
Geely should investigate the oppurtunity to acquire Alfa Romeo,they could pump cash into Alfa,while borrowing reliable,high tech platforms from Volvo.Alfa Romeo could be the high performance arm Geely requires & Alfa could be viewed as an Italian BMW (just safer & more reliable).

11 November 2013
Alfa and Lancia head a saddening list of Italian car brands 'rescued' by Fiat (= acquired on the cheap.) Most of these have either disappeared, consigned to a forgotten lock up in Turin or, terrifyingly, come to back to life as some sort of zombie Frankensteins with the right badges on the wrong bodies. Ferrari is the exception that proves the rule: one assumes the strength of its management, assets and customer base were sufficient to survive the negative cash flow and corporate stagnation Fiat bestows upon its victims (standard big conglomerate behaviour to be fair.) Well done for almost making a success of Maserati (eventually) but grazie per nulla for 3 decades of non-achievement as far as Alfa is concerned. Looking forward to Marchionne's next aggrieved press release knocking back VW again.

16 November 2013
Completely agree with you AHA1. I have kept faith with Alfa and Marchionne for a long time, so long that I'm beginning to feel old(ish). I feel that time has run out. I have given up waiting and hoping. It will still be years before anything truly worthy of the Alfa badge appears. How alleged megabrain Marchionne has managed to lay waste to Alfa as he has done is truly beyond me; "saddening" would be an understatement!

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