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Fiat-Chrysler?

MICHEL MARTIN, host:

I'm Michel Martin, and this is Tell Me More from NPR News. Coming up, a peace activist from Liberia talks about how the women of her country began to stand up because they were so sick of being down. And a new play tells the stories of the women caught in the conflict in the Congo.

But first, news from the auto world. Earlier this week, Italian automaker Fiat annnounced its intention to secure a 35 percent stake at Chrysler. Joining us now to talk about this partnership is Warren Brown. He covers the auto industry for the Washington Post, and is kind enough to keep us up to date on all things auto from time to time. Warren, break it down for us. Why does this deal make sense? What's the logic behind it?

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Mr. WARREN BROWN (Automotive Columnist, Washington Post): Well, Fiat is betting that gasoline prices will go up in the United States, and this is what I mean by that. Chrysler - of course it's a good deal for Chrysler because Chrysler needs small cars. Chrysler doesn't have the money to do small cars. Fiat is a small car expert, so this would be a good entree for Fiat into the United States as long as gasoline prices are rising because it gives Fiat, you know, something of a justifiable, you know, marketing base and the chance for income.

Now, the backside of that because there's always a backside, is that Fiat desperately has been trying to re-enter into the United States but to do it profitably. You know, we don't, you know, we don't do small cars here, you know, for the most part, you know, unless our gasoline prices are high. They say, well, why does Fiat want to take that chance? Because even though in the United States we beat Chrysler up for making big trucks, Fiat likes the idea of these big trucks because if Fiat comes into the United States and gasoline prices stay low, then Fiat has a chance to make money the other way, selling Dodge Ram 1500s and, you know, big SUVs, so...

MARTIN: In Europe.

Mr. BROWN: Yeah. No.

MARTIN: Because I have to tell you what's so curious to me about is it seems to me - I could be wrong about this and you certainly know more about this than I do - but it seems to me that with the exception of super-luxury brands like Ferrari and Maserati, Americans don't really think of Italian cars as being all that fabulous, just a sort of your run-around car. And in Europe, it's kind of hard to see a Chrysler 300 cruising down the streets of the Via Veneto(ph).

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Mr. BROWN: No, no.

MARTIN: So is that not the idea?

Mr. BROWN: Well, you actually have some Chrysler 300s cruising down the street of the Via Veneto. You actually have that, but no. Here's the deal. Fiat is trying to enter the U.S. market. It is trying to enter the U.S. market profitably. And if it has 35 percent to 40 percent of Chrysler, those big trucks also include a profit for Fiat. You know, they're not looking at necessarily selling them overseas. They may sell a few jeeps overseas because they sell those over there right now and a few mini-vans. But what Fiat wants to do is enter the United States and to do so as profitably as possible. If high gasoline prices allows Fiat to do that by selling the lovely little Fiat 500 car, great. But you know, if low gasoline prices basically allows Fiat to buy into America's truck mania at a profit, great.

MARTIN: And, finally, Warren, before I let you go, I had one more question. Other news this week, GM is no longer the world's biggest automaker, bestseller. It's like apparently dropping to number two after a 77-year reign. Is this a big deal?

Mr. BROWN: I don't know why that's news because that actually happened in 2007. I'm looking at this and saying, what did I miss? Because Toyota surpassed GM, actually, in late 2007, you know, 2008 - mid-2008. So I'm a little bit confused about that story, and I don't understand why that's a big story.

MARTIN: Is it a psychological thing? Oh, no, we're not number one.

Mr. BROWN: Well, yeah, I suppose. But you know, the bottom line is - you know, nowadays, and even Toyota would tell you, you know, Toyota doesn't care so much about being number one as it cares about being profitable. And Toyota, for the first time in all its 40 some years, is looking at an operating loss of $1.7 billion. That's why that happens because Toyota was chasing the Big Three in the United States with trucks and gasoline prices went up. And so everybody is into the same kind of a mix, so we'll see.

MARTIN: OK, one more second on Fiat. In addition to your responsibilities covering the business, you also review automobiles in your column in the Washington Post. So very briefly, do Fiats have a bad rap in the U.S. for being lousy cars? Is there Fiat we should looking at?

Mr. BROWN: Not in - yeah. I'm looking at the Fiat 500. I want them to bring the Fiat 500. I really want Fiat to buy into Chrysler so that we can get as many Fiat 500s in the United States as possible. That's a lovely little car.

MARTIN: All right. Well, we'll check it out. Warren Brown covers the automobile industry for the Washington Post. He was kind enough to stop by our Washington, D.C. studio. Thanks so much for joining us, and stay warm.

Mr. BROWN: Michel, thank you for having me. Transcript provided by NPR, Copyright NPR.