Does Fiat Own Ram? How Did Italians Take Over American Trucks?

Ram Trucks are a distinguished member of an elite club. The top three trucks are tough and durable enough to be the default option for most American shoppers. We are talking of Ford's F-150, the Silverado, and the Ram 1500. Though Ram has made a decent comeback from being the default third choice, it would surprise a number of people to learn that the iconic brand is no longer as American as it once was.

In 2009, Ram's manufacturer, the Chrysler Corporation, was compelled to merge with Fiat Automobiles S.p.A, (the largest automaker in Italy) due to a number of complex reasons we shall discuss below. If you are wondering how a prolific American truck and its parent company wound up in the hands of Italy's largest car manufacturer, settle into our discussion of:

• The economic landscape that ate into Ram's (Chrysler Corporation) profit margins
• Factors that compelled Chrysler Corporation to merge with Fiat Automobiles S.p.A
• How the newly formed Fiat Chrysler Automobiles became a subsidiary of Stellantis in 2021

How Chrysler Corporation Merged with Fiat Automobiles S.p.A

The financial collapse of 2007 - 2008 left people and companies reeling in its wake. It caused the great recession which dealt America's struggling automotive manufacturers a near mortal blow. Chrysler Corporation, the maker of the Ram (Dodge Ram) pickup trucks was not the only member of the Detroit Three to be brought to its knees due to the series of unfortunate events.

Even GM, the big daddy of them all, had to file for bankruptcy, albeit only for forty days, in the spring of 2009. In these vulnerable times, government support did not prove sufficient for Chrysler Corporation to save itself from a corporate takeover. Even the government which had lent Chrysler billions of dollars, had to admit that the company could not survive on its own.

Though the CEO of Chrysler Corp tried to merge with GM, the deal went sideways. Chrysler found itself targeted by several salivating global investors. The US government kept a close eye on the negotiations because it was vital to them that Chrysler did not get married to a hostile foreign state.

Fiat Makes an Unbeatable Offer

Ultimately, everyone agreed that Fiat S.p.A was the most viable suitor for Chrysler which was eager to emerge from under the disastrous Daimler Benz era. Unlike their German counterparts, the Italian company was offering a marriage of equals. This was much more palatable than the previous state of affairs, where Chrysler's operation was at risk of being moved to Germany in its entirety.

An economic disaster for the hundreds of thousands of Americans depending on Chrysler, not to mention a serious political headache for the newly elected democratic government.

Despite Fiat's handsome offer, the Italian company was not bringing cash to the table. In exchange for the 35% stake they would acquire in Chrysler, they offered billions of dollars in Research and Development that Chrysler urgently needed.

They sorely needed the small and efficient engine that made most consumers opt for European and Asian models. Though the then President, Obama, tried to intimidate Chrysler's lengthy list of creditors into forgiving the company's debt, it only worked on a few. Majority (hedge and investment funds) stood their ground and demanded what they were owed.

Chrysler Files for Chapter 11 Bankruptcy

Thus Chrysler Corporation had to file for Chapter 11 bankruptcy, despite marrying up. The company needed protection from its creditors while maintaining business as usual. Despite a Supreme Court petition seeking to stop the bankruptcy proceedings, the Justices found no fault with the deal. All parties, including the U.S. government, had acted within the law.

So it was Chrysler's sale to Fiat was approved. By June 10th, 2009, the Fiat takeover of Chrysler was complete, and the two companies now had one CEO, Sergio Michonne. The man had taken the helm when Fiat was on the verge of bankruptcy in 2004.

He then turned the ship around in what most people agree was an unbelievable fete. Everyone was optimistic that he could do the same for Chrysler without disposing of American plants and assets. 

As mentioned earlier, Chrysler is not to blame for its eventual fate because several auto manufacturers have resorted to similar deals to remain afloat in the economies of scale. The 2007 - 2008 automotive crisis was felt around the world, not just in Detroit.

Factors Contributing to the Bankruptcy of Several Auto Manufacturers

The problems for American auto manufacturers are a perfect storm that brewed over time to drag down the ship at the most vulnerable moment:

• It began with the energy crisis of 2003 - 2008. Fuel prices skyrocketed and the US government introduced emission and consumption regulations to curb the crisis. The new regulations drastically reduced the production of high-consuming classic American muscle cars, SUVs, and pickups. Considering the huge profit margins on these vehicles, Detroit's automakers took a punch to the gut, revenue-wise.
• The high cost of fuel caused many North American consumers to prefer lower-consuming European and Asian cars.
• The financial crisis of 2007 - 2008 created a similar crisis in the auto manufacturing industry as the demand and credit facilities for car sales dried up

Fiat Chrysler Automobiles Marries French PSA Group to Form Stellantis

Ram technically hasn't been owned by the FCA corporation since January 2021 when the long-winded merger with the French Automaker PSA was finally concluded. FCA had been in negotiation with the PSA group since 2019 when the news of a merger first broke. The two companies were aiming for a 50-50 all-stock deal. The fifty billion merger was concluded and the company announced its new name, Stellantis in July 2020.

While this may tempt some into believing that the Ram is now some American-Italian-French amalgamation, this could not be further from the truth. Throughout the chaotic bankruptcies and mergers, Chrysler's organizational and operation structure was always preserved carefully within the new corporation. As such, you can remain confident that American hands are making the Ram truck just as it has been since the very beginning.

Unfortunately, many fear that the merger with Stellantis could witness the discontinuation of Chrysler and Dodge brands which are considered to be the least profitable of the American lineup.

However, Jeep and Ram are completely safe because they are considered the American breadwinners. The French and Italian cars to cut losses are yet another headache for the Stellantis group. The merger created many redundancies that have to be cut loose. Luckily, Ram is off the table!

Ram is Separated from Dodge. Results? The Trucks Are Better than Ever!

Just because Ram trucks are now owed by an American Italian corporation does not make them less American. If sales are anything to go by, Americans approve the changes that the Ram trucks have benefited from since the corporate merger. Chances are high that if Ram and Dodge had not been split, the tragic Dodge sales would have tied the noose around Ram's neck as well.

When Fiat Chrysler Automobiles decided to split the Dodge and Ram brands so the former could focus on performance cars and the latter could dedicate itself to pickups, auto industry experts thought it was a wrong decision.

Even when the CEO replaced the heads of both brands and devoted money to marketing the new products, pundits bet against FCA's bold move of spending big after a serious cash crunch.

Ram sales are going through the roof. Tripling your market share over a span of ten years is enough to make the leaders turn their heads and raise some eyebrows. Ford and GM have taken notice and are trying to add some features to the new Ram trucks to seduce customers back into their showrooms.

How did the Ram truck emerge from a solid third choice to a serious threat to those dominating the market?

• First, they matched GM and Ford's capability and towing numbers.
• Second, they disposed of the ridiculous idea that pickup drivers are practical buyers who will not shell out the money for a plush interior and lots of tech on their dashboards.
• Third, the Ram brand was apportioned a dedicated sales and marketing budget to boost its sales after the split from Dodge.
• Fourth, their trucks won several consumer awards which boosted confidence in the brand and its product lineup. The Ram 1500 snagged MotorTrend's Truck of the Year Award in 2019. In 2020, another Ram pickup won the award, this time their Heavy Duty truck.

Ram trucks do not lose their American heritage simply because their corporate overlord happens to not be from the USA. The brands gain in market share and tons of critical praise are enough proof of that.

Conclusion

It is no secret that most automakers have been struggling to maintain their profit margins while adhering to ever-stricter manufacturing regulations. Not to mention the consumer demand for cars that consume less fuel, or perhaps none at all. Ram is guaranteed to survive a terrible dip in the industry and emerge stronger on the other end, isn't that as American as it gets?