Chrysler’s Canadian Breakdown

 

Southbound and Down? (Courtesy: canadianmetalworking.com)

Brampton: Southbound and Down? (Courtesy: canadianmetalworking.com)

When Chrysler Group LLC announced that it was withdrawing requests for Canadian Government aid earlier this week, my immediate reaction was to think: “there goes another piece of Canada’s auto industry.” Having just months ago watched GM close its Australian operations when it became clear the government there wouldn’t continue to subsidize the industry, it seemed clear that Chrysler would move at least one of its Canadian products to the waiting Toluca, Mexico plant. I was not alone in guessing that Windsor’s minivan plant would be on the block, but in its carefully-worded statement Chrysler indicated it would move ahead with the tool-up for a new generation of minivans there. Chrysler even committed to investing in “substantial product interventions” for Brampton’s Lx platform vehicles (300, Charger, Challenger), which are supposed to hit markets later this year.

So did FCA’s CEO Sergio Marchionne break the political math tying government support to new product investments? Not exactly. He still has plenty of room to maneuver, and lots of possible asks. And the likelihood that a Canada plant will end up losing a Chrysler plant to Mexico remains very high.

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The New, New, New Chrysler: Half Time In A Dutch-based UK Tax Domicile

Go ahead... make my tax year.

Go ahead… make my tax year.

Immediately after the US government funded and brokered marriage of Fiat and Chrysler, the company’s advertising took an unmistakable turn towards themes of national identity and patriotism. From the over-saturated sincerity of Chrysler’s “Imported From Detroit” ads, Ram’s “So God Made A Farmer” sermon and Jeep’s  “The Things We Make Make Us” manifesto, to the dripping irony of Dodge’s “Freedom” spot, every brand in the new “Chrysler LLC” played up its American-ness in a different way. And when Fiat’s 500 was introduced to the US market it was marketed almost exclusively in ways that highlighted its Italian-ness, despite the fact that the car has never actually been built outside Poland and Mexico. Clearly Fiat-Chrysler’s Canadian-born CEO Fiat Marchionne and French-born marketing boss Olivier Francois believe quite strongly in the power of national identity as a marketing tool.

This was already a provocative choice, given that these US-based brands had come under the control of an Italian firm, at some cost to the US taxpayer. But with news breaking that the new Fiat Chrysler Automobiles (FCA henceforth) will be based in The Netherlands with a UK tax domicile and listed on the New York Stock Exchange, this patriotic marketing strategy becomes even more of a liability. FCA would love to have its cake and eat it too: benefit from national bailouts and nationalist marketing while enjoying every tax and banking advantage of new transnational corporate structures. The question is: can it?

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