VANCOUVER, B.C. — Barring some last-minute derailment, a plan to rescue Chrysler using taxpayer dollars and an alliance with Italian automaker Fiat SpA appears to be falling into place.
Most of the concern so far has been related to whether Chrysler's Canadian and U.S. workers and its bondholders would make the concessions needed to open government purses and trigger Fiat's commitment.
There's been less attention paid to how exactly Fiat's non-cash investment in the ailing Detroit manufacturer will put a shrunken Chrysler back on the road to viability.
Some analysts are skeptical Canadian and especially American buyers will once again embrace Fiat or Alfa Romeo, its formerly independent upscale brand. Poor sales and a reputation for dodgy quality forced them to abandon North America in the 1980s.
Chrysler says it will get access to all of Fiat group's vehicle platforms except Ferrari. A spokesperson says it's premature to get into specifics until the deal has passed the due-diligence phase.
The long-term viability plan submitted to the U.S. government in February says Chrysler would gain immediate access to substantially all of Fiat's vehicle platforms.
The Italian carmaker's lineup is dominated by small, fuel-efficient models such as the Grande Punto, the Fiat 500 subcompact - an icon in Italy equivalent to the VW Beetle - as well as small people movers such as the Qubo and Multipla.
Just which models would make the trip overseas has not been decided.
Chrysler likely would continue producing minivans, pickup trucks and some Jeep models. But it will probably kill its dated Caliber hatchback, Sebring sedan and maybe the fullsize Chrysler 300, the only real success story from its previous alliance with Germany's Daimler-Benz.
Fiat had been plotting a return to North America. Now it would gain access to Chrysler's dealer network, while Chrysler would expand its toehold in Europe and other international markets where Fiat plays.
But in the end the auto business is about the cars. Supporters of the Fiat-Chrysler alliance are hoping a generation of consumers has grown up not knowing that Fiat once stood for "fix it again, Tony."
"They will run up against that predisposition particularly of Americans to the Fiat brand and the memories of the Fiat brand," says Richard Cooper, a Toronto-based analyst for J.D. Power and Associates. "As we know, brands that have that do tend to take a while to get over it."
Hyundai almost foundered here in the 1980s when its first offering, the budget-priced Pony, turned out to be lemon. It's taken the Korean company years and billions poured into design and quality improvements to re-establish its products as alternatives to Japanese makes.
Dennis DesRosiers, Canada's best-known auto analyst, says the Fiat-Chrysler marriage faces considerable obstacles.
"The Fiat strategy requires three near miracles to occur," he says. "One, Americans have to start buying small entry-level vehicles. They never have. Secondly, they have to buy Italian small vehicles. They never have."
"And third, the small vehicle that they buy will have to be profitable. And they typically are not."
The U.S. market is the key to Chrysler's survival. Unlike Canada, where small and medium-sized cars make up half the sales, Americans are not fond of little cars.
The three compact car segments made up 19 per cent of U.S. sales last year and J.D. Power forecasts it could go to 22 per cent by 2012, especially if fuel prices climb back to US$4 a gallon.
That presents an opportunity for Fiat-Chrysler but also a challenge. There are plenty of high-quality small cars already available from Japan, Germany and, increasingly, Korea.
"We've been spoiled on Corollas and Civics and that's who Fiat would be head-to-head with, the best of the Japanese," says DesRosiers.
"There's no guarantee you can get the consumers out of their Toyotas and Hondas and into an Italian car."
Italian cars historically have a reputation for brilliant design and styling but maddening quality lapses.
Fiat is said to have made large strides in quality under Fiat chief executive Sergio Marchionne, the Italian-Canadian who took over the helm in 2004.
But a look at J.D. Power data from Britain suggests Fiat has some way still to go.
The firm's customer-satisfaction survey, which samples opinion after two years of ownership, has ranked Fiat at or near the bottom for the last four years.
The vehicles at the top of the British survey come with familiar names: Honda, Toyota, Lexus.
Fiat has some good products, says DesRosiers, "but it has to be completely re-engineered for a North American marketplace."
Given the speed of the rescue effort, that won't happen at first. Rebadged Fiats, unchanged except for safety-related modifications, likely will be sold in Chrysler showrooms.
"These things don't happen overnight," Cooper agrees. "You don't just flip a switch ... It does take time to reinvent the lineup and that's going to be a good few years."
It remains to be seen whether the taxpayer-funded plan gives Chrysler enough time.
DesRosiers is somewhat cynical, believing the plan's main goal is to get the automaker off the government's political agenda.
"What they're trying to get to is a situation where Chrysler can limp along," he says.
"You're not looking at economics; this is what's confusing about the whole thing. It's not an economic equation. It's a political solution they're looking for."
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