Why do rumors that one auto company is buying another get so much credibility in Europe's stock markets these days? After all, rumors involving BMW, Fiat and PSA/Peugeot-Citroen are nothing new. We've heard them for years. But the speculation heard almost daily since the beginning of 2000 has caused huge jumps in the stock of the alleged takeover targets - often more than 10 percent in a single day. That's not like former times and the difference is in the detail, says analysts.
'The thing with the last few rumors was that they included the details,' said Christian Breitsprecher at Deutsche Bank in Frankfurt. 'They sound credible.'
Indeed, the rumors of 2000 seem to come with operational fine points. The sources are generally unknown, but investors love the rich detail.
For example, when it was rumored a few days ago that Ford would take over BMW it was complete with the scenario that former BMW executive Wolfgang Reitzle would pull the company into his Premier Automotive Group fold with Jaguar, Volvo, Lincoln and Aston Martin. It was just another rumor, but it sounded like a fait accompli.
According to one theory in circulation, Bob Eaton stepped down as DaimlerChrysler co-chairman this month to make room for either of Fiat's two Paolos - Fresco or Cantarella -- to become Jurgen Schrempp's new co-chairman at DaimlerChryslerFiat.
Our verdict: unlikely. Eaton was ready to leave and, after almost two years flying with a co-pilot, Schrempp would almost certainly not agree to another.
Europe's great auto industry families - the Agnellis at Fiat, the Quandts of BMW and the Peugeots - hold the real power in the current frenzy of merger and acquisition talks. Thirteen years ago Ford and Fiat had all but merged, said an executive who was at Ford at the time and intimately involved in the Fiat talks. 'We were absolutely sure we had a deal, then - poof!' said the executive, now a senior supplier executive in Europe. 'The Agnellis said no.
'But you can also go home on Friday night believing that it is over, that you don't have a deal. Then over the weekend the family can change its mind. You never know where you stand when the families are involved.'
Amid all the speculation about the future of Fiat we wonder what is going on with Jack Welch, the legendary General Electric chairman who joined Fiat SpA's board last year. Rumors of GE involvement in a deal with Ford or DaimlerChrysler come and go. Meanwhile, Welch's role in the talks, if any, continues to be mysterious. Some say he could be Honorary Go-Between in a Fiat Auto takeover, linking Fiat's Agnelli family with either Ford boss Jac Nasser or D/C Chairman Jurgen Schrempp. Nasser and Schrempp both idolize Welch and have reportedly modeled their careers on his.
Why did Volkswagen hire former BMW boss Bernd Pischetsrieder as board member for quality control and chairman of Seat, making him the clear front-runner to replace Ferdinand Pi'ch as management board chairman in three years? Here's a possible explanation circulating in Germany. Pischetsrieder proved in six years running BMW that he can work with a strong supervisory board chairman who formerly led the company - Eberhard von Kuenheim. If he gets the top job at Volkswagen he'd be doing it all over again with Pi'ch.
Speculation that Audi Chief Executive Franz-Josef Paefgen will be blamed for the TT's stability problems and lose his chance to succeed Volkswagen Chairman Ferdinand Pi'ch - and possibly even his job - is being discounted inside VW.
'He is out of the race,' said an executive at a German rival. But VW insiders say Paefgen is not in trouble. In fact, they say he may soon move to Wolfsburg to take over product development for the Volkswagen division. VW Group product development czar Martin Winterkorn would then become Audi's new boss.
Paolo Cantarella, Fiat SpA chief executive officer and ACEA's president for the next two years, is shaking up the sleepy European automakers' association. Staffers say Cantarella has taken command - demanding policy statements and action instead of piles of press clippings and weighty technical reports.
Cantarella has hired management consultants AT Kearney to recommend how ACEA can become more effective. He's also made it clear to fellow board members -the chiefs of Europe's auto companies - that their monthly meetings will be more than social visits. They are going to discuss issues and make decisions.
Cantarella knows he has time to make an impact since he has the job for two years. That's because Fiat is Italy's only major carmaker. Cantarella doesn't have to split the country's two-year term with another chief executive.