Chrysler isn't merging with or forming an "alliance" with Fiat, the italians are buying the company for next to nothing. And neither company has a reputation for high quality products.
Chrysler's model lineup is growing stale and isn't known as fuel efficient. The Caliber/Patriot/Compass triplets are the most fuel efficient models and are already built as part of an allience with GEM ( partnership of Mitsubishi, Hyundai/Kia, Chrysler and Mercedes ) where engines are cooperatively designed and built. The Caliber triplets are also built on a Mitsubishi Lancer/Outlander platform. When you come to think of it, not many of Chrysler's lineup has been a clean sheet design for quite a while, with the exception of mini-vans trucks and SUVs. The 300/Charger/Chalenger & defunct Magnum are/were all built on a chassis from Merecedes' last generation E-Class. The Sebring/Avenger were built on Mitsubishi platforms (Galant? or Eclipse) The big Sprinter was a Mercedes/Freightliner sourced unit. Wow, other than the above mentioned trucks, SUVs (including Jeep) and Minivans what else did they designe? The Journey? Isn't that based on the Caravan? So, their hopes are pinned on new Fiat platforms?
The earliest any Fiat, more than likely the 500, will get here is 18 months? And then what? New Sebring/Avenger models built on a Fiat platform at least 2 years away? And how will these be better than the Mitsu sourced crap they already have? And what about Hybrids? Other than the electric vans they're building for the Post Office, what does Chrysler have? Fiat doesn't have Hybrid technology, in Europe they rely on small Diesels. And let's not forget Fix It Again Tony.
As I read and commented on the other day, european consumers rank Chrysler and Fiat at the bottom of the scale in quality. So I guess I don't see the "New" Chrysler as being any threat to Ford. Hell, I don't see it being a threat to Kia.
Now, General Motors is another story. They are slashing and burning like a madman with a machette. Selling Hummer, Saab and Saturn, selling huge portions of Opel, killing Pontiac and it's not clear what's to become of Vauxhall. Holden, their Australian subsidiary, seems safe for now and I haven't heard anything about Daewoo either. They've just entered bankruptcy and there's no Fiat waiting in the wings for them. But luckily GM isn't Chrysler. They've got technology and products already in development. We've all heard of the Volt, and they've got Gasoline Direct Fuel Injection engines already in select models and there's talk of smaller Turbo GDI engines in upcoming small cars like the Chevy Cruze. But GM isn't through bankruptcy yet and despite the government's claims that it will be quick and painless GM is much larger.
And despite the big "Hybrid" decals running down the sides of some of their trucks/suvs/cars they don't have a credible Hybrid in place. The "mild" hybrid system that they're canceling in the Malibu is a poor man's substitute for the true Hybrids from Toyota, Ford and Honda.
It's basically a roll start assist system that uses the alternator to get the car moving from a stop and incorporating a start/stop system. "Mild Hybrid" my ass.
General Motors won't take 2 years to get some fresh product out, they will experience delays though. Many products have been put on hold, like the Chevy Cruze, but you can bet that as soon as bunkruptcy is settled they'll be getting programs in gear. But didn't I read at AutoEnthusiasts.net last week that Bob Lutz has said that the Volt is a money loser?
Ford is still losing money, but less each day. Ford is also bringing out fresh models and technologies and that combined with public perception will make the difference.
Yes GM and Ford will always be competing and GM may once again be the top domestic manufacturer. But Ford can settle into second place comfortably and in my opinion it could be less than a decade before Chrysler is either in deep shit or dead.