You can't say Sergio Marchionne didn't warn us.
It's been five months since Fiat's CEO unveiled his vision of the future, complete with the ultimate version of corporate downsizing.
His instinct was telling him something, he said then.
It was going to be Draconian.
“By the time we finish with this in the next 24 months, as far as mass-producers are concerned, we're going to end up with one American (carmaker), one German of size; one European-Japanese … one in Japan, one in China and one other potential European player,” Marchionne told Automotive News Europe on December 8.
“This business is going to be completely different,” he said. “It cannot continue as it did in the past. Independence is no longer sustainable.”
At the end of last year, we couldn't have known Marchionne's vision would be so prescient. Fast-forward and it all seems so clear -- if only because Marchionne is the one shaping that future of the global auto industry.
Mr. Marchionne, may we borrow your crystal ball?
After his meeting with German government leaders in Berlin on Monday to unroll his plan of a partnership between Fiat, Chrysler and General Motors Europe, Marchionne will move his vision closer to reality.
Fiat Group could combine its automobile business into a new company that would also include its new stake in Chrysler LLC and GM's European operations including Opel, Vauxhall and Saab.
Marchionne's December vision was binary: If you make more than 5.5 million cars per year, you live. If you don't, you die.
And what he gets with Chrysler and GM Europe is sufficient scale. He gets synergies, thought to be worth 1 billion euros a year by merging platforms and engineering. He gets sales -- up to 7 million a year under the plan, second only to Toyota and about the same as Volkswagen.
He gets “a marriage made in heaven,” as Marchionne told the Financial Times .
But heaven is a small, crowded place in this new world, and Fiat can't save everyone. Some doubt it can even save itself.
More companies are at risk as this crisis continues to take new twists and turns.
If we believe Marchionne (and why wouldn't we?), the damage caused by the current economic crisis is not finished.
Family-owned companies are still very much at risk. BMW comes to mind, as does PSA/Peugeot-Citroen.
Those carmakers face decreasing demand for their cars as well as uncertain futures. Will their owner families try to sell their stakes to protect their fortunes?
BMW CEO Norbert Reithofer has said his company is in the “biggest crisis in its history.”
Suppliers and dealers also will have follow Marchionne's lead in consolidating. And no one really knows how much worse the downturn will get. But if the problems deepen, consolidation might be the only route to survival.
Not so long ago, mergers were off the wish list in Europe. The last “marriage made in heaven” of Daimler and Chrysler ended in an expensive divorce here on earth and was regarded a blueprint for failure.
But if smaller automakers collapse, the net effect could be the same — fewer automakers, each with larger slices of the market.
Will that happen? Is it inevitable?
Marchionne said yes.
At this point, are you going to argue with him?