DaimlerChrysler and Ford buy companies outright, or take management control. General Motors forms alliances. Who is right?
GM has minority stakes in Suzuki, Subaru, Isuzu and now Fiat. Its silent-partner approach may be the way to attract companies that are non-aligned and nervous.
The remaining independents don't want to be brutally taken over. They are too healthy (Honda), or family-controlled (BMW and PSA/Peugeot-Citroen).
GM's low-key deal with Fiat may be the model exit strategy for the world's automotive families. It is painless and face-saving. The Wallenbergs did it that way. The Swedish industrialist family took 10 years to ease out of the auto business. In 1989, it sold 50 percent of Saab to General Motors. GM bought the rest in January of this year.
The Agnellis may have a similar plan - a gradual and comfortable withdrawal on the GM installment plan. General Motors merely wants to buy a piece of your company now - saving you money through purchasing synergies, technology sharing and a common platform or two.
GM may eventually want all of Fiat Auto. Or it may not. GM has a history of leaving its partners be, even when it has a virtual controlling stake.
General Motors has quietly gone round the world stringing together allies - buying or increasing minority stakes, building a network of associates. That has always been the GM way. When Ford bid for all of Jaguar in 1989, Bob Eaton of GM Europe only wanted 30 percent.
GM executives aren't empire-builders by nature. The hunger to grow bigger doesn't exist inside the company in the way it does at the second, third and fourth largest carmakers.
Some say GM secretly bought control of Fiat Auto. It probably did not. With GM what you see is what you get. When its executives say they are in no hurry to control Fiat Auto you believe them.
GM's no-pressure approach appealed to Fiat and its founding family. They would rather be nudged by Rick Wagoner than hammered by Jurgen Schrempp. Sources say DaimlerChrysler insisted on management control of Fiat Auto and will demand the same of Mitsubishi.
So Fiat Auto now has a strong, unobtrusive partner and a more viable future. But what does GM get for its 20 percent interest? You don't have to own a stake in a company to share platforms. But it did prevent archrivals Ford and DaimlerChrysler from getting Fiat, Alfa Romeo and Lancia. That may have been worth the price of admission.