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Samsung Galaxy Note 7 disaster endangers FCA's Magneti Marelli sale

Samsung's financial and public relations positions are going up faster than one of the company's Galaxy Note 7 smartphones, and that's bad news for Fiat Chrysler. FCA was in talks with the South Korean tech giant to sell all or a portion of Magneti Marelli, the enormous Italian parts supplier. The deal, estimated to be in the $3 billion range, was a big part of FCA CEO Sergio Marchionne's five-year plan to slash his company's ˆ5.5 billion ($6.07 billion at today's rates) debt. But Samsung's flaming phones may have stalled the deal, Automotive News reports. Samsung was hoping to acquire all or part of Magneti to gain access to its lighting, in-car entertainment, and telematics business, all in a bid to reduce its reliance on occasionally explosive consumer electronics, AN's sources report. This week alone, Samsung permanently ended production of the Note 7 and began recalling millions of devices, sending out flame-proof return boxes so owners can ship the device back in relative safety. The disaster has already caused Samsung to slash its third-quarter operating profit by $2.3 billion, and is leading the company to divert its attention away from big, blockbuster deals, people "who asked not to be identified because the negotiations are private" told AN. According to the same sources, the two sides haven't even agreed on a valuation for Magneti Marelli. Neither company was willing to comment on the potential sale. Related Video: News Source: Automotive News - sub. req.Image Credit: Andrew Zuis / AP Chrysler Fiat Technology Smartphone Sergio Marchionne FCA Samsung

FCA-Renault merger faces tall odds delivering on cost-cutting promises

FRANKFURT/DETROIT — Fiat Chrysler Automobiles and Renault promise huge savings from a mega-merger, but such combinations face tall odds because of the industry's long product cycles and problems translating deal blueprints into real world success, industry veterans told Reuters. BMW's 1994 purchase of Rover, and Daimler's 1998 merger with Chrysler both made sense on paper. The companies promised to hike profits by combining vehicle platforms and engine families. Both combinations proved unworkable in reality, and were unwound. Renault and Nissan, which have been in an alliance since 1999 designed to share vehicle components, have only managed to use common vehicle platforms in 35% of Nissan's products despite an original target of 70%, according to Morgan Stanley. FCA and Renault have raised the stakes for themselves by ruling out plant closures. That increases the pressure to achieve more than $5 billion in promised annual savings from pooling procurement and research investments. The two companies have yet to fill in many of the blanks in the merger plan put forward by Fiat Chrysler. Renault's board is expected to act soon to accept the proposal, but that would lead only to a memorandum of understanding to pursue detailed operational and financial plans. A final deal and the legal combination of the two companies could take months to complete if all goes well. Pressure to cut automotive pollution is driving the latest round of consolidation. Automakers are looking at multibillion-dollar bills to develop electric and hybrid cars and cleaner internal combustion engines. Fiat Chrysler and Renault are betting they can design common electric vehicle systems, then sell more of them through their respective brands and dealer networks, cutting the cost per car. Developing all-new electric vehicles can bring more opportunities to share costs from the outset, industry experts said. "With the emergence of connected, autonomous, electric and shared vehicles, carmakers face immediate investments, so new opportunities for sharing costs have emerged," said Elmar Kades, managing director at Alix Partners. However, most electric vehicles lose money. This is a challenge for city car brands in Europe in particular. Both Renault and Fiat rely heavily on this segment for sales.

1950s car ads are timeless

Usually around the Super Bowl a few great car commercials show up, but for the most part auto ads today pale in comparison to the '1950s and '60s. In an era with a truly viable magazine industry, automakers would take out gorgeous full-page spreads to get the word out about their wares. It was also a time when imports were just hitting the US, and there was a boom in sports cars. Car and Driver has gone for a dig into its advertising archives from when the book was known as Sports Cars Illustrated for a truly great viewing experience. You can imagine a young Don Draper mulling over the copy for these ads, but some of it is laughably quaint today. For example, there's a great image of a driver whipping an Austin-Healey 100 around a track. The italicized red text proudly proclaims, "From 0 to 60 MPH in 10.5 seconds." One of the beautiful parts about these advertisements is that you seldom see photos of the cars. Instead, there are often detailed drawings that slightly distort the vehicles' lines. With this approach, the Porsche 356 ends up looking far more curvaceous than in real life. Plus, the front end of the Chrysler 300 looks large enough to land a helicopter on. The whole thing is worth scrolling through. There are some fascinating glimpses into auto history like an ad for Abarth exhausts before the brand was just known for tuning Fiats. Related Video: News Source: Car and DriverImage Credit: GM Heritage Center Marketing/Advertising Read This Chrysler Fiat Porsche Performance Classics porsche 356 abarth